I’ll be interested to see what fallout there is from last night’s Media Watch story on Alan Kohler. The topic for the week was the outsourcing of expert financial news and commentary on TV. In the case of commercial networks, it seems they have actually been paying getting paid by organisations like CommSec for their trading floor segments. Obviously the ABC isn’t being sponsored by any private company directly, but Media Watch argued that Kohler has a conflict of interest because his on-line ‘investment newsletter’ the Eureka Report has clients whom he may find himself reporting on in his ABC stories. The Eureka connection is not even disclosed on the news bulletin, an omission that Alan Sunderland, the Head of National Programs for ABC News, justifies thus:
The ABC has a specific arrangement in place NOT to verbally or visually promote or endorse the Eureka Report on its programs or websites.
But a disclosure is called for because
Carnegie, Wylie and Company – which partly bankrolls his Eureka Report is a player in some major deals, involving the likes of BHP, Coles and Patrick.
The company was also closely involved in the recent private equity takeover attempt of QANTAS.
Now during that period, Alan Kohler commented that the QANTAS share price might dive if the private equity takeover failed.
Media Watch is not perfect. I agree with Robert Merkel that Monica Attard has been a bit naive regarding the internet, especially in expecting the Australian Communication and Media Authority to police it.
But I think the program has been unfairly criticised as trivial, for example in this recent swipe from Mark Bahnisch:
Id have thought this was core business for Media Watch, instead of spelling mistakes or doctored photos from the Wangaratta Times.
(Mark has a history of specious criticism of Media Watch , which he once promised to elaborate on !)
The role Media Watch performs is to keep us awake to the pervasive biases and misrepresentations in the mass media. And the program goes further than that, by uncovering the systematic causes of these problems, and helping us media consumers better understand the processes by which media organisations mediate the world for our benefit. They do this by pursuing a number of ongoing themes, all of which it’s easy to find recent examples of.
First there is the blurring of information and promotion, with advertisement posing as news, and reporters and commentators failing to disclose conflicts of interest. This includes presenters compromised by deals with commercial sponsors (not just Jones and Laws), and lobbyists masquerading as commentators.
Then there’s behaviour that tends to actually reduce rather than increase the information we get, like chequebook journalism, and the steady centralisation of programming for commercial reasons.
Of course there’s all manner of misdemeanours by journalists themselves, no doubt due in part to the pressure they are under to churn out ever more abundant and sensational stuff. The most spectacular is deliberate deceit, including plagiarism, false claims to exclusivity, faking camera footage, and so on. The same motive presumably prompts managers to hire ratbag opinion columnists with axes to grind in place of specialist knowledge.
But a more mundane manifestation is plain low standards, for example not checking stories, even self-evidently dubious ones. Whether it’s the pressure to produce or just plain laziness, this attitude is exploited by the PR outfits and lobbies, causing an erosion of independence even where there is no conscious dishonesty. Journalists take statements in press releases at face value, and when they cover wars we find them embedded and well out of objectivity’s reach.
Finally, there is socially irresponsible broadcasting, which comes in many forms: racism, demonising of vulnerable groups, trial by media, and possibly illegal breaches of privacy, exposure of children, and incitement of harrassment.
In the face of all these disappointments, the wretched ineffectuality of the regulating body is another regular theme.
It’s critical to Media Watch’s credibility that it goes after ABC programs as well, including sacred cows like Australian Story, and brings to light instances of conflict of interest, political interference, blurring of the lines between news and promotion, and general sloppiness .
Alan Kohler is a pretty good financial journalist as far as I can tell (although his forays into pseudo economic theorising sometimes make me cringe). His cheerful and enthusiastic demeanour brightens up a potentially dull interlude between world politics and sport, so I wouldn’t want him to disappear. But Monica Attard’s demand that he disclose his affiliations is more than reasonable.
Why would anyone pay for those morons from the banks etc to sell their own book via your network – methinks it should be the other way around !
Your intuition is right: that’s what I meant. Fixed now.
I’ll get there one day, James, though I obviously don’t think I’m being specious! Perhaps when I have a staff of researchers like Media Watch ;)
I agree the show on Kohler was good value. It is what we should see more of from them.
Kohler is a business person, in business for himself. He’s also an economist and commentator on issues of economic and commercial interest. His comment, for example, on the QANTAS float wasn’t any more contentious than similar comments by other financial advisers and Kohler wasn’t giving advice. Just as well, because his punt was dead wrong. He was passing comment. Even more to the point, one might say he was entertaining as well.
Surely this post and Media Watch’s article isn’t attempting to claim that persons like Kohler, who just happen to be accredited financial advisers as well as economic commentators, should be issuing verbal disclosure notices before passing comment in a three minute grab on nightly news?
I expect Kohler would love to disclose his interest in the Eureka Report. An ad for Eureka Report every night on the tele.
Niall, I think that the ABC should adhere to its policy. Also, as the program points out, he disclosed his interests when he wrote for the Fairfax papers. Do you think that was unnecessary, and, if not, what’s the difference?
I enjoy both Media Watch and Kohler informative. Having said that MW is sometimes nitpicking.
I trust because of the nitpicking Kohler is not dropped. If I could afford to subscribe to Kohler’s site but appreciate very much the comment he freely posts.
Being wrong occasionally is human, I’ve been known to be that way myself.
Being wrong about the Qantas price was one of mine too.
Being wrong is no crime and to claim conspiracy is over the top.
fluff
I enjoy both Media Watch and Kohler informative. Having said that MW is sometimes nitpicking.
I trust because of the nitpicking Kohler is not dropped. If I could afford to subscribe to Kohler’s site I would but appreciate very much the comment he freely posts.
Being wrong occasionally is human, I’ve been known to be that way myself.
Being wrong about the Qantas price was one of mine too.
Being wrong is no crime and to claim conspiracy is over the top.
fluff
Great post, James. Mind you, I’d take Kohler with or without disclosure, because he’s both excellent and enthusiastic.
Media watch is exciting because it rouses emotion, anger and self-righteous astonishment at the stuff uncovered.
A great pity that its targets are so very predictable; its regular attacks on the IPA, Bolt and Blair and the ripostes from them are one of the best spectator sports going. Did you see Blair’s discovery that the ‘hate comments’ were actually supplied by member of a hate site manipulating Media Watch’s prejudices?
Niall’s right; ABC news watchers don’t want to time spend hearing about theoretical conflicts of interest instead of financial news, and the ABC is right that ‘disclosure’ in this case would in effect be advertising.
So Andrew, disclosure requirements should be arbitrary, depending on whether we like the analyst or not?
Since advertising the name of his report could be easily avoided it is hardly a barrier to some form of disclosure when there is such a clear conflict of interest.
A conflict of interest does not necessarily mean the analyst / adviser / broker is acting in an unethical manner, just that the conflict needs to be managed with disclosure a pretty basic requirement.
I understand some of the people who visit and comment on these sites might not get it, but you surprise me.
sdfc – No, disclosure should not be arbitrary, but it does require judgment as to whether or not it is a real or a theoretical problem and whether disclosure is required. In both positions, Kohler is selling his expertise and independence – his primary incentive is not, as Media Watch assumes, to do the bidding of Carnegie Wylie but to maintain his own professional reputation. There is no evidence that he has done anything wrong here. He made an incorrect call about the Qantas price, but so did lots of people based on the not unreasonable assumption that if a major bidder departs the market the price is likely to drop.
Kohler has no direct power through what he says – he is not like a Minister making decisions which can directly affect people. Further, we need to look at the kind of people who might be influenced by ‘tainted’ news. I would be surprised if many investors made their decisions based solely on what they saw on the ABC news. If they are that amateurish, a disclosure is not going to save them.
Also, actual investors are likely to know already about the Eureka Report connection – I only skim read the business pages of the newspapers occasionally, but I was aware of it.
In this case, we have to weigh up the possible negative effects of disclosure as well. Mentioning the Eureka Report would be advertising. Though they do shamelessly promote the efforts of ABC mates through ABC shop advertising, it would be better to keep this out of the news.
Also, how often does it need to be mentioned? A 30 minute news bulletin is far more constrained than a newspaper in what it can cover already, so why replace real news with stuff like this?
James, I can’t help but wonder just what interests Kerry O’Brien, or Michael Brissenden, or Tony Jones might have on the side which, according to your presumption, they ought to be disclosing. Oughtn’t Paul Clitheroe be making appropriate disclosures regarding his allegiances with Channel Nine? Or Noel Whittaker in his columns for Fairfax Press?
The whole issue is a complete and utter nonsense bordering on some perverse form of conspiracy theory.
Andrew
Is this real/theoretical dichotomy a standard one, or is your invention? The relevant question, as far as my naive understanding goes, is whether there is a potential conflict. In other words, might situations plausibly arise where Kohler has to make a hard choice between telling ABC viewers the full story and keeping Carnegie Wylie happy?
I would have thought that the relevant point for Kohler’s defenders to make is that he isn’t actually a business owner or manager. But your argument seems to let them off the hook as well. I’d be interested to know: would you be happy if Bob Mansfield took up a part time job reporting business developments on the ABC? After all, he couldn’t force people to follow his advice.
The practical matters of how to make a disclaimer in a television bulletin, and how to avoid turning them into ads for Eureka, are side issues. Use your imagination.
Niall
Whittaker does have disclosures. Do you know something about Kerry O’Brien et al.?
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James – It’s like Stephen Mayne’s regular Crikey disclosures that he owns 5 or some other low number of shares in a company he is writing a story about. It’s almost a satire on conflict of interest disclosures because it completely confuses what Mayne’s principal interest is – he is a muckraking journalist who uses the shares to get into company AGMs, not an investor trying to make money.
I realise that, for the sake of simplicity, there is a case for applying rules that are generally sound even on occasions when they are unnecessary. But I am not inclined to criticise those who breach them when a careful examination of the issue suggests that (as in this case) the real interests lie elsewhere and there are other considerations counting against it, such as the reality that it would in effect be advertising.
Bob Mansfield is a different case – I don’t think he would make a good journalist. But since anyone who has ever looked at the business news knows his history, disclosure would be theoretically desirable but redundant for all practical purposes. It’s like a ‘disclosure’ appearing on Paul Keating’s articles suggesting that just maybe he is not an objective observer of politics.
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Andrew
When the theoretical problem becomes real it is too late, this is why we have disclosure requirements in the first place.
This is not about Alan Kohlers personal integrity or his general observations on the financial markets but rather his comments regarding the likely path of the QANTAS share price when he had a clear conflict of interest. Its not rocket science.
I agree with Andrew here and would be quite annoyed if in addition to the flexibility the ABC has given Kohler they also allowed him to advertise his own business – each time he appears. I wish I could get a gig like that.
Of course some already have. http://www.moneymanagers.com.au/your_money_guide.asp
All right, since you and Andrew have both declined my invitation to use your imaginations, here’s a suggestion: What about a message that appears on the screen for ten seconds, saying, ‘Disclaimer: Alan Kohler operates an outside consultancy. Businesses he reports on in this segment may include his own clients’.
Kohler’s clients are people who pay $30 a month for his online investment newsletter – even if he was a crook, you couldn’t buy him for $30 a month (actually his financial benefit would be much less, after costs and shared profits).
Carnegie Wylie isn’t a client, it is an investor. It had Qantas as a client. We are already getting to a tenuous connection here, to a deal in which Kohler has no direct interest.
As nobody has provided any evidence that Kohler is anything other than a good business journalist who tells it as he sees it I don’t think your disclaimer is necessary.
I’m in agreement with Andrew on this score. Unless Alan Kohler is seen to be overtly pushing his own barrow, disclosure notices aren’t necessary. Something of the Citigroup -v- ASIC decision in this argument, I dare say.