Mar
01
2009

Fear & Favor 2008

Financial woes accelerate corporate pressure in the newsroom

The broad downturn in the U.S. economy has hit the media industry especially hard, as corporate owners who gambled on debt-financed expansions have seen their business models head south on the back of shrinking subscription and advertising revenue. In any economic climate, there are pressures on working journalists, but the current problems in the industry seem likely to exacerbate those unfortunate trends.

Services that obliterate the line between journalism and advertising might see a brighter future; as John Reinan reported in the online news site MinnPost (8/18/08), “The dark cloud over the traditional media business looks like a silver lining” to a company like ARANet, which specializes in “free print and Web content that carries client messages wrapped in consumer lifestyle articles.” The company’s clients include 65 of the top 100 U.S. newspapers, where sometimes disclosure (or lack thereof) can be an issue: “Where the online articles typically are identified as sponsored content, the print articles merely carry an ‘ARA’ designation, similar to the ‘AP’ identifier that runs with Associated Press articles.”

Pressure from owners, advertisers or government officials are ever-present parts of the corporate media landscape. 2008 brought the dramatic example of government propaganda efforts to sell Iraq War policies via a select group of retired military officers who—unbeknownst to viewers—were receiving special briefings and talking points from the Pentagon (New York Times, 4/20/08). The most revealing aspect of the arrangement, however, may have been the near-total silence from the broadcast and cable outlets who put the Pentagon pundits on the air (FAIR Action Alert, 4/22/08)—suggesting that becoming conduits for a propaganda campaign (“message force multipliers” was the term) was not something the outlets felt they needed to explain to the public.

A survey of reporters by the Project for Excellence in Journalism (3/17/08) found that large majorities of print and television reporters believe that financial pressures on their news organizations have increased; about a quarter say owners and advertisers exert either a great deal or a fair amount of influence in their newsrooms. Nearly half of Internet-based reporters (who, in the PEJ study, are mostly employed by those same print and TV outlets) see such influence—which might temper the enthusiasm of those who look to the Internet to save journalism.

Advertiser influence

“From increasing demand for editorial credits and ads disguised as editorial content to calls for cover presence, advertisers are ratcheting up pressure on magazines for treatments that blur church-state lines, according to editors, publishers and media buyers,” reported AdWeek (7/14/08).

While the magazines in question are less “newsy”—Harpers Bazaar, Parents and Life & Style were mentioned prominently—these trends are worrisome. The economic climate seems to put even more pressure on corporate news media to go the extra mile for advertisers. No surprise, then, to see Fox News Channel host Bill O’Reilly announce (1/31/08), “One of the sponsors here is Liberty Mutual, and I’m very impressed by their new ad.” After the ad aired, O’Reilly declared: “For encouraging kindness and generosity in America, the Liberty Mutual people are patriots.”

In a New York Times magazine profile of syndicated talker Rush Limbaugh (7/6/08), we learn that the host has a “new option” for some advertisers: “At a much higher rate, he will weave a product into his monologue.” (To a caller who said he took two showers after voting for Hillary Clinton as part of Limbaugh’s Operation Chaos, Limbaugh responded: “If you had followed my advice and gotten a Rinnai tankless water heater, you wouldn’t have needed to take two showers. And I’ll tell you why....”)

Along the same lines, Forbes.com (4/17/08) reported that “many papers remain hampered by insufficient communication between the editors and writers generating content and those on the business side charged with selling it to advertisers.” Of course, that lack of communication is exactly the way things are supposed to work at an ethical media outlet, but “the newspaper industry’s increasingly grim financial outlook leaves editors with little choice but to work across the aisle.” According to Forbes reporter Louis Hau, editorial staffers at the Gannett-owned Des Moines Register are increasingly involved in projects coordinated with the advertising department—a sports editor, for example, “confers with advertising to determine what they can do together” before coverage of high-profile events. The changes “wouldn’t have happened 10 years ago,” according to the paper’s editor.

At one magazine industry event (Folio Mag.com, 4/16/08), there was discussion of the need “to blow up the church-state boundary between advertising and editorial.” According to a PR Week survey (6/23/08), that boundary is not so difficult to overcome. The magazine found 19 percent of marketers admitted to having “bought advertising in return for a news story about their company or product,” and 10 percent said they “have had an implicit/nonverbal agreement with a reporter or editor that advertising will result in favorable coverage.” Eight percent had “either paid for or provided a gift to an editor in exchange for a news story about their company.”

Some examples are remarkably straight-forward; at the Las Vegas Fox affiliate KVVU, sitting at the morning show desk with the anchors are McDonald’s iced coffees (which are actually undrinkable props). The station’s news director, Adam P. Bradshaw called the arrangement a “nontraditional revenue source,” according to the Las Vegas Sun (7/21/08). Bradshaw seemed to think the incident bolstered the journalistic credentials of his station’s news staff (New York Times, 7/22/08): “There was a healthy dose of skepticism, and I’m pleased there was—it means they’re being journalists.” The Times report also revealed that KVVU parent company Meredith was accepting product placements on its local morning shows in other markets, and that McDonald’s has struck similar deals with local Fox stations in Chicago (WFLD) and Seattle (KCPQ), as well as Univision 41 in New York City.

Pay-to-play

McDonald’s isn’t the only corporate entity looking to place itself in the news. In Dallas, local station NBC 5 had an arrangement to feature sources from the local Children’s Medical Center in its weekly “Children’s Health Check” report, which airs on the station’s morning newscast. The deal, according to former Dallas Morning News TV reporter Ed Bark (UncleBarky.com, 2/18/08), was arranged by a local advertising agency and costs the hospital somewhere between $250,000 and $300,000. “This is a sponsorship. They don’t control editorial content,” news director Susan Tully explained. “They give us resources and story ideas, but we decide what we’re going to cover, how we’re going to cover it.” Such assurances are hard to swallow, given that the station is relying solely on sources from the hospital footing the bill.

According to a report in the Charleston Gazette (3/28/08), West Virginia’s Division of Natural Resources (DNR) pays $90,000 to local TV station WCHS to produce “West Virginia Wildlife” segments on its newscast. “While the station does acknowledge the sponsorship, there is no indication during the news broadcast that ‘West Virginia Wildlife’ is any different from other news segments,” the paper reported. “But unlike other advertisers, who might sponsor the station’s weather coverage every night, DNR dictates its own coverage.”

The contract between the station and the government agency also requires that the station cover two events of the agency’s choosing. “I don’t think I have any issues with the segment at all,” said station news director Matt Snyder. “The DNR wanted a news station to show it in the best light possible.”

 

Power and PR

The Infinite Mind was heard across the country for years—until 2008, when the host’s deep conflicts of interest came to light. As reported by Slate (5/9/08), a panel Dr. Fred Goodwin convened on his radio show (3/26/08) to discuss Prozac comprised a curious bunch, and failed to include important disclosures: “All four of the experts on the show, including Goodwin, have financial ties to the makers of antidepressants. Also unmentioned were the ‘unrestricted grants’ that Infinite Mind has received from drug makers, including Eli Lilly, the manufacturer of the antidepressant Prozac.” Slate reported that the Prozac show

may stand in a class by itself for concealing bias. In addition to the show’s unrestricted grants from Lilly, the host, Goodwin, is on the board of directors of Center for Medicine in the Public Interest, an industry-funded front, or “Astroturf” group, which receives a majority of its funding from drug companies.

The Infinite Mind story was picked up by the New York Times months later (11/22/08), and the paper reported that—as uncovered by investigations by Sen. Charles Grassley (R-Iowa)—Goodwin “earned at least $1.3 million between 2000 and 2007 giving marketing lectures for drug makers, income not mentioned on the program.” The Times noted that “Goodwin’s radio programs have often touched on subjects important to the commercial interests of the companies for which he consults.” Though Slate reported difficulties in getting comments from Goodwin or others related to the program, the Times had more luck:

In an interview, Dr. Goodwin said that Bill Lichtenstein, the program’s producer, knew of his consulting activities but that neither he nor Mr. Lichtenstein thought that “getting money from drug companies could be an issue. In retrospect, that should have been disclosed.” But Mr. Lichtenstein said that he was unaware of Dr. Goodwin’s financial ties to drug makers and that he called Dr. Goodwin earlier this year “and asked him point-blank if he was receiving funding from pharmaceutical companies, directly or indirectly, and the answer was, ‘No.’”

NPR announced that the show would be pulled from their satellite service.

And problems of disclosure were seen elsewhere. In a segment about the government’s action to rescue mortgage giants Freddie Mac and Fannie Mae, CNBC turned to former Clinton administration official Howard Glaser for comment. Viewers heard Glaser call the government action a “message of confidence” and a “good move.” What they did not hear, though, was any acknowledgment that Glaser was a paid consultant for the very same mortgage companies (Politico, 7/16/08). The Politico added that Glaser became “something of a media go-to guy,” appearing in the Associated Press, New York Times, Congressional Quarterly and CBS Evening News.

Such arrangements are not unusual. As the St. Louis weekly the Pitch reported (7/28/08), telecom analyst Jeff Kagan’s name is familiar in reports about wireless companies like Sprint; he’s been cited dozens of times over the past two years, and about half of those cites appeared in the local Kansas City Star. What was not known to readers, or apparently to the Star reporter who kept dialing him up, was that Kagan was a paid consultant to several large corporations, including Sprint. The Star’s Jason Gertzen explained that while he is “usually pretty careful” about checking sources’ conflicts of interest, he wasn’t sure he had done so with Kagan. Checking Kagan’s past wouldn’t have been so hard; his role as a paid corporate pundit had been reported by the New York Post in 2006 (Extra!, 3-4/07)

Some of the changes in the media industry have made it easier for corporate flacks to sneak into the news. As Adam Weinstein reported in Mother Jones (1-2/08), when the Florida-based Tallahassee Democrat looked for local voices to “fill out the paper’s local coverage,” they turned to Stacey Getz, who was publishing a popular local blog. The paper began printing some of her blog entries in its Metro section. In one instance, she wrote about proposals to build a Wal-Mart, which had engendered local opposition—leading her to ponder why “the mere mention of [Wal-Mart] turns some otherwise reasonable people into illogical lunatics.” Unbeknownst to readers of the paper, Getz was actually a PR flack who had recently worked on behalf of a local Wal-Mart.

In Boston, local CN8 TV anchor Barry Nolan learned a different kind of lesson: Be careful what you say about other powerful media figures. When Nolan learned that Fox’s Bill O’Reilly was set to receive the Governors Award at the New England Emmy awards, Nolan thought the intemperate, factually challenged cable loudmouth (Extra!, 5-6/02) wasn’t exactly the kind of person whose record deserved celebrating, and decided to protest by passing out a document with quotes from O’Reilly’s sexual harassment lawsuit (Boston Herald, 4/11/08). But he apparently drew more attention than his Comcast employers liked; as Nolan later wrote (Think Progress, 5/27/08): “I got fired from my job on a news and information network for reporting demonstrably true things in a room full of newspeople.”

 

For a peek behind the corporate media curtain read the sidebar to this article,"Speaking Up".