27 April 2010

Paying Reporters to "Move the Markets?"

Sometimes I read something and I just do a double-take.

So I read this week's New York Times piece by Stephanie Clifford about how BusinessWeek is being absorbed into Bloomberg Media, and it seemed to be this interesting story of this nimble ninja of a media company absorbing one of business journalism's last dinosaurs, but I sort of looked past the angle of the uneasy meshing of two corporate cultures.  If I want to learn about those issues in the business news industry I usually check out Chris Roush at UNC, and he had that angle covered.  What really caught my eye was this:
At Bloomberg News, where writers’ salaries are tied, among other factors, to how many “market-moving” articles they have produced, BusinessWeek is fitting in like — well, like an 80-year-old print magazine in a company that is all about terminals. 
Emphasis mine.  The story actually reiterated the concept, and credited the idea to editor Matthew Winkler - a.k.a. the guy who runs the place:
Mr. Winkler said magazine articles would be evaluated on the same metrics as articles for the terminal: did they move markets
 Again, emphasis mine.

So am I to understand that reporters at Bloomberg are actually "incentivized" to have an impact on the stock prices of the companies they cover?

Does it matter which way the markets move?  

This doesn't sound like a bonus for good reporting, this sounds like a bounty for corporate scalps.

I asked a good friend - an editor who just happens to have a Peabody Award to his credit - what he thought of this.  I won't quote him because I thought of writing this post after I emailed him about it - but let's just say he wasn't particularly pleased with this compensation structure.

And if you're not upset about this, if you think this is just a tried-and-true practice from a reputable media source, just replace the words "Bloomberg Media" with "Huffington Post" or "Pajamas Media" and see how you feel about stories designed to move corporate stock prices.

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