In the digital age, The New York Times treads an increasingly slippery path between news and advertising

The April 2 edition of the Sunday New York Times, where the paper features its best journalism, included a six-page special section, “Women Today,” pegged to a summit in Manhattan a few days later.

The featured piece, on the state of the women’s movement, was by Tina Brown, the well-known journalist who founded the summit. In addition, eight women participating in the conference offered brief first-person accounts, and other articles appeared on topics that ranged from campus feminism to abortion.

What wasn’t in any of the stories was the fact that the Times itself owned a minority stake in the conference. Although the paper’s own standards call for transparency in this area, the section didn’t disclose the paper’s financial interest.

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These sections, often paired with Times-backed live events, are a growing part of the business model of what has been the newspaper of record, and just one example of the extent to which the newsroom and the company’s marketing department now work together in an effort to generate new sources of revenue. The editor of these sections meets once a week with the advertising department to discuss possible projects, while the advertising studio of the Times acts as a matchmaker between reporters and sponsors.

In one sense, such initiatives might be seen as the new normal, as newspapers like the Times scramble for creative approaches in an industry whose finances are growing creakier by the day. But the Times is a unique beast, in journalism and within its own midtown Manhattan tower, and a bevy of new initiatives being rolled out to buoy the company’s bottom line worry journalists at a paper that has long maintained a firm separation between its news and  business operations. Continuing job cuts in the newsroom, even as the business side of the paper continues to grow, have made those tensions even more acute.

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Maybe I was too hard-line, but I believed in the wall [between the business and news sides of the Times].”

 

It is a divide that was memorialized three years ago, in a widely cited innovation report that promoted greater cooperation between business units and journalists, arguing that enforcing their separation was archaic in a digital age. And its recommendations were implemented, opening new avenues for the paper to successfully engage with its audience. But the 2014 report also drew a line: The advertising arm of the company should remain “walled off” from the newsroom, it stated. Around the same time, senior editors introduced a cooling-off period before employees from the advertising studio could work in the newsroom.   

Today, the paper is actively ignoring some of those recommendations, amid increasing signs that one of the last remaining firewalls in journalism is crumbling.

Dean Baquet, who has been executive editor of the paper since May 2014, says flatly that the traditional news-advertising divide has become a luxury the Times can no longer afford.

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“I came into this place fighting for the survival of The New York Times,” Baquet says in an interview. Pulling that off, he says, required cooperation with the business side. “If the newsroom hadn’t been a strategic partner, we either wouldn’t have made it, or we would have made it on terms we don’t like.”

But not everyone at the Times is happy with the way Baquet has navigated the divide. Some of that friction became evident near the end of the three-year tenure of Jill Abramson, Baquet’s predecessor as executive editor. In an interview, Abramson discloses two “major showdowns” she had over the newsroom’s relationship with the business side, shedding additional light on the accepted narrative surrounding her departure from the paper. One confrontation involved a request by Mark Thompson, the chief executive officer of the company, for the newsroom’s help in digital initiatives, a request Abramson dramatically spurned. The other clash, with Baquet, was over the proposed one-year cooling-off period; Abramson favored an outright ban on advertising employees moving to the newsroom.

Other tradeoffs, over placement of ad-driven stories such as The Daily 360, a sponsored video that gets prominent play on the paper’s homepage, and fissures in the newsroom over the increasing blend of marketing and journalism, have emerged more recently. One involved a particularly controversial conference this past March at a Ritz-Carlton luxury resort in Half Moon Bay, California. The clash, according to Times staffers, centered on the differences between access reporting and accountability journalism.  

 

The transition from Abramson, the first female executive editor, to Baquet, the first African-American in that role, was a painful episode for the Times. Reporting on their differences has not been easy for me.

I worked with, and under, both of them during my career at the paper, which began in 1976 and ended at the start of 2006. They both agreed to speak with me for this piece, as did some 50 other current and former Times journalists and executives.

I have tried to be impartial, staying true to the credo of the Times that dates back to 1896, and open to the technological and cultural changes that have redrawn the media landscape since my departure 11 years ago.

One indisputable success has been the Times’s creation of a digital paywall. The paper now has more than 2 million digital subscribers, and this new revenue source—$223 million last year—helped turn the company’s fortunes around after it had to be rescued in 2009 by Mexican billionaire Carlos Slim. While Slim still owns 17 percent of one class of stock, the company is controlled by another class, owned by the heirs of Adolph Ochs, who bought the paper in 1896 and crafted its credo of presenting the news “without fear or favor” at a time when the paper was seen as close to the Democratic Party. The publisher, Arthur Sulzberger Jr., represents the fourth generation of family control, and his 36-year-old son, Arthur Gregg Sulzberger, is the deputy publisher. Both are committed to upholding the family tradition.

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But Thompson, who arrived at the Times in 2012 from the BBC, hasn’t always been so firm as he’s navigated the news and business sides of the company. For instance, while he praises Abramson in an interview for setting clear ground rules on branded content “that made it something the newsroom could live with,” the two of them had a significant clash in 2014 that left her feeling increasingly alienated.

Abramson says she and Thompson were discussing “revenue-producing products,” and Thompson said something like, “All of the ideas should come from the newsroom.” What offended Abramson was the dramatic shift in responsibility signaled by Thompson’s request. “I didn’t want the energy of our journalists focused on revenue-producing products,” she tells me.

Her response to Thompson: “If that’s what you expect, you have the wrong executive editor.”

 

In recalling the exchange now, Thompson agrees that’s how Abramson responded, but remembers his proposal differently: He recalls telling her “the newsroom should play a central role in developing the digital strategy for the company.” He “didn’t mention revenue,” and “that’s a very big difference.”

(I presented the two competing recollections to another person who was there. This person declined to speak on the record, but recalled the flap and confirmed Abramson’s recollection. Baquet says, “Mark has never said we need to produce revenue-driven stories.”)

Abramson admits she may be too much of a purist in an era when lines are blurred and changes unending. (She currently writes a column for The Guardian, a publication that competes for online readers with the Times and is facing financial pressures.)

“Maybe I was too hard-line,” she says, “but I believed in the wall [between the business and news sides of the Times].” She also recognizes that it’s hard in digital “to decide whether technology and design are business or news, so the wall is not so easy to design or maintain.”

At another moment in 2014,  Abramson returned from a business trip in China to find that Baquet and another editor had come up with the idea for the cooling-off period before employees could shift between the studio and the newsroom.

Abramson wanted a ban, period. “When I came back,” she wrote in an email to me, “I intended to rescind this” cooling-off period, because, in part, “writing ad copy and news were two different skills.”

She recalls a “heated conversation” with Baquet, in which she argued “forcefully.” Baquet, she says, found her to be unbending, and told her, “You never want to listen to anyone who disagrees with you.” Baquet recalls telling Abramson she was being “unreasonable.”

The ban was not rescinded, and before long Abramson was fired. Sulzberger says these disputes had nothing to do with it, while Abramson feels her resistance to cracks in the wall contributed to her dismissal.

Baquet explained to me why he supported the cooling-off period. “It’s ridiculous to say that somebody in their 20s, who needs to make a nickel, who is a videographer at T Brand [the Times’s advertising studio], has to eat, [and] lives in a studio, is banned for life from journalism.”

He also acknowledged that his hiring last September of someone from the T Brand studio to assume a key newsroom post “probably violated the one-year cooling-off period,” but argued that his decision was, nonetheless, correct.

 

Charles Duhigg is an award-winning Times journalist as well as a best-selling author of business books. He was also a co-author of the paper’s 2014 innovation report, which called for the Times newsroom to remain walled off from the paper’s advertising arm. After Baquet became executive editor, he encouraged Duhigg to take a leadership role in some of the collaborations between business and the newsroom.

Duhigg and Baquet had met years earlier at the Los Angeles Times, where Baquet, who was that paper’s editor, still recalls the “painful, searing experience” of presiding over a newsroom that lost 400 jobs in five years. Baquet hired Duhigg, who had started out as an entrepreneur, running an education company in New Mexico that consulted for nonprofit universities.

Baquet, who had worked at The New York Times as a reporter and editor from 1990 to 2000, left Los Angeles to return to the Times in 2007, lured back in part by Abramson. He reconnected with Duhigg, who had been hired by the Times the year before Baquet returned.

In April 2015, Baquet, by now running the paper, announced that Duhigg, who he called “one of our biggest stars,” would become the newsroom leader for the company’s events and conference business, working alongside a senior vice president from the paper’s corporate side, Dorothea Herrey. The expanding  unit, called NYT Live, is part of a small but growing segment of the corporation that includes other Times units like the product review and recommendation site Wirecutter. Those affiliated companies brought in about $94 million last year, or 6 percent of the company’s total.

A few months later, Duhigg helped craft a code of conduct to ensure the events adhered to the ethical standards of the newsroom, including being fair and open with parties and “transparent in our dealings.”

Duhigg stepped down from his post last October to become a senior editor and columnist but continues to participate in some Times conferences, including the one in March at the Ritz-Carlton in Half Moon Bay. The two-day event, called the New Work Summit, cost $4,000 to attend. Featured speakers included the chief executives of YouTube and Chobani, as well as the filmmaker Lee Daniels.

 

She recalls a “heated conversation” with Baquet, in which she argued “forcefully.” Baquet, she says, found her to be unbending, and told her, “You never want to listen to anyone who disagrees with you.” Baquet recalls telling Abramson she was being “unreasonable.”

 

Duhigg had been working for months to entice Ray Dalio, a prominent but controversial hedge fund executive, to attend. It was, in some ways, a long shot. The Times, like many news outlets, had been tough on Dalio and his firm, Bridgewater Associates, which is run on a philosophy of radical transparency, in which 99 percent of all meetings are taped. A Times piece in the summer of 2016, which described the fund’s culture as a “cauldron of fear and intimidation,” had prompted a sharp retort from Dalio, who insisted the reality was “exactly the opposite.”

So a few weeks later, in an email pitch to Dalio for the conference, Duhigg sought to smooth over any concerns the executive may have had about the newspaper’s coverage. “I can think of no one better than you to describe how a company can build a strong culture that encourages creativity, excellence and innovation,” Duhigg wrote.

Dalio accepted. Unbeknownst to Duhigg, a reporter who covers hedge funds, Alexandra Stevenson, who sits near Duhigg  at the Times, was working on a story, with a colleague, about Bridgewater that wound up in the newspaper the day the conference opened. The story, based on interviews with employees, suggested that the company’s work environment could be “intimidating” and helped explain why as many as one third of its 1,500 employees leave within two years of being hired. The story excerpted part of a statement from Bridgewater and linked to the full text, in which the company told the reporters it would be “misleading and untruthful” not to include in the story what Duhigg had told Dalio in his invitation.

The day after the piece landed, Duhigg interviewed Dalio live on stage. After a few minutes talking about Bridgewater, Dalio started to lambast the Times for its “ridiculous” piece the day before. Dalio told Duhigg he thought it had been “intentionally done incorrectly.” Duhigg let Dalio speak his mind and twice during the interview brought Dalio back to the subject of the Times, which Dalio proceeded to criticize again.

In New York, Duhigg’s two business-desk colleagues, who wrote the Bridgewater story, were watching the Dalio interview. They quickly posted a piece that included Dalio’s criticism of their story, but they also noted that Bridgewater had “confirmed” the episodes at issue and quoted a spokeswoman for the Times saying the paper stood by the original story. Later, at the end of the day in California, after Dalio was gone from the stage and as the conference was winding down, Duhigg offered a short defense of the Times, saying he “unequivocally disagreed” with Dalio’s remarks that the Times sensationalized news.

Dalio wasn’t finished needling the Times. He uploaded a video of himself blasting the paper, distributing it through LinkedIn. In response, Duhigg urged viewers to also look at what he’d said at the end of the conference.

But Dalio wanted the last word. He bought online ads featuring his interview with Duhigg. Some ran in the Times.

 

In the first months of 2016, Duhigg was toying with video, seeing it as a possible extension of the live-events business he was helping to lead. One possible project involved General Electric, which expressed initial curiosity about some of his ideas on productivity. GE’s chief marketing officer, Linda Boff, said the company became interested after the Times “came to us with the idea to build a partnership around the franchise of content centered on the work of Charles Duhigg.”

Duhigg’s second book, Smarter Faster Better, about productivity, was due out that March, and had a section about GE and its SMART goals program.

Duhigg remembers that the business side of the Times “pitched” GE, even though Duhigg obviously was familiar with the company from his work on the book. The parties had a meeting at the Times, which included Duhigg and advertising executives from the paper. In the end, the project didn’t move forward. Still, Boff writes in an email to CJR, “We appreciate having a partner who understands our story, brings forward strong ideas and is willing to co-create innovative programs with us, which is certainly the case with the NYT team.”

Later that year, Duhigg began collaborating with Kaylee King-Balentine, who had just been named director of shows and series for the newsroom’s video unit, a team of some 50 journalists. King-Balentine’s experience was in video, though she had studied journalism in college. She came from the T Brand International studio in London, where she was a director.

T Brand, which started in 2014, early in Thompson’s tenure, has grown rapidly as the newsroom continues to shrink. The operation now has 108 employees, and its editors all have “journalism roots,” according to a Times spokesperson.  

 

Baquet says he thinks highly of King-Balentine but also acknowledged that her hiring in the newsroom “probably violated the one year cooling-off period.”

“I thought she was the best qualified person for the job,” he says, “and I didn’t think she had done anything in her T Brand life that should disqualify for their job, honestly.”

King-Balentine became the executive producer of Duhigg’s four-part “Art of Better” video series, which the marketing side of the Times convinced ADP, the data processing company, to sponsor. T Brand played “matchmaker” and put ADP together with Duhigg, according to Andy Hilton, ADP’s vice president for communications and brand. After the contract was signed, Duhigg recalls a lunch with ADP executives, part of what he called a “reporting exercise” to learn more about the company. (No Duhigg story about the company ever appeared.)

The video series began airing last December and was promoted via social media and  newsletters run by the newsroom. This is one of the “tradeoffs” common in the digital world, where journalists’ projects—some sponsored, some not—vie for attention with more traditional news, according to Joe Kahn, managing editor of the Times.

One advantage for ADP was that, for a time, its own video—essentially an ad produced by the company—was part of the Duhigg series. After one of Duhigg’s four videos aired, a branded-content ADP video, produced by T Brand, popped up next. The only difference between the two was a small disclosure on the ADP videos, noting that it was produced by T Brand and paid for by ADP.

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Thompson told me the Duhigg video project, mixing branded content with newsroom fare, is “rare” but acceptable as long as “the distinctions” between the two products “are clear to the user.” On an earnings call in early May, company executives told analysts that branded content was “paying off” as a tool in the digital advertising toolkit.  

The CEO also maintained that the wall between the advertising department and the newsroom remains strong. That view is not universally shared in the third floor newsroom, where some journalists have a different definition of the wall. One of them, who spoke on the condition of anonymity for fear of repercussions, described the mix of marketing and journalism, such as the conference in Half Moon Bay, as part of a “battle for the soul of the institution” pitting “access journalism” against accountability reporting.

 

It’s ridiculous to say that somebody in their 20s, who needs to make a nickel, who is a videographer at T Brand [the Times’s advertising studio], has to eat, [and] lives in a studio, is banned for life from journalism.”

 

One week before the election, for instance, the Times began running—and prominently promoting—a daily 360-degree, or virtual reality, video. The videos are sponsored by Samsung, which also supplied the cameras, while the newsroom controls the content.

The arrangement has raised eyebrows in the newsroom, not because of  control over the content, but because of the high-profile spot given on the Times home page to what is, in some respects, an ad. Newspapers have always depended on advertisers, but in the digital age the relationship is different. The Times, like other media outlets, guarantees advertisers a certain number of views. This leads to promotion of ad-driven stories, sometimes at the expense of other pieces. “Ad-driven features today get digital placement that is akin to being on the front page of the print paper,” said one Times staffer, who also asked not to be identified for fear of repercussions. The staffer worries readers will be left wondering if the placement is “because of an advertiser or because it is journalistically worthy.”

Kahn, the managing editor, said the question was “a fair issue,” and that the Times “couldn’t do that”—promise such a prominent display—for “30 different sponsor features.”

Kahn says the Samsung deal emerged from two overlapping ideas: The newsroom had been experimenting, successfully, with virtual reality, while Samsung “came up with the ambitious plan to sponsor one VR thing a day, which is a lot.” (While the Times wouldn’t discuss terms of the deal and Samsung didn’t reply to an email, two Times journalists said Samsung agreed to pay $14 million for the arrangement.)

The revenue-hungry Times could hardly afford to turn down the South Korean conglomerate’s offer: $14 million is about 20 percent of the entire digital advertising revenue reported by the company in the last quarter of 2016. It also represents almost half the company’s reported net income for the year.

In the fourth quarter of last year, the paper experienced a sharper-than-expected drop in print advertising, about 20 percent, a decline that continued into the first quarter of 2017.

 

On March 30, an internal email from two corporate officials and two senior editors told staffers about a new initiative called “Smarter Living.” One of its components, a series of guides in such areas as cooking and business, “continues to be an effective sales tool for our partners in advertising,” the announcement noted.

A component feature already underway involves a symbiotic relationship between the newsroom and the company’s largest acquisition last year, at $25 million, of the product review and recommendation site Wirecutter. Even before the new initiative, Times reporters wrote stories about Wirecutter-reviewed products, from laptops and headphones to wine glasses and smart devices.

Photo by Orjan F. Ellingvag/Dagens Naringsliv/Corbis via Getty Images

Photo by Orjan F. Ellingvag/Dagens Naringsliv/Corbis via Getty Images

The arrangement is problematic because of the way Wirecutter works. Wirecutter has an affiliation with Amazon—and other outlets—whereby it, and thus The New York Times, gets a commission for any sales to readers who buy from the site. The paper’s public editor wrote a column last October, shortly after the Wirecutter deal was completed, pointing out that the Times was now in the business of reviewing and selling items such as toaster ovens. (The latest round of newsroom staff reductions, announced a few weeks ago, included the elimination of the public editor.)

Eric Asimov, the Times’s wine critic, wrote a story on wine glasses, based on reviews by SweetHome, a unit of Wirecutter. Asimov said the assignment came from an editor and he was “blown away” with how thorough the reviewers were. The critic says he was given “journalistic freedom” to write his piece.

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However, he says he was initially hesitant because “I didn’t want to be involved in anything that is an arm of Amazon.”

Wirecutter’s website, in an unsigned Q&A, notes that there is “a bias to write about a lot of things with affiliate codes threaded in them,” but “we think it’s less of a conflict of interest than traditional advertising.”

A commenter to the public editor’s column raised a different issue about the credibility of Wirecutter, comparing it, unfavorably, to Consumer Reports. The commenter called Consumer Reports the “gold standard” for reviews, and noted it “buys every product they test retail just like consumers,” in contrast to Wirecutter’s procurement practices. (Consumer Reports confirmed to me that they use anonymous buyers to purchase the products they review.) The Times product review unit, on its website, says “we obtain the products we review through a mixture of buying our own and working with companies to borrow review units.”

Wirecutter, Baquet says, is “incredibly open and transparent,” with “truly high standards.”

In early May, in a presentation to analysts, the Times highlighted the affiliate income generated by Wirecutter as a promising revenue source.

 

As the announcement of these new collaborations was being absorbed inside the paper, Times readers were offered a “live chat” with Tina Brown, the well-known journalist who has nicely enhanced her brand with help from the Times.

In late 2014, the company announced that it was investing in Brown’s company, Women in the World Media, which hosts a high-profile annual summit. Thompson and Brown, in the release, praised each other’s franchises. The deal gave Brown’s website a broader platform, putting it under the auspices of the Times, though she retained editorial control. (That provision would later prompt questions from Times readers and lead to a January column by the paper’s public editor highlighting the potential for confusion over whether Brown’s site carried Times editorial content.) The joint venture also called for the Times to find sponsors and advertisers for Brown’s events, in effect turbocharging the marketing of her brand.

A few months later, in a quarterly filing, the Times said it was investing $2.3 million for a 30 percent stake in Brown’s company. As a result, the joint venture with Brown became a subsidiary of The New York Times. (Thompson, in an interview, initially disputed that Women in the World was a Times subsidiary, but later clarified that the paper’s interest was non-controlling because the Times owns less than 50 percent of Women in the World Media.) Brown’s company has offices on the 17th floor in the Times building, not far  from where I interviewed Thompson.

The live chat with Brown on the Times’s website, a few days before her annual summit, was conducted by a senior Times journalist, Susan Chira, and largely based on questions from readers. It was organized by a business unit that handles subscriber events, according to a Times staffer.

A few days later, a long feature piece by Brown, labeled as opinion, appeared in the six-page special print section. It also ran online. Brown wrote about the state of the women’s movement in the Trump era and discussed her role in founding the summit. The section also featured brief writings from eight of the participants in the summit and mentioned Vital Voices, a nonprofit women’s advocacy organization that Hillary Clinton played a key role in creating in the 1990s, and where she later served as honorary co-chair. (Brown has also been a director of Vital Voices.)

According to the website of Women in the World, Vital Voices “receives a share of the proceeds of the Women in the World Summit each year.” Thompson says he was unaware of this arrangement. A Times spokesperson later said Brown’s group made “two small annual donations” to Vital Voices, but they “no longer share ticket sale proceeds.”

 

None of the articles in the section disclose the interest of the Times in the summit. However, a full page Toyota ad, at the back of the section, mentions, in small print and at the bottom of the page, that the summit is “In Association With The New York Times.”

Baquet, asked about the disclosure, says the stake of the Times “should have been made clear. This is new territory for us.”

The senior editor in charge of the special sections, Trish Hall, agreed and says that if it were done again, “we would say somewhere in the section that The New York Times owns a stake in Women in the World.”

Hall explained that special sections like this involve “journalism we want to do, but [that] we don’t do without advertisers.” She added that she meets once a week with the advertising department to discuss potential projects.

“For print sections, we don’t do them if we don’t get advertisers,” Hall explains, “but we don’t do them for advertisers.”

The women’s summit opened at Lincoln Center a few days after the women’s special section ran, with Clinton as the featured speaker. It sold out, even with prices for the day of Clinton’s remarks ranging from $100 to $350 per ticket. Clinton, who worries about her interactions with journalists, gave one of the first interviews since her electoral defeat. She was questioned by Nicholas Kristof, a columnist for the Times and a fierce Trump critic. The Times and most other media did stories about the interview, as did Kristof himself. He wrote that Clinton “seemed relaxed and comfortable, much less guarded than during the campaign.”

In the interview, Clinton said her defeat had been “so devastating,” since she had expected to win.

A few days later, Trump gave an interview to another New York journalist, Michael Goodwin, of the New York Post. Trump riffed on the Times, a favorite target, noting that “if Hillary had won, they’d be closing up shop by now.”

“Lucky for them I came along,” Trump said, to save “a failing dead paper.”

 

Up next: The unexpected ties between Donald Trump and the Times.

 

*Disclosure: Kyle Pope, editor in chief and publisher of CJR, is married to Kate Kelly, a New York Times business reporter. In addition, two senior Times editors, James Bennet and Rebecca Blumenstein, serve on CJR’s Board of Overseers.

Photo by Orjan F. Ellingvag/Dagens Naringsliv/Corbis via Getty Images

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Jeff Gerth is a freelance journalist who spent three decades as an investigative reporter at The New York Times.