the audit

Business Writing for Everyone

LAT provides needed context for the non-specialist; others don't
January 9, 2008

Business stories can be hard to tell. The larger arc of a business story—say, a company’s rise or fall—is often years long, with newsworthy financial information flowing in a near-constant stream. All these dribs and drabs of news create a big picture over time, but it’s one that often escapes the reader who doesn’t follow every update.

Articles in the business press too often lack details that help put the story in context. We don’t always need much—we’re not asking for a history of banking every time we read a story about JP Morgan Chase—but sometimes a few, well-crafted sentences by a knowledgeable reporter are essential to clarifying a piece for the general reader.

Maguire Properties Inc. is one of the largest office landlords in Southern California, controlling a good deal of downtown Los Angeles, including some of the city’s most prominent buildings. Founder Robert F. Maguire III, at seventy-two a veteran landlord and developer, took Maguire Properties public as a real estate investment trust in 2003. Investors punished the company’s stock for most of last year after it paid top dollar for a huge office portfolio just before the credit crisis hit. By September, Maguire shares were off 44 percent on the year, but a December announcement that the company might be for sale helped it rally to end down 26 percent by year’s end.

By that time, the story had become complicated enough that the announcement generated a variety of leads, and news outlets had to leave out pieces of information. Sometimes they left out too much. This is largely a function of space constraints, but not wholly. After all, the Gettysburg Address was just 272 words, and it summed up the entire civil war.

Some outlets dropped more than others, presenting only the news. Others hinted at the larger story but didn’t fully tell it.

Still another gave most of what we needed without quite putting it all together, but only one gave a sufficiently complete, and sufficiently clear, version.

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It’s the latter two stories that interest us here.

Here’s the L.A. Times summing up the story elegantly in the first two paragraphs:

A corporate battle for control of the largest office landlord in downtown Los Angeles picked up steam after Maguire Properties Inc. said it would consider a sale of the company. Its stock jumped nearly 12 percent Wednesday on the news.

At the center of the tussle is the firm’s flamboyant founder, Robert F. Maguire, who has a reputation as a real estate visionary and autocratic leader. In recent months he has come under pressure from activist stockholders to relinquish at least some control of the company that he leads as chairman and chief executive because its stock was languishing.

That excellent setup by reporter Roger Vincent gets us into the meat of the story with a few tips to guide us through. We learn in the lead that this development is part of an ongoing fight, letting us know we’re entering the theater during Act Three. We get the two protagonists: Mr. Maguire on one side and a group of shareholders on the other. We get both the obvious reason for the “tussle” (sub-par performance by the stock) and a hint at another source of discord (a “flamboyant” and “autocratic leader”).

Vincent drops in useful details throughout the remaining seventeen paragraphs and includes a graphic depicting the poor performance of Maguire shares compared to its peer REITs.

Midway through, the analysis begins:

The announcement raised eyebrows. It ‘strikes us as a palace coup’ and may be the start of a company takeover, said analyst Michael Knott of Green Street Advisors. ‘This is definitely positive news,’ he said, calling it ‘an investor-friendly development from a board that has earned the reputation for letting Rob do what he wants.’

The Wall Street Journal’s take on the situation was good as well, but lacked the deftness of the L.A. Times piece. The WSJ gave us the story but not quite as clearly. Consider the first two graphs of its story:

Maguire Properties Inc., a Los Angeles real-estate investment trust that is fighting hedge funds for control of the company, indicated it is up for sale for the second time in 13 months.

The company announced it is forming a special committee to explore strategic alternatives. The committee will be made of independent directors and won’t include Maguire Properties’ chief executive and founder, Robert Maguire. JMB Capital Partners Master Fund LP, a hedge fund that raised its stake in Maguire Properties last week, has urged Maguire Properties to form such a committee and has demanded that Mr. Maguire not sit on it.

As with the Times, the Journal lets us know we’re late in an unfolding story, but doesn’t quite tell us what that story is. We get some nice details, but the piece doesn’t present the larger story as clearly. Maguire is essential to the story, but we’re introduced to him only incidentally, when we’re told he won’t be on the committee. This is a fine piece for someone who is familiar with the controversy at Maguire, but anyone who’s not finds holes here that were better filled in the Times story.

The Journal made up for it several days later with a colorful Marketplace-front profile of Maguire himself, and the power struggle at the company—and got a scoop, too (non-subscriber link).

To fight back, Mr. Maguire revealed to The Wall Street Journal, he has lined up investment firm Colony Capital and the Qatar Investment Authority—the Persian Gulf emirate’s main investment vehicle—as partners for a bid to buy the company and take it private.

This makes the earlier L.A. Times piece look even smarter. It quoted an analyst saying, “a bid from Maguire himself is a wild card.” Still, while the Journal article paints a good picture of Maguire and cogently surveys the history of the dispute, it doesn’t elaborate much on the big news. The L.A. Times followed up the next day with a more forward-looking analysis.

In fact, the December 17 piece was not the first time the Journal had squeezed a scoop out of Maguire. A November 21 article (non-subscriber link) contained his first public response to a letter from a major shareholder that criticized Maguire’s leadership. The article, headlined “Maguire Responds to Critics,” is thorough and presents both sides—although, as with the December 17 piece, it gives Maguire the last word. Also, note that while the Journal covered Maguire’s response, the L.A. Times chose to cover the critical letter itself in a November 14 article headlined “Investor assails Maguire founder.” (Maguire apparently chose not to talk to the L.A. Times, instead giving his response to the Journal a week later.)

On these stories, the L.A. Times didn’t have the inside line to Maguire, but it did have the best combination of back story and new information, all in the necessary context. It focused on Maguire, but not overly so, and kept a critical perspective.

We’re not picking on the Journal here—it did some fine work. But the business press could learn a lot about telling stories from the L.A. Times on this one.

Elinore Longobardi is a Fellow and staff writer of The Audit, the business-press section of Columbia Journalism Review.