Peter T. Grauer, chairman of Bloomberg LP, spoke with perhaps more candor than he intended in responding this week to questions after a speech to the Asia Society in Hong Kong.
Grauer told the audience, as the Times puts it, that the company should have “reconsidered articles that deviated from its core of coverage of business news, because they jeopardized the huge sales potential for its products in the Chinese market.”
Acknowledging the vast size of the Chinese economy, the world’s second-biggest after that of the United States, Mr. Grauer, said, “We have to be there.”
“We have about 50 journalists in the market, primarily writing stories about the local business and economic environment,” Mr. Grauer said in response to questions after a speech at the Asia Society. “You’re all aware that every once in a while we wander a little bit away from that and write stories that we probably may have kind of rethought — should have rethought.”
Bloomberg, remember, was in the spotlight last fall after several staffers, speaking anonymously, told The New York Times, the Financial Times and others that a story probing China’ s richest tycoon was spiked, and that top editor Matthew Winkler gave as a reason to reporters that the news organization’s journalists might be expelled from the country. (Bloomberg at the time declined comment on Winkler’s discussions with reporters, but said the story was never spiked and was just not ready.)
Bloomberg suspended, then dismissed a reporter, Michael Forsythe, as a result of the leaks. Forsythe has since joined the Times.
Winkler’s reasoning—not running a story in order to avoid getting its journalists kicked out—would be problematic on its own. But the affair also raised questions about whether Bloomberg would trim its journalism for business reasons, namely, fear that Chinese authorities would block the data-provider from selling its expensive terminals in the all-important China market, the world’s second largest.
Grauer’s appear to confirm that Bloomberg would do precisely that.
As an unnamed former Bloomberg executive said in a previous Times story on the topic:
“If you have a $9 billion company that is about to be crippled by a news division that loses $100 million a year, shouldn’t you take a breath and think about the implications of what you are doing?” the former senior executive said.
A Bloomberg spokesman declined to comment on Grauer’s remarks to the Times and
hasn’t responded to an email from to me.
While from a business point of view, Grauer’s remarks make plenty of sense, from a journalism point of view, they are highly problematic.
For one thing, the Times, and Bloomberg itself, seem to believe there is some bright line between financial journalism and investigative journalism, which is really in-depth reporting that might anger someone. The Times:
Mr. Grauer’s comments on Bloomberg’s journalistic priorities in China reflect what some Bloomberg employees say is a re-emphasis on financial news, and skepticism from the business side about whether investigative journalism is worth the potential problems it could create for terminal sales.
But it’s impossible to draw a line between one and the other, and one often leads to the other, and vice versa. Say a ”business” story about a failing company turns up accounting problems, and that leads to discoveries of irregular transactions with a related party, and the related party turns out to be controlled by a local political boss, and the local political boss has business interests with senior part officials, etc. Where does the reporting stop, exactly?
And another thing: it’s not clear how Bloomberg’s 300,000-plus subscribers—many of them investors in China— are well-served by a news service that purports to cover a country but declines to engage in “investigative” stories that might document institutionalized corruption. Speculators and traders might not care about such things, but investors with long-term interests might care a lot.
Third, and most important, the specter of Bloomberg implicitly or explicitly curbing its journalism in China affects more than its coverage in a single country and speaks to the integrity of Bloomberg News, certainly in the dictionary sense: “The state of being whole, entire, undiminished.” Just as Bloomberg can’t hive off “investigative” reporting from “financial” or “business” reporting, it can’t pretend that its China news policy, whatever it may actually be, doesn’t have implications for the rest of the news operation. Can a news organization follow a set of guidelines in one country and another set in another? I don’t see how.
Integrity is something Bloomberg, the company and the news organization, takes very seriously. As its style manual, the Bloomberg Way, says (emphasis in the original): “Three things characterize the people who follow the Bloomberg Way: integrity, commitment, and gratitude. Without integrity, there is no value in anything we do…”
Elsewhere, it says:
A conflict of interest is an economic, personal or political relationship that might compromise a journalist’s impartiality. Always discuss and try to resolve a conflict of interest before it becomes an issue. When it cannot be resolved, err on the side of disclosure.
We are in the often-difficult position of reporting on our customers. Altering a story because it embarrasses a company or individual would create the perception that we shade our news judgment under pressure, and that would cost us our integrity.”
As I said earlier, Bloomberg’s willingness to take on its other big market, Wall Street, has never been called into question. It’s been among the leaders, for instance, in trying to hold the big banks accountable for the financial crisis.
On the other hand, as I wrote, its business model is different from that of other media companies. The content of its news is not its main selling point. Its financial data and analytics are. News is only one of the tens of thousands of items that go into a Bloomberg terminal, and it’s never been clear how much value the news division adds to the box. And China as a market is different from Wall Street because essentially one customer, the government, controls access, whereas on Wall Street, that’s not the case. The bottom line is that Bloomberg’s model creates powerful incentives to sacrifice the news to business interests, and yet the news division has remained remarkably independent over the years.
Grauer’s remarks were unscripted and off-the-cuff, and that’s worth emphasizing.
But the company needs to revisit this issue more formally and seriously consider what it’s trying to do with its news division in China.
And then err on the side of disclosure.
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