Wednesday, February 25, 2009

Two faces of "breaking" news

Coverage of Northern Trust's recent sponsorship of the PGA golf tournament at Riviera Country Club in Los Angeles - and the allegation it used federal bailout money to pay for three high-profile concerts and other lavish treats it bestowed its customers during the tournament - ran the full circuit.

The coverage ranged from the sensational to a non-story. It reached the halls of Congress.

Perhaps more importantly, the Northern Trust "story" gives us public relations professionals two important lessons:

  1. It is a great example of how news is morphing and what may be contributing to the decline of newspapers.
  2. It offers another great lesson in how we need to be counseling our clients during this economy.
First, let's see how this "story" originated.

The "story" broke on gossip Web site, an organization that survives on a team of young men with handheld cameras accosting anyone they can in the streets at any hour and the occasional "scoop" that gives them a thin shred of credibility as a news-related organization. As a venture of AOL/Time Warner that had its beginnings rooted in the popularity of the Drudge Report, TMZ covers a town full of actors and others who occasionally act human. It is a magnet for anyone who has a lurid tale to tell. These "scoops" include disclosing the crazy excerpts of police statements from actor Mel Gibson's arrest for drunk driving or posting the arrest photos of drunk celebrities.

TMZ is a tabloid news organization that has an incredible benefit of being both a well-watched Web site and a TV show with ratings. And, it is good at promoting itself. Founder Harvey Levin has a legitimate news background and is a lawyer. He covered the OJ Simpson murder trial as a legal reporter for the Los Angeles CBS-TV affiliate. (When I was still a reporter, I was at many a news story with Harvey in the media audience. He's actually a very nice and courteous guy and incredibly smart). Harvey's even been interviewed by Larry King. But when he has a good story at TMZ, Harvey knows how to work it with the Los Angeles electronic news media. Since his TV show is picked up by Fox in Los Angeles, he gets a chance to promote it on the local morning news show. Since he has long-standing relationships with all the other TV and radio stations in town, he gets airtime.

When TMZ lit the match, the Northern Trust story erupted like a volcano Tuesday morning on Los Angeles media and spread like a California brush fire around the world.

Now comes the questions of whether TMZ is breaking news or gossip - and how editors at mainstream news media outlets are going to respond?

For years, mainstream news media have struggled with how to cover a story that broke in the National Enquirer and other supermarket print tabloids. Since at least the 1980s, there have been several articles, such as in the Columbia Journalism Review, reviewing the topic of "mainstream chasing mud."

In the old days (pre-TMZ), most news organizations took a wait-and-see approach to see if a tabloid-generated story gained traction. If the story had "wheels," they reluctantly began covering it. Remember former presidential candidate Gary Hart?

Today, it seems, mainstream news can't wait. Blame it on the Internet or blame it on mainstream news editors simply giving up. Take your pick.

TMZ probably would like to think it is a better tabloid. Yet, TMZ is simply an electronic version of a tabloid that has found a way to break through the old barriers. The TMZ dynamic is probably one of the best examples of what is perplexing mainstream news media today. The phenomenon is worth a study in the ongoing and agonizing examination of why newspapers are dying and why such formerly great papers like the Los Angeles Times give so much attention to entertainment news. (I'll save for later the debate of "what readers want vs. what readers deserve.")

So, the Northern Trust "story" broke Tuesday on TMZ, which posted photos and videos from the lavish parties and concerts.

Perhaps the headlines combined with the "exclusive" videos were too much to resist? Or, in this era of bank bailouts and public/politician sentiment that corporations and its executives need to be more modest and reserved in their spending habits, did the stars align just right for this story to "have wheels?" (For some insights into how public relations professionals are counseling their clients on being modest, check out the panel from the January PRSA/Los Angeles program).

How did the mainstream news media react to the tabloid-generated story?

The Wall Street Journal has basically ignored it, opting to only editorialize about about it today's edition. The Los Angeles Times' Michael Hiltzik (a Pulitzer Prize winner) offered perhaps the best take on it, but the Times also covered it in gossip-like fashion in its entertainment section, the Envelope blog "the dishrag."

The rest of the mainstream media were essentially "forced" to cover it because Sen. John Kerry made it his story yesterday. The story is now global and forced Northern Trust to issue several statements.

So, aside from a study in how tabloid journalism is driving mainstream news coverage, what else is being learned from the Northern Trust experience? (Aside from the fact that I wish I was a wealthy client of Northern Trust so I could see Sheryl Crow in concert?)

Hiltzik's column should be widely read by all public relations professionals who have business clients. The era of modesty and being contrite is upon us. If prior stories (Wells Fargo going to Las Vegas, automakers taking corporate jets to DC, etc.) about how banks and corporations should not act in today's near-depression economy, if these prior stories didn't give us clues about how we should be prepared and how we need to counsel our clients, then the Northern Trust one definitely gave us the clear roadmap.

In Northern Trust's defense: Having had financial institutions as clients, I know that "taking care" of wealthy bank customers is standard operating procedure. It's a way of maintaining the relationship with individuals who pay high fees for high-touch service. Competition for these clients is fierce. And since most of these clients are the country club set, a PGA event is a natural stage for these sorts of parties. And if you are Northern Trust, which is not in trouble and really doesn't need TARP funds, you probably should keep doing the things that attract paying clients. Unfortunately, lost in this recent furor was the fact that these parties and events around the golf tournament also raised a lot of money for charities. (Note: charitable contributions are next up for those who have "questionable spending" in their crosshairs).

However, the microscope is there, whether it's TMZ or bloggers or a senator and a congressman from Massachusetts. It doesn't matter whether your company receives TARP or other federal help. All companies need to be prepared for public examinations of what could be perceived as lavish spending.

It's simple: Since the majority of U.S. consumers are cutting back, they reason that CEOs should do the same. Remember, the roots of today's contempt were laid just a few years ago with Enron, Adelphia, Tyco, Global Crossing, Worldcom, etc. It's been bubbling.

Now, public relations professionals have a tremendous challenge to break through the current mental state of this country to convey stories of legitimate spending. Wells Fargo's training conference in Las Vegas was to make better bankers. Seriously, don't you want a bank to be better trained these days? But it was in "Las Vegas." Goldman Sachs recently moved a conference from Las Vegas to San Francisco "because of the new landscape."

So, why does Las Vegas have to suffer? It's hurting already and now you want to pull conventions away simply because of an "image?" Forget the fact that Las Vegas is a cheap convention site these days.

As you can tell, "reason" is not even on the table. Not when TMZ continues to be viewed as a legitimate news organization and the "filter" of well-trained mainstream news media editors is nowhere to be found.

Stay tuned.

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