Chapter 5 findings through interviews

5-1. Role of Business/Financial Journalism

In reality, how do business/financial journalists recognise their role in society? A Japanese journalist for Nikkei, Naoko Miyashita talks as follows:

“The articles done by business/financial journalists are completely different from companies’ website information or the financial analysts’ reports. Our role is to classify and present the meaningful information to the citizens through our own criteria. For example, companies’ websites are just the information of their points of view. The financial analysts are just the business persons who always try to sell their clients the profitable stocks. They just care about the investors only”⁷.

An experienced journalist of Bloomberg says “The role [of business/financial journalism] is the same [as other conventional journalism]. We are writing for investors, but we are trying to be as transparent as possible. We are trying to make business transparent”.

Those journalists care about their own audience and feel their responsibility to report the information to the audience with scrutinising it. However, it is necessary to examine that their audience is different from other conventional media. A sixteen-year career journalist, Dan Bogler, a managing editor of the Financial Times, discusses that its audience have specific interests to read it. In other words, his audience is more active to obtain the business/financial information than other media’s audience.

“I mean this is the best in the world and I love the Financial Times, but this is not for the paper you read for fun, you know. This is a difficult paper to read, you know, it’s technical, it’s detailed, it’s heavy and you don’t find the things about the Big Brother or, you know, the loyal family or whatever in the end. You read this usually because you have to, because it affects your business in your life”.

According to Bogler, the audience of Financial Times has four categories: (1)decision makers in the area of political, business, economic things such as chief executives and all those in senior management groups (2)politicians, central bank and people in the bank business, people in the think tanks, analyst of investment banks, and economic professors (3)professional investors such as hedge fund and other fund managers (4)retail investors (uniquely in the United Kingdom).

A journalist of Bloomberg also talks about its audience with using the term ‘clients’ as follows:

“[O]ur clients are making multi million dollars decisions based on our stories. They are trading on our headlines and our stories… By clients, I mean the investors, those clients who demand, who are CEOs and CFOs and central bankers and they want very specific, accurate, very specific information not general information”

On the other hand, the general newspaper does not care about the investors much in depth even though it has business/financial pages. A business editor of Yorkshire Evening Post, Nigel Scott discusses that his audience is different from other business/financial journalism because of the difference of the editorial philosophy. His newspaper is a tabloid newspaper. He cares about the interests of the people in Yorkshire in terms of economic issues.

“Evening Post business is a lot more for people who aren’t necessarily in the world of business, and they may be just workers rather than the boardroom people, but who have an interest in what’s going on the local business world, so that’s the sort of we write for… We are very much a tabloid paper. In terms of the philosophy of the paper, it’s more for the sort of the common man in the streets as it were, the general readership”

William Dawkins, a partner of Odgers Ray and Berndtson, who has a twenty-three year career as a journalist at the Financial Times, points out “the Financial Times is not the general newspaper” and its role in society is “very different” from the other general journalism. The audience are the business elites who make the influential decisions to the world. However, it does not mean that the business/financial journalism is only for the limited number of high class people in society. Dawkins explains that its role is “very important” because the nature of business affects society as a whole.

S)A good business press is an important part of successful economy. The US has great business newspapers. Same as Britain, same as Japan. Business people use these newspapers to help and make judgements.

I) They are doing their own business with using that kind of information.

S)Yes. And these are the people who hire, who provide jobs for hundreds of thousands of people who pump wealth back into the economy. It’s very important to the well being of these countries. They perform well in their work. Business newspapers are more helpful if they are doing their jobs properly.

(S: William Dawkins, I: the researcher)

What kind of news do they try to get? Bogler provides the definition of his scoops as “something that the company doesn’t want them to know” and the information comes “from competitor, or from an analysts, or from a supplier, or customer or something or someone inside of the company, but not maybe the management”.

According to a journalist of Bloomberg, Merger and Acquisition, some executive’s promotion or resignation, and the company’s decision to open the new factory are the examples of scoops. In addition, Scott talks that the negative stories such as company’s corruption and other wrong doings are the scoops:

“Obviously, you have got yourself through your contacts, your networking, your digging, that is something that everybody will want to read about that it has the great impact on the city, uh… that may expose corruption, or wrong doing, you know.., it’s a good story that you got through your own talent and efforts, and contacts, nobody else has got but everybody wants to read and everybody will follow the next days”.

On the other hand, one role of journalism is to take the voiceless people’s voice. How does he think of this point? Dawkins talks that the business/financial journalism is not for the weak but for the influential class toward the weak. “The business press is to help business people and financial people make judgements” and “it’s not the voice of the people, not at all”.

Writing articles for the “limited” audience sometimes make them cynical to their job. For example, one equities reporter working for a large international news organisation confesses that her reports just contribute to the participants of the market.

“Most of my articles are about what the companies have done and it is just like for the other people’s profitability. It is true that I can learn something through my job, and that is good for me but I am just feeling that this is not for the life-time job. I cannot deny the possibility to be interested in more meaningful jobs [for the ordinary citizens], for example the editor of a non governmental organisation’s publication or something”.⁸

For example, when “company A” which is a public corporation leaks some information to a journalist exclusively, the story will be published as a scoop through the examination by the journalist. After the publication of the article, the stock price of the company A will sharply move. In this context, this journalist contributes to the market. The problem is the case that the leaker of company A has an intention to affect the stock price in his or her favourable way by leaking a story to the journalist. In other words, journalists have a risk to be used to control the stock prices by their news sources.

However, some interviewees accept their role as participants in the market, and they understand it is impossible to stop the fluctuation of the stock market. Scott says “[Y]ou got the scoop and your article is read and respected, so you are winning. You are doing the right thing, I think. Because you can’t control the market but if it’s good information, then it’s your duty almost, isn’t it? To be reported”. Dawkins also talks “you [a business/financial journalist] are the part of the market”, and “it’s a very good thing”.

S)You’re publishing information that it’s got to be published anyway. It’s not the newspaper is not driving the stock prices up. Good business press is the part of the market its way of distributing the information

I) So it’s not a bad thing to be a participant of the market or contribute to the market.

S) That’s a very good thing because it improves the quality of the market. Good business press is a part of good part of market economy

(S: William Dawkins, I: the researcher)

The spread of the Internet changes the audience. Masahide Inatome, a Japanese journalist for the magazine, Weekly Economist, notices that the audience is smarter than journalists and want to have the quick information to scrutinise by itself:

“It is sad to say this, but I feel that the people in Japan do not need the journalistic point of view anymore. People are getting to need the information speedy in a convenient way. It is obvious to see the sales of magazines. Because of the Internet, and people can collect and judge the useful information by themselves. They do not need the editorial columns or the journalistic points of view anymore”. ⁹

On this matter, Dawkins has a different point of view. He agrees that the audience is smarter than before, but the role “to shine the light through the storm” is still significant. According to him, the interpretation and the presentation of in-depth analysis by the journalists are necessary because the information is overloaded.

“[T]he value of analysis is much greater than it was. We do business in the world. The major companies are competing with each other with access to the same information everybody’s, same technology, and the finance, the same cost, which means the best way for that getting competitive parties can differentiate from the rivals is to be able to foretell the future, that means being able to interpret the data all around”.

In summary, the role of business/financial journalism is nearly the same as other journalism to report the things for citizens, but one big difference is that it is not for the voiceless people’s voice. This point stems from its audience. The audience is “business elites” such as the investors, the bankers, and other economic people. It is indispensable to affect the stock markets through the reports, and it is good for society. In the Internet era, the role to present the interpretation and in-depth analysis is required to guide citizens to the right way.

5-2.The Problems in Reality

5-2-1. Narrow Angles

Joanna Blythman, a freelance journalist, criticises the business/financial journalists love the topic such as the profitability and the stock markets too much, and their interests are too narrow.

“I think the business/financial journalists tend to focus on things in a narrow angle. They are talking about the success of profitability, and don’t look at the companies’ social impact carefully. For example, [the issues like] environment, quality of life etc.”¹⁰

She suggests that the business/financial media should hire the people whose backgrounds are different from the business/financial area because it allows to bring broad angles.

In fact, the actual business/financial journalist also wonders the problem of narrow angle. A thirteen-year career journalist for Nikkei, Mitsutoshi Kouta has doubts if it is a right way to focus on profit mainly when he reports something about companies.

“I do not have any intention to cheer up my news sources, but I am not sure if it is right to emphasise the deficit of the companies which I cover. For example, when a small sized pharmaceutical company announces their deficit, which is because of the investment to develop a new medicine. The investment is necessary for them to grow in a long term. I feel it is not enough to see the profit to judge the companies reliability”.¹¹

Dawkins says it is necessary for the journalists to have a “big picture” on every issue.

“Business journalism should look for the big picture. Business journalism should not be just about finance and business. It should explain how business and society affect each other. They should place business in the contexts of society. If you failed to do that, if you are too financial then you just become stock market newspaper. The problem, business newspaper does what business has done which is if you face with how financial and business events affect the people behave, how they affect the markets”.

For example, about the case of the terrorists’ plot in London in 2006. What does the business/financial journalism need to have as a news angle? Dawkins says it is “too financial” to report like “airline share went down yesterday because of the terrorist threat”. It is necessary to have a “right balance” between economic impact and humanity.

5-2-2. Lack of Knowledge

Dawkins also talks that the journalists tend to be manipulated because of the lack of knowledge and sees these cases in reports “all the time”. He argues the lack of knowledge is “the constant risk” for the business/financial media and says “Junior and inexpert reporter will fail to understand the story, because they will simply write down what they hear from the experts and be unable to exercise their judgement”. To avoid the risk, it is significant to train the journalists to increase their intellectual level. In addition, it is important to scrutinise the articles before publishing on the newspaper. This means, the editors are necessary to be expert as well.

5-2-3. Editors and Journalists Relationships

Some interviewees talks about the imbalance of knowledge between journalists and editors as a problem, because it causes the judgement of news value. Kouta talks about the editor’s lack of knowledge on the particular industry.

“For example, when a company started to develop a cure for AIDS, I tried to write the article about it. However, the editor told me ‘I don’t understand. Do you think it is legitimate to put the article like this which has a possibility to fail?’ I would like to write this type of company’s news more, but the editors do not accept my opinion in general”.¹²

Dawkins has an experience both as a correspondent and as an editor at the Financial Times, and says the editors’ job should be “to assess the relative merit of the story” and journalists should “be good enough to give the story that is basically right”. In addition, it is right for the editors to say their disagreement with the journalists’ opinion.

“They are both journalists, ok? Editors are journalists, too. In this [type of conflict between journalists and editors] case, the reporter should well enough informed to make the case for the story. Reporter should be the expert. He should tell the editor. You have to make the argument. The story is important for the following three reasons. You should sell or inform and the editor might say ‘ok, I understand your following three reasons and they are correct. But I still think your story is not important because we’ve got something else which is more important. But it shouldn’t [be] the questions of the foundation of the story’”

Based on the experience as an editor, Dawkins talks the difficulty to spot the trend and judge the value of the story. He also mentions the tendency that the reports become similar with the other media, because the editors care about the competitors’ headlines too much.

“It’s very easy to… follow the crowd. One problem that you’ve got the big story like the terrorist threat in London yesterday, you think to yourself and ‘well, everybody else is going to put that on the front page, so I will, too’ (laughter)”¹³.

5-2-4. Concerns on Regulations

The legal restrictions make journalists’ activities hard. Miyashita describes about the influence of the regulation related to the stock market. When she tries to talk to the people in companies in order to get news, she notices that they hesitate to tell the detailed information about future plans or strategies before the announcement. She says “The people in companies are getting to be sensitive these days because of the incidents of the insider dealing problems and the stock market’s guidance for the companies to control their information firmly. It is getting hard to get scoops”.¹⁴

In addition, a journalist of Bloomberg also describes the influence of the Public Company Accounting Reform and Investor Protection Act of 2002 (which is also known as ‘The Sarbanes – Oxley Act’) in the United States, however it is little impact to the business/financial journalism.

S) “We were very afraid when the Serbanes – Oxley registration went through in America, that we would not get access to the more information because the SCC rules are getting very strict”.

I) Yes, because of Enron, Livedoor…

S) “Yeah, Enron. And Livedoor now. But actually it hasn’t had any real impact on this, getting the news. It doesn’t seem to”.

I) It’s not difficult?

S) “It’s actually not more difficult. We thought it would be but it has not been so, um, people still leak news”.

(S: a journalist of Bloomberg, I: the researcher)

He also indicates some regulation is necessary. For example, regulation which encourages disclosing will be significant for the next five years. Without it, lack of transparency will block the activity of business/financial journalism.

“I do think, I suppose globally in the future, we will be dealing more with, say Chinese companies, Eastern European companies, Middle Eastern companies, and some Russian companies, and until now have not be needed to be transparent and suddenly they have been told ‘oh you have to release any and tell people’ and they haven’t had shareholders so they don’t understand”.

5-2-5. Routine

When the number of journalists is less than the amount of pages to fill in, the journalists feel pressure to collect information to write as news. Inatome who had once worked for Nikkei and Bloomberg points out this as a problem because it is easy to create the situation that the journalists can rely on them.

“On the one hand, the start-up companies or the venture business people especially use Nikkei as a tool or the media for free advertisement to raise money for their business through giving new information. On the other hand, the journalists of Nikkei have a routine to fill the pages with articles so they tend to jump at the new information from those companies. They never refuse to write the information as news because of this pressure”.¹⁵

Once the article about the company’s business information is published, there will be a possibility to increase the investment toward the company. The journalists are also happy to have the information because they can fill the pages. This type of routine makes a journalist embarrassed. Miyashita says “Everything at my workplace is about the supply and the demand”. She has been asked to write something on the pages to fill in even though she judges it is not newsworthy.

In addition, the routine may grab the chances to get scoops more from the journalists, because they cannot concentrate on building their own networks to obtain information and scrutinising certain issues which they are interested in. Scott confesses “I wouldn’t have the time really” to investigate something because of his routines to fill pages.

“I think you just have to realise you can’t, you know. You have to know where your limitation is, and so, if it would something that needed a lot of research, I will have to ask somebody else to maybe take it all and [be] getting involved of it, because my priority, number one priority is to fill these pages, that’s my number one, you know, what I’m told I have to do”.

5-2-6. Unfairness

Kazuyuki Sasaki, the chief editor of IT Media, a Japanese Internet website which provides the news on the areas of information technologies talks about the unfairness in terms of the competition with other media to get scoops. In other words, there is a monopoly of one particular business/financial media, and this creates the lack of fair competition to get information from the companies exclusively.

“I don’t think it is fair. The companies always leak some information to the business/financial media like Nikkei before the official announcement. I can see the flow which starts the exclusive article on Nikkei and the company officially announces the fact later. The companies generally understand the impact of Nikkei’s articles after they leak the information. I am not saying this flow of information violates something, but I don’t think it is healthy situation”.¹⁶

5-3. The Reason Why Business/Financial Journalism Failed to Detect The Frauds such as Enron and WorldCom

Enron and World Com are the problem on disclosure. Why business/financial journalism could not detect this and failed to warn the public before the things happened? Bogler points out that the journalists were “too uncritical”. The people in Enron or World Com “wanted to cheat” the journalists. However, he also admits that “it is difficult” to detect this type of fraud. Dawkins says the governance of Enron was “superb”, so it is significant to keep asking the basic questions.

S) “In fact, the best way to conceal of fraud is to run the company that appears to be very well governed. That was the case of Enron. The governance standard of Enron was superb”

I) How do you think about the financial journalism role at that time?

S) “Poor. It was poor. Nobody detected it. No financial newspapers stood back and asked the basic questions. The standard of reporting was weak”.

(S: William Dawkins, I: the researcher)

Dawkins also emphasises that “Risk is a part of the capitalism and it’s a part of the service of the good journalist to detect risk. Just point it out. You don’t need big judgement, just reported”. The corporations have nature to commit to risks even though there are legal restrictions.

S) “It always happens these days. Risk is the part of the capitalism system. If you don’t take risk you cannot make profits, you cannot make business”.

I) That’s how it goes.

S) “Yes. Now, the government tries to compensate for that. I, putting in place strong rules of governance. But however the strong your governance rules are, companies will take risks, and people will sometimes be dishonest, however good your rules are, frauds will happen. And it is always getting to be impossible for those to detect well organised or conceal the fraud.

In addition to the frauds, business/financial journalism tend to ride on the trend without in-depth scrutiny. Dawkins talks about the ‘New Economy’ in the United States as the example. He insists the necessity to have courage to warn the public.

“How many people wrote the height of the Internet bubble? That… A large number of these companies is going to go bust so that basic rules of the business that you must make profit survive. We’ll still the same. People were writing a lot of rubbish about the new economy, and how the digital world reinvents our business. It was all rubbish. How many people have the courage, stand up and say, ‘well… these businesses is not going to make a profit’ and they collapsed, aren’t they?”

5-4. Power of PR

Another problem is the rise of in-house PR department and PR industry. The PR provides only one side of the story which is favourable for the companies. One Tokyo-based equities reporter for a large international news organisation talks that the PR people have a huge power to allow the journalists to have interviews with executives.

S) “Now, the public relations have a power much more than journalists. We cannot write anything until we can confirm it, and when the PRs deny the information which I get, I cannot write it soon. In addition, there are as many news organisations as the PRs like”.

I) Can you talk to the executives or the people in management team directly?

S) “They never tell the telephone number at all. They never accept the private meeting in their houses. I maybe not aggressive but I am thinking that there is no way to win the race with other big business/financial news organisations”.

(S: the reporter , I: the researcher)

Scott points out that “it’s not easy when I have to fill all this space. I ‘m very reliant on PR companies, [which are] telling me things. Now they are all putting a spin on it”. At that same time, he also understands what the PR people do not bring to him.

“What you don’t find, of course, from PR companies, what you don’t get is the negative stories. They never tell you when the company is sucking people, laying people off, they never tell you when the company is in trouble financially, so you have to use your a lot of contacts for that”.

A journalist of Bloomberg points out that the inexperienced reporters have a risk to suffer from pressure from the people in the PRs.

“It’s always the danger for young reporters that they are reporting for the sources. So we are always telling the people, ‘you are writing for five billion people in the world. You’re not writing for the PR guy or that company’. You know. But it’s hard to stand back because of course the pressure from the companies”.

Tali Kramer, an account Director of Weber Shandwick actually says she will avoid to contact with the journalist who writes the bad article “because it’s no worth it”. She says her job is to “bear to get no negative coverage”.

5-5. Business aspects of news organisation

Based on the propaganda model, ownership and advertising are the elements of the media’s characteristics. For example, the business pages of Yorkshire Evening Post are financially supported by the Yorkshire Forward, the regional development agency. On the top of the page, there is a logo mark of Yorkshire Forward with the words “in association with”. Scott explains “it [Yorkshire Forward] has public money, but it is not run by government” and “they’re using money to support business growth, to support entrepreneurs, to promote Yorkshire internationally to attracting the investment”. He recognises “it’s good revenue for the newspaper and it helps to give a particular credibility to our pages as well that we have that sponsorship”. How does he keep the objectivity?

“The objectivity, that’s very difficult because we write a lot of things about Yorkshire Forward. But we will never not criticise them if we feel we are aware of criticism. The agreement is quite unbreakable. That sponsorship does not affect our journalistic independence anyway so I am quite to run stories about Yorkshire Forward doing good things but that is not because of they are sponsoring page, that’s because the stories worth it on news values”.

The owner of the Financial Times is Pearson. Bogler admits the importance of profitability as a news organisation. On the other hand, he emphasises “there is huge ‘Chinese Wall’ between the commercial side and the editorial side”. This means, there is “no interference” of the ownership or other sponsorship. Dawkins talks about this in detail.

“On the FT, our owner is Pearson, never intervened in what was written on the paper. It was completely unacceptable to do that. They were very good about it. They never did it. And there was a very clear division between the editorial department and the advertisement department. The editorial staffs were never told what the announcement is going in the paper on that day. They didn’t know who they were the advertisers”.