Wall Street vs. Bloomberg News

Bloomberg Terminal
(photo: wikipedia.com)

Recently, Bloomberg News acknowledged that some of its reporters used sensitive and presumably restricted data from the eponymous terminals in their journalistic pursuits. Bloomberg terminals, if you're unfamiliar with them, provide essential financial data and are vitually de rigueur on Wall Street. The price of entry into the world of Bloomberg terminals is $20,000 per year. No exceptions, including the Street's giants, as today's New York Times article on the Bloomberg News-Wall Street snafu observed.

The Times' story, released on a slow news Saturday, is a curious one. A key player, if the article is to be taken at face value, is a Goldman Sachs PR exec and managing director named Jake Siewert. His resume includes a stint as an aide to former Treasury secretary Tim Geithner during the Obama administration. He was also White House press secretary during the Clinton Administration. Siewert called his JP Morgan counterpart and they began comparing notes about Bloomberg News leads and activities that aroused suspicions regarding their origin.

Jake Siewert
(photo: The New York Post)

An upset Goldman began to, as the phrase goes, "look into the matter." Keep in mind this is the same firm that employed Chelsea Clinton's husband. Let's just say Goldman, unflatteringly known as "the squid," has many friends in the public, private, and shadow sectors. JP Morgan, meanwhile, was in the middle of Jamie Diamon's very visible fight to retain both his chairmanship and CEO status at the firm. Keeping the media in line, especially a snoopy Bloomberg News, would be in JP Morgan's interest. There's nothing quite like a scandal over news coverage techniques to temporarily diminish a news organization's sharper edges. All Diamon needed was a little time and a little less media curiosity.

According to the Times piece, Siewert or others associated with Goldman Sachs contacted former Bloomberg News reporters for confirmation regarding surreptitious news gathering activity on the Bloomberg terminals. Intriguingly, the anonymous reporters cited in the story worked for Bloomberg News competitor The Wall Street Journal. Now, you'll get extra credit if you can guess which media platform broke the Bloomberg News-Wall Street story. If you said The New York Post, you would be correct. If you're keeping score at home, Rupert Murdoch owns both the Journal and the Post.

Mark DeCambre
(photo: twitter.com)

Among the coincidences in this tale is Post reporter Mark DeCambre's role in the affair. He filed a piece on Goldman's hiring of Siewert in November, 2012, which highlighted his potential fast track path to managing partner (roughly equivalent to landing a place in Wall Street's Olympus). According to today's Times article, he also broke the story about the Bloomberg News-Goldman Sachs flap.

Bloomberg News eventually issued something of a half-hearted mea culpa for its journalistic faux pas. Whether Bloomberg has offered a deal on yearly rates for its terminals was not noted.

Financial Times Deutschland -- RIP

The American media paid attention today to Australian-American immigrant Rupert Murdoch's reshuffling of News Corporation and the announced closing of his iPad news publication. In Europe, a media event quietly took place that spoke to the challenged economics of the print media. Gunnar + Jahr, part of Bertelsmann, the German publishing Goliath, is shutting down the Financial Times Deutschland (FTD). The story, as reported in the Parisian daily Le Monde, noted that 300 people will lose their jobs and 100,000 subscribers will have to find new ways to read reliably reported information.

Meanwhile, Bertelsmann's planned shotgun wedding of its scion Random House with book publisher Penguin (owned by Pearson, which publishes the UK-based Financial Times) continues on schedule.

PS. The Financial Times sold its fifty percent share of FTD in 2008.

Phone Hacking Scandal Spurs News Corp Shareholders Lawsuit

A story in today's online edition of the UK newspaper The Guardian reported that certain News Corporation shareholders intend to file a lawsuit against the firm's board of directors "for failing to stop the phone hacking scandal."

Elizabeth Murdoch, whose TV production venture
is at the heart of the Delaware litigation.
(photo from paidcontent.org)

The plaintiffs, including certain labor union organizations, allege that the Murdoch family put the clan's interests ahead of shareholders. The Delaware lawsuit, the Guardian story noted, began in 2011; its original object was to halt News Corp.'s proposed acquisition of Rupert Murdoch's daughter's television production venture. The UK phone hacking scandal developed into a far juicier target for the left-wing opposition, even though its prospects for success appear to be remote.

What's interesting is that the story did not appear, at least with any reasonable prominence, in any major American media outlet today.

Attorney with Links to George H.W. Bush Files Complaint to Remove Anti-Fox News Media Matters' Tax-Exempt Status

Media Matters for America, a liberal non-profit organization which has virulently criticized Fox News and the Murdoch media empire, has become a target of right-wing legal action. In a recent complaint filed with the IRS, C. Boyden Gray, former President George H.W. Bush's White House counsel, requested the agency revoke Media Matters' tax-exempt status. His reasoning, according to an article by award-winning Fox Business News reporter Elizabeth MacDonald, was that Media Matters "'has executed a partisan strategy,' in violation of U.S. tax law as it exists 'no longer to educate the public but, rather, to declare 'war on FOX (sic),' Gray says, quoting from an interview its founder David Brock (photo), gave to the website Politico."

The story also reveals evidence Gray cited as proof of Media Matters' intent. His IRS complaint, MacDonald's piece noted, asserted that the nonprofit attempted "to disrupt News Corp.'s purchase of BSkyB, a British satellite broadcaster, and its efforts "to turn regulators in the U.S., U.K., and elsewhere against the network."

Gray's concern to mighty Media Matters kicking sand in the Murdoch empire's collective face didn't stop with BSkyB. "Gray writes that aside from Media Matters' 'unsupportable attempt to tie FOX News to the Republican Party, the fact that Media Matters equates FOX News' with the GOP shows the nonprofit's 'own partisan intent.'"

Gray's story, part of a much longer three-part article by MacDonald, appeared on Fox News' website this morning.

The former White House counsel's "evidence" certainly made the rationale for attack clear enough. Big, bad Media Matters tried to block the BSkyB deal. The Murdoch clan is clearly upset their carefully staged plan to seize total control of the UK's single most valuable media asset was thwarted. Their revenge and counterattack, which is probably in its earliest stages, has taken this primitive form. Meanwhile, the notion of associating Fox and the Murdoch media behemoth with the GOP and conservative causes is just plain common sense. When I initially read the piece, I thought Gray was pursuing this line of reasoning to get a bar room laugh. Alas, George Herbert Walker Bush's former legal eagle was quite serious about it.

One irritant Gray wants to rub out is Brock's venture. The Bush-41 coterie has deeply disliked Brock, a Republican and Bush-era political apostate who has since become a vocal critic of right-wing tactics and objectives. Brock was mixed up with the Anita Hill hearings and performed some dirty work on behalf of Bush and then-Supreme Court nominee Clarence Thomas in that episode.

Gray has vehemently denied any link to Fox, Murdoch, or anything or anyone but himself. He just had time on his hands, and a bone to pick with Media Matters. Maybe Gray just doesn't see the nonprofit as "fair and balanced."

Perhaps there's another reason. Since the UK phone jacking scandal exploded, it has seemed inevitable that the Murdoch empire would strike back against its accusers. August gave News Corp. and the Murdoch family time to catch its collective breath, formulate a counterattacking strategy, call in favors, and use its "leverage." (Some suspect that News Corp.'s attempts at "persuasion" are really nothing more than thinly disguised blackmail threats.) The dreadful debt debacle and shameful downgrade of the United States' credit rating provide further cover for News Corp. The firm, and the Murdoch family, are not the current headline, at least in the United States. The UK, where everyday people felt violated by News Corp.'s reporters' routine phone tapping, is another matter. The disposition of Gray's legal complaint remains to be seen. However, one can assume the Murdochs and News Corp. will soon be on the march, defending Fox News against "scurrilous" attacks from liberal think tanks virtually no one knows or pays attention to.

Former "News of the World" Staffers Discuss Their Experiences

Tabloid journalism, by its very nature, ventures into the profession's gray areas and dark corners. If one works that trade, one learns very quickly what the beast is, its voracious appetite, and its unforgiving nature.

A window into this unseemly world has become available, thanks to the UK's collective revulsion over tactics employed by Rupert Murdoch-owned tabloids. Yahoo News provides a link to a Reuters story in which former News of the World staffers discussed their working environment. It tells the truth, unlike the specious, initial claim of Murdoch management that the phone hacking was done by a "rogue" journalist. The Reuters piece talks about editors' control of budgets, the mother's milk of the payoffs at the heart of blackmail journalism. The article also notes how stories are traded (i.e., hushed) in exchange for influence. The Reuters piece effectively counters the notion that senior management, such as Rebekah Brooks and Andy Coulson, had no idea of the extent of its publication's illegal activities.

However, those who feel Murdoch is principally responsible for tabloid excesses ought to consider publications such as Gawker ("Today's gossip is tomorrow's news"), magazines produced by editorial divas such as Tina Brown (a/k/a Lady Evans, CBE), or newspapers such as American Media, Inc.'s National Enquirer. They're in the same game. So is Vanity Fair. It just doesn't put photos of women with ample bosoms on page three. That valuable real estate is reserved for the high fashion industry.

Hustler's Larry Flynt Scores With Opinion Piece on Rupert Murdoch

The major league American media has, for the most part, cautiously approached the uproar engulfing Rupert Murdoch's dominions in the United Kingdom. In an event that speaks volumes about the media's ambivalence over l'affaire Murdoch, the Washington Post opened its Opinion page to none other than Larry Flynt, so that he could present his perspective on the conservative press baron's current crisis.

Using a rogue such as Flynt to do the liberals' dirty work was a cowardly masterstroke. Flynt, by definition and disposition can write whatever he wants. His disconnection from the media establishment (liberal or conservative) gives him a unique freedom to articulate certain uncomfortable realities about journalism. Let's just say one is very unlikely to hear Flynt's views on Meet the Press or Fox News Sunday.

Flynt's opening gambit was to assert both he and Murdoch valued a free press. "We understand," Flynt wrote, "that in this quest to protect this freedom (i.e., a free press), boundaries must be pushed." In short, Flynt has pointed to journalism's dark side as a consideration in any thoughtful person's contemplation of a truly free press. Of course, managing the dark side is a tricky business, and Flynt makes no bones about it.

"I test limits," Flynt noted, "by publishing controversial material and paying people who are willing to step forward and expose political hypocrisy." Murdoch, in Flynt's opinion, went well beyond encouraging the "willing" to speak out. The right-wing darling's minions, if recent allegations are true, routinely used illegal means to obtain damaging information about just about anyone. There were no boundaries to the Murdoch media's relentless search for dirt.

Before the NPR/PBS crowd smugly congratulates itself on being classier (pun intended) than Rupert's tabloid readers, The New York Times properly noted in a story on the Murdoch situation that illegal invasion of privacy was a given in nearly all British journalism, including the "better" papers. The criminality and corruption inherent in blackmail-style journalism wasn't unique to Rebekah Brooks by any means.

Some who believe in journalism's high road are repelled at the notion of the media paying anyone for a story. However, we've become numb to the repeated tales of television programs offering large sums so that morons can relate lurid tales to jaded audiences. Sometimes, "respected" voices demand a fee for "speaking" to the media in venues such as interviews. Payment isn't always in money; favors are often far more valuable currency.

Interestingly, Flynt makes a cogent point about the degradation of the notion of privacy in the Internet era. "On a daily basis, and in ways that the general public does not even recognize," Flynt wrote, "our right to privacy is disappearing rapidly. Our political leaders allow companies such as Google and Facebook to continually infringe on this right. Both of these companies serve as data mines, selling information about their users."

And Google wields power just as ruthlessly as Rupert Murdoch does. An AP article appearing in today's San Jose Mercury News notes allegations from Belgian newspapers complaining that Google has blocked them from appearing in the search engine's results. At issue is a case involving copyright infringement. Other European media outlets have taken Google to court over the same issue. Google spokespeople have denied the allegations, citing court rulings. Many watching the case view Google's denials as hollow.

The Belgian media suit brings into focus another uncomfortable media truth: Google's power is truly alarming. Foreign governments, especially the People's Republic of China, profoundly mistrust Google and view it as an unwelcome arm of American foreign policy. However, the American media is largely silent on the notion that information search and its related data gold mine has nearly become a monopoly. And there is no reason why Google's stated goal of "doing good" is a priori preferable to Rupert Murdoch's conservative political beliefs. Like it or not, both entities like power, and especially like concentrated power.

Finally, the Hustler boss noted why the crisis provoked by the Murdoch empire's uncontrolled disruption of privacy is a big deal for ordinary citizens, not just for pissed off celebrities or embarrassed politicians. The actions of the Murdoch press, almost certainly sanctioned by Rupert himself, "has placed all of us who enjoy freedom of the press at grave risk. Only when our readership trusts us to provide material acquired honestly can a free press continue to be a driving force in preserving our democracy."

The Murdoch affair, with its sinister, STASI-like violation of individual privacy, has illuminated journalism's dark side. It took a marginalized figure such as Larry Flynt to state the issues plainly, and show their connection to the disturbing rise of data monopolists. Do you think Flynt will invite Murdoch to write the Australian-American press magnate's version of the UK phone hacking story?

The image shows a poster from the movie The People vs. Larry Flynt.

Michael Wolff Reveals Rupert Murdoch Family's Crisis

A rarely discussed subject is the private life of Rupert Murdoch and his family. The highly secretive senior leadership of the People's Republic of China is better known than the habits and pleasures of the Murdoch clan. For a media magnate whose power is partly based on a relentless invasion and manipulation of others' privacy, the desire to remain out of the public eye is understandable.

That's why the recent Ad Week article by Michael Wolff on the Murdoch family crisis is such compelling reading. The article, among other issues, suggests why Rebekah Brooks has such Rasputin-like grip on the Murdochs. Wolff (photo), a knowledgeable New York-based media writer, has written an excellent piece. It's buried in a trade magazine probably because the subject is just too hot for major media outlets to handle.

Frankly, the competition to the Murdoch empire should not be beating its chest too strongly over its coverage of the UK phone hacking scandal. Most American media, with the exception of The New York Times, has largely downplayed coverage of the appalling scale of Murdoch's blackmail operation. This is hardly a surprise. Historically, most American media outlets have conducted character assassination pieces and distorted journalism similar to the Murdoch style. David Halberstam's The Powers That Be, an excellent history of selected American media from post World War II to Watergate, details some of the more egregious media sins. There are plenty of shameful moments to go around; Fox News is hardly unique in this regard.

What's clear for the time being is that the Murdoch media empire is on the defensive. We'll see how long that lasts, before the empire strikes back.

"Time Out" Finds Time to Sell Half Its Business; IPad-Only Publications Ready for December Launch

Time Out, the firm that churns out the Time Out (name your city) guides, just sold a 50% stake in its company to Oakley Capital, a London-based private equity group. The Financial Times, which reported the story in its Thanksgiving Day edition, noted that the publication intends to use the funding toward its shift to become "'a mini search engine or portal' for cultural listings. The brief, stealthily located sidebar on Time Out founder Tony Elliott, is also worth noting.

Meanwhile, Sir Richard Branson intends to unveil an IPad-only digital magazine sometime next week. This would occur around the same time as Rupert Murdoch's IPad-only newspaper is launched. Neither publication will be free. Today's FT has the story.

The photograph shows Branson in 2006 during his involvement in Dubai real estate development.

They Call It "Media Monday," and Tuesday's Just as Bad

The pun on the opening lyric to Stormy Monday brings us to some interesting events in the media.

1. Google and Verizon publicly launched their plan to amend "net neutrality". The San Jose Mercury News, which reflects Silicon Valley thinking, offers a little analysis.

2. A very curious story in the Financial Times about Rupert Murdoch waving the white flag in China. Guess this one didn't make Fox Business. Yes, I checked.

3. Gambling in the Casino Department: The Washington Post Co. got egg on its face when its Kaplan education arm was cited for misleading prospective and active students, resulting in Kaplan raking in oodles of money. Keep in mind WaPo's media component is a money loser; Kaplan is a huge money maker.

4. Cablevision, owner of Madison Square Garden and its resident sports franchises, just publicly embraced Isaiah Thomas and made him a high-level employee again. It's incredible, although in keeping with ownership's lack of morals. Thomas had been tarred in a sexual harassment suit, the proceedings for which unveiled the Garden's Borgia-like corruption.

5. A snippet of Ric Burns' "documentary" on Goldman Sachs has been leaked, via Minyanville. For those unfamiliar with the case, Goldman commissioned the work and has complete editorial control over it. This is on top of Goldman's first quarter results, in which its trading desk did not lose money on any day in the quarter.