The State of The American Newspaper
Follow the Money   

Taking a cue from their readers, newspapers have enthusiastically climbed aboard the business bandwagon.

The year was 1925, Calvin Coolidge was sitting "tranquilly," as he liked to say, in the White House, and Americans basked in the mellow glow of peace and prosperity. On January 17 the president loosened that famously buttoned lip just long enough to pronounce one of the few terse Coolidgisms that would survive him. "The chief business of the American people," he asserted in a Washington speech, "is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world."

Much less remembered is that Coolidge delivered this nugget to the American Society of Newspaper Editors, then but a 3-year-old toddler.

What, if anything, the editors in the audience that day responded went unreported. But evidently they missed Silent Cal's point. For in those contented times, with Black Tuesday and the Great Depression still four years down the road, if Americans were "profoundly concerned" with business you certainly couldn't tell it from their newspapers. Indeed, scant and naïve business coverage was later cited as one reason so many Roaring Twenties investors were in over their heads. For the mainstream press it would be another half a century before business news was hardly worthy of the name.

Whatever the case was in 1925, there is no doubt that in 1999 the business of America is business. We are transfixed by it, gripped by it, seeing our lives and culture changed forever by it. Cab drivers check their portfolios and grocery clerks want in on the latest dot-com IPO. And this time there is no question that America's editors are all over the phenomenon.

In recent years business news has been, far and away, the fastest-growing editorial segment in the nation's newspapers, if not in all media. At a time when many papers are reducing coverage of traditional mainstay areas, from statehouse news to international affairs, the buildup of business coverage has reached explosive proportions, sweeping the field from the metropolitan giants to the most introspective of hometown dailies.

Once almost the exclusive realm of the Wall Street Journal and its weekend cousin, Barron's, business news is now the arena where mainstream editors say they test their mettle against the competition. Business stories appear regularly and prominently on front pages and throughout the paper, having slipped the bonds of their own sections the same way business itself has infiltrated every nook of society. Today "business" could be the page one takeout (on a global monetary crisis) or a sports report ($800 million for the Washington Redskins!) or a lifestyle piece (is it gauche to compare stock options at a cocktail party?).

"Business coverage is leaping out of the old ghettoized system," says Washington Post columnist David Ignatius, whose reporting and commentary focus on business and the way it is transforming society. "Business is now a subject that's changing our lives so much that it shows up regularly in op-ed, and it's included more and more in the mix with policy."

Along the way business is transforming the cultures of newspapers themselves, something you see clearly if you travel the country and talk to editors and writers about the business movement, as I did over the past few months. You notice how the San Jose Mercury News, having consciously set out to make itself the "paper of record" for Silicon Valley, infuses the entire editorial product with high-tech. How down in Austin the American-Statesman wants to do the same for its burgeoning Texas "technopolis." How in Portland, home of Nike, the Oregonian is digging into sneakers and tracking the elusive french fry. And how two national giants, the New York Times and USA Today, are devoting an enormous amount of thought and resources to staking out respective corners of the crowded business field.

Changing right along with the newspapers is the reporter culture. Where the business desk once was Siberia, now some of the best and brightest young journalists--reporters who a generation ago would have their sights set on Washington or overseas assignments--are opting to build careers covering the sexy new world of commerce. Wall Street Journal Managing Editor Paul Steiger, who joined the paper in 1966 after studying economics at Yale, claims that today people with his background aren't qualified to be hired. "The young people we get now have awesome talent," he says. "They can write a page one story immediately, and they want to cover business."

The new business culture is no secret; you can't pass a corner newsstand or go online without having it slap you in the face. But the statistics nicely reinforce the impression. A content survey of 10 mainstream regional dailies, conducted by writer Carl Sessions Stepp and published in September's AJR, reveals that in the past generation the percentage of newshole devoted to business news has more than doubled, from 7 to 15 percent. When you consider that overall newshole also has doubled, it means that the space devoted to business stories has actually quadrupled in the past three decades. Meantime, the Associated Press reports that more newspapers are using more business agate (stock listings, mutual fund tables and related data) than ever. Stepp's data confirm that; he found that space devoted to business agate is up nearly fourfold. And at the nation's largest papers, which were not included in Stepp's survey but which have plowed tens of millions of dollars into additional staffing and space, the increases would be even more significant.

How obsessed are Americans with business? Ask CNBC, MSNBC or TheStreet.com. Talk to the folks at Bloomberg News. A decade ago the service didn't exist, but now it fields more than 1,100 full-time print and broadcast reporters in 78 bureaus around the world, and Bloomberg's terminals are ubiquitous in the nation's newsrooms.

Consider the stories we're writing, and the people we're writing about. Once upon a time, how many regular folks could identify the chief of the Federal Reserve or the Treasury secretary, much less discuss their monetary philosophies? But look at the ink spilled on Alan Greenspan and the recently retired Robert Rubin. And Bill Gates! Every other magazine cover seems to feature the Microsoft genius with his bad haircut. By now he's known as much for his incredible wealth as for how he spends it--on his 40,000-square-foot house, on his charitable contributions (most recently $1 billion for scholarships), on his tenuous golf game. Or take the Gates wannabes. The feature about the nouveau riche twentysomething exchanging his battered Hyundai for a Porsche when his company goes public has become such a newspaper staple that it's already a cliché.

Then again, who can blame us for being so interested? These entrepreneurs and their businesses change so quickly and create such surprises that anyone with a shred of curiosity must be enthralled. Firms start up out of nowhere, go public, go global, acquire other firms, spin off still others, get swallowed themselves--all at warp speed. In the process the fortunes made and lost simply defy mortal comprehension.

It's a dazzling display, and just maybe one of those instances where newspapers seem right in tune with their readers. And why not? In this business environment, editors understand they have the ultimate reader involvement. Today, virtually everyone out there (journalists among them) is a business "player"--if not a direct investor then by dint of their company pensions or 401Ks or employee stock ownership plans.

Or their mutual funds--especially mutual funds, the basic instrument through which even the least likely or least knowledgeable investor can move money into the stock market. At least 7,500 mutual funds exist today--or existed yesterday anyway, since the number grows constantly. Some 77 million Americans, which translates into 35 million households, are invested in these funds. In 1990, investors had pumped a mere $1 trillion into funds; today that number has exploded into an absolutely staggering $6 trillion. (This happens to be about $1 trillion more than the total national debt, principal plus interest.)

The funds have ridden a stock market whose trajectory in the '90s has looked like a bottle rocket. Toss in the Internet explosion and the mind-boggling volatility of tech stocks and the effect has been addicting. If business used to seem a dusty, cobwebbed affair, it's not anymore. Checking out the roller-coaster stocks in your personal portfolio packs all the thrills of a sudden-death playoff--with considerably more at stake. Compare the dash of an Intel with the staidness of a Kellogg's, a Compaq with a Ford; can there be any wonder why journalists who once fled business editors are now running after them? Says the Post's Ignatius, "Business news has gone from broccoli to dessert."

Of course, you can make a strong case that this fascination is really nothing new. "The economy has always been the big story in America, even if newspapers didn't treat it as such," contends the Oregonian's technology editor, Mike Francis. "I'll bet the typical newspaper reader has always cared a lot more about the economy--and his place in it --than about Cold War politics, or even the Vietnam or Korean conflicts. Most newspapers simply failed to recognize it."

Ironically, when they did recognize it, many newspapers were busy whittling away at staff and newshole in other areas, such as foreign news. But determined editors managed to get the money they needed for business expansion. No doubt this was due in part to the fact that business is one subject publishers and general managers are inherently interested in. But more likely this was a case where the business side recognized an opportunity--that the percolating U.S. economy could open up whole new revenue streams (in such areas as high-tech and mutual fund ads) if there was compelling editorial to surround it. Nor did it hurt that at a time when the industry was preaching the gospel of local news, editors pegged their business-expansion plans to covering what was happening close to home.

"By having a strong business section focused on local news, we can give our readers something that no one else can," explains Hank Klibanoff, business editor of the Philadelphia Inquirer. "I'm not competing with the Wall Street Journal on the big national story and I'm not competing with the New York Times on the big international story. I'm competing only with local press and, not to dismiss them, it's on something where I know I can win."

For all the gemutlichkeit, however, the fantastic growth in business journalism has surfaced a darker side.

Take the murky area of professional ethics. Not surprisingly, in a world where the go-go entrepreneurs and the reporters covering them both tend to be young and ambitious, opportunity and its attendant temptation are rearing their heads. The fiercely debated demotion this summer of a technology columnist at the Mercury News--she profited $9,000 when a Silicon Valley firm went public--is but a case in point (see Free Press, October). It used to be simple: Journalists couldn't invest in the companies they covered. But most papers are realizing they are in no way prepared for the grayer, more perplexing world of mushrooming startups and nonstop IPOs. What ethics policies exist tend to be outdated or so vague as to be useless on this subject. And if the reporters are forbidden from investing, is it a double standard when the media conglomerates they work for do invest in those same companies, as is often the case today?

Then there's pay. Good business reporters at a first-class paper earning, say, $60,000 or $80,000 find that people of their own age and educational background are earning considerably more at online portals. Front-page glamour fades quickly under such circumstances, and most editors are powerless to compete. Even if some can muster bonuses to snag an especially talented business reporter, the pay differential can create bad feelings and morale problems around the newsroom. The difficulty compounds when these reporters are also the hardest to find, skilled in the intricacies of technology, finance and economics, the most desirable fields in the electronic media.

Then there's the more subtle but very real problem of our business infatuation coloring all else. Already you can sense this in the reporting coming out of Washington. The capital press corps increasingly is populated by business journalists, and they are tackling more and more stories--from health care to welfare--that once were the purview of traditional news reporters. But if these stories are being reported through a business filter, is anyone asking the broader questions about government policy? Yes, a program might be in business' best interest, but what about the nation's? Is it fair? Is it wise?

Important concerns all, and newspapers coast to coast are grappling with them. Still, the problems are not so distressing as to wipe the smiles off the nation's financial editors. Ask them how's business, and you're apt to hear a lot of people sounding like Klibanoff, who tells me: "It's a great time."

This is a different world indeed from the one in which many veteran business journalists still in harness came of age. There's no need to go back to Coolidge to recapture it. At all too many papers--including some as late as a decade ago, when the collapse of the Soviet Union and the stampeding of the Wall Street bulls really accelerated the business news boom--the business desk was a kind of purgatory, the corner where editors exiled their problem children: the dead wood, the booze hounds, the old and weary. There, they rewrote--when bothering to do even that--press releases from the big firms in town. The rare interview with a company CEO, the reporter generously pre-lubed with drinks and eats, would inevitably come off as an exercise in fawning sycophancy, the hard questions left unanswered, if asked at all. Business news was, at best, little more than a weed-strewn patch in which corporate flackery waved in the dusty breeze. At worst, it misinformed and misled readers.

Alan Murray, Washington bureau chief of the Wall Street Journal, remembers this world. In 1977 he graduated from the University of North Carolina and went to work as a general assignment reporter for the Chattanooga Times. "In those days," he says, "business coverage at most metropolitan dailies was dismal." Chattanooga was no exception. A literature major at Chapel Hill, Murray had an "interest" in economics, a subject of less than passing fancy to most journalists at the time. "So, I offered to cover economics, and they made me business editor, at age 23--which shows you how bad things were."

A year later he enrolled at the London School of Economics. Then, with newly bolstered academic qualifications, he spent the next four years career-building, in Washington at Congressional Quarterly and in Tokyo at the Nihon Keizai Shimbun, often referred to as "Japan's Wall Street Journal." In 1983, he went to work on the Washington staff of the genuine article. He arrived just in time for the business boom--and as the Journal began to encounter serious competition on all sides.

The granddaddy of business coverage, the Journal still sets the standard for others to shoot at. But the improving marksmanship exhibited by so many "nonbusiness" papers has been extraordinary to watch. "We haven't changed drastically since '83. Rather, everyone else has changed to be more like us," Murray says. "As a result, where we used to have very little competition, we now have a lot."

So much, in fact, that the financial daily's circulation has remained flat for more than a decade. Journal numbers started slipping in the mid-'80s, from a high of 2 million to between 1.8 and 1.9 million, where they hover today, according to Peter Kann, chairman and chief executive of Dow Jones Co., the Journal's parent. "Our circulation began to dip..as major corporations began changing direction and cutting back on staff," Kann says.

Exacerbating the problem for the Journal was the fact that at the same time, the sea change in the mainstream media's approach to business was well under way. The public, having lived through the harrowing inflation of the mid-'70s, had become increasingly concerned, and sophisticated, about how the overall economy affected them personally. The term "pocketbook issues" joined the political and media vocabularies. For newspapers, a pivotal event was the appearance in 1980 of Business Monday at the Miami Herald and a counterpart tabloid product at the Washington Post, a highly readable and profitable format that other metros quickly copied.

So began an inexorable process. Brigades of business reporters began to develop. The once-anemic "business report" emerged from behind the sports pages and got its own daily section. Specialty beats--personal finance, technology, Pacific Rim--arose. And the action wasn't just at daily newspapers. The Business Journal chain of weeklies took hold. Business and personal-finance magazines sprouted by the rackful. Cable television added business channels. Then came outlets providing real-time stock market and related coverage, what Kann terms "the new multiplicity of sources for business news"--capped, of course, by the Internet, which by now has been almost entirely transformed from its beginnings as an academic resource to a virtual global marketplace.

From its perch the Journal watched it all, and it has tried to respond on a variety of fronts. Its online operation is one of the few genuinely profitable news sites on the Web, though that might be something of a mixed blessing: Of the 300,000 paying subscribers, 200,000 don't take the paper-and-ink version. The Journal has launched editions in the developing economies of Asia and in Europe, helping recoup the number of U.S. corporate subscribers lost in the '80s, Kann says. In addition, in 1994 the paper began introducing vernacular inserts into major dailies throughout Asia and Latin America. The sections share the dignified, restrained appearance of the mothership--copperplate drawings, long gray columns and all--but are written in such languages as Thai and Korean. The Latin American version, published in Spanish and Portuguese, is the most successful, with a total circulation of 2.3 million.

Then in September the Journal, which does not publish on weekends, launched a domestic variant of its overseas sections: The Wall Street Journal Sunday. This four-page package kicked off in the Sunday business sections of 10 major metros across the country, from the Orange County Register to the St. Petersburg Times. Total circulation of these Sunday joint ventures exceeds 4.5 million. The Journal sells the nationally based advertising and splits the revenue with the host papers after subtracting a publication fee. An editorial staff of five produces fresh material for the Sunday inserts, which the Journal is still pitching to other metros.

While it's far too early to be able to weigh success, Richard Tofel, Dow Jones' vice president for corporate communications, labels the project a "win-win-win--the local papers, the [Journal] and the reader all get more."

In today's familiar marketspeak, the Journal is using its reputation and resources to sell "branded" product--as Tofel calls it, a "21st-century approach to syndication."

It's also a prime example of competition driving creative marketing, and two of the Journal's most adroit competitors in the business news field are the nation's two other national dailies--USA Today and the New York Times. Both papers are successfully leveraging business coverage to extend their audiences, but with somewhat different priorities and approaches.

At USA Today's offices in a pair of sleek half-moon towers across the Potomac River from Washington, D.C., Business Editor John Hillkirk II is discussing the lengths to which the paper has gone to make personal finance an anchor of its Money section--the one with the pointedly dollar-green logo. I mention that Alan Murray had told me that he and others at the Journal now rate USA Today among the leaders in that heavily trafficked field. "That's nice of him," Hillkirk replies with evident sincerity as well as evident satisfaction. "Not long ago we weren't even on their radar screens."

This year Hillkirk and his "Green Team" were honored by the Society of American Business Editors and Writers for producing one of the four best business sections in the country, along with the Boston Globe, Los Angeles Times and Dallas Morning News. The citation stated in part that USA Today's "personal finance information is an integral part of the package, not something separate and apart. And while it's written in a reader-friendly way, it's never patronizing."

Hillkirk has been in charge of the Money section for the last nine years, but he's been with USA Today since 1982, when he was called in from Gannett's Rochester paper to help tend to Al Neuharth's newborn. "In those days this place was surreal," he recalls. "Know what I mean? We were supposed to be a national daily, but no one knew who we were. You'd call and they'd say, 'You mean U.S. News?' We wondered how long we'd last."

Now, of course, just about everyone knows the paper that made color graphics and brevity the sine qua non of the industry. Attending a news meeting, I see an entire wall of the conference room taken up with front pages from around the country, papers that had hit the streets the day after U.S. and allied forces began bombing Kosovo. At first glance I assume they all are Gannett papers. They aren't. Yet each, with its centered color photo of incendiary action and bold headline, looks like a blood brother of USA Today.

Back in his glass cubicle, Hillkirk excitedly ticks off for me recent signs of newfound respect. "Jack Welch at General Electric told us that he finds USA Today better than the Wall Street Journal for what's really going on in the country. The CEOs of Ford and Chevrolet have lined up to come in for interviews... When Greenspan made his big Fed statement at the end of June, our guy in Chicago was allowed onto the Board of Trade floor--a real coup. And Citigroup CEO John Reed told our reporter that he has to read us because 'all my customers do.' "

Nevertheless, Hillkirk appreciates better than most his staff's limitations. "Look, the Wall Street Journal has, what, 250 reporters, all of them covering one thing--business. We have 35 in Money. So, obviously we have to single out what we can do best, know what I mean? Our strategy is all about focus--to be first and to write it so ordinary people can understand. Whether it's interest rates or personal finance, we tell you what it means to you."

Thus, every Tuesday the section runs the popular Your Money column, and each Friday there's a full page of personal finance features. In between, the staff is continually on the prowl for what Hillkirk calls "one big hit" each month, a major piece that breaks the no-jump norm with alacrity and even roves across multiple pages. The Money team is guided by a dictum summarized as BEATMAP:
B usiness travel
E conomics/workplace
A utomobiles
T echnology
M arkets
A d marketing
P ersonal finance

Money staffers are issued wallet-size cards emblazoned with the catechismal exhortation and blowups are taped to walls. The gimmicks are in keeping with the paper's founding philosophy. Says Ray Goldbacher, who edits the personal finance matter, "From day one there was an emphasis on personal finance, because USA Today was intended to be a 'second read' for travelers. Then readers began asking for more news, including the big stories, and we turned our attention to that for a number of years. But in '94, we returned to our roots: back to an emphasis on personal finance. We've found that it's what people really want and need."

Goldbacher, who came to the paper in 1986, assembled what he calls a "talented team" of four and began putting an emphasis on mutual funds coverage. The market was running at full bore and people who'd never owned a share of stock were pouring their savings into mutual funds. Many people who understood little or nothing about Wall Street saw them as a safe way to invest. USA Today seized the opportunity. "One message we started getting from readers, and it continues today, is that unlike their parents they now have to handle their own money," says Goldbacher. "They find it hard and confusing. They feel there are millions of ways to invest--not just through the bank or a broker--and they welcome our ability to filter tons of information and make it digestible."

Doubtless the New York Times desires to perform the same service for its readers. But as the paper continues a decade-long beefing up of its business coverage, it has come around to a distinctly Timesian, big-picture approach to the subject. This is in keeping with the evolving world view of the paper's executive editor, Joseph Lelyveld, a Pulitzer Prize-winning foreign correspondent before he crossed over into management.

"Throughout the '90s, we've said that the Cold War was over and we wanted to look less at the fate of political regimes," Lelyveld says. "Sure, you look at Angola because it's a horror. But you don't care about it in the same way as you did in the days of the Soviet and Cuban involvement. Every change of regime in Ethiopia or Somalia is no longer major news for our readers. But economic policies around the world mean more than they ever did."

Lelyveld, a career Timesman who ascended to the top job in 1994, focused almost immediately on improving the business report. He hired John Geddes back from the Wall Street Journal and made him business editor. At this point the paper's efforts went into mining the realm of personal finance, but in time Lelyveld decided that the emphasis on individual investing had been overdone.

"That's not what readers turn to us for," Lelyveld tells me in his small, pin-neat office. Instead, Lelyveld says, the Times is concentrating some of its heaviest fire on a different target: the confluence of global politics and business. The Times reporter first assigned to this target, and the one whose name comes up most often among others in this field, is David E. Sanger. "The quintessential modern reporter," Sanger's boss, Business Editor Glenn Kramon, calls him.

Formerly the paper's Tokyo bureau chief, Sanger has been on the international business beat in the Washington bureau for the last five years. Over a nostalgic bowl of soba at a popular downtown D.C. lunch spot called Oodles Noodles, Sanger says that while he still misses the more varied life of a foreign correspondent, he has no doubt that he is covering "the most important story in the world. When I left Tokyo and came back to the States, I had to explain to people that what I was covering was the intersection of international news and economics. I don't have to do that anymore. People, certainly in Washington, understand it intuitively now."

One ex-Washingtonian who understands is former Treasury Secretary Rubin. Sanger, recognizing early on Rubin's keen insights into financial markets, assiduously cultivated the mild-mannered multimillionaire trader. This relationship helped him produce stories on his own beat, as well as on other facets of the Clinton administration, that have earned him accolades from colleagues inside and outside the Times. The Wall Street Journal's Alan Murray, in describing the Times as the Journal's foremost competitor, gives Sanger the kind of unadorned compliment one journalist most appreciates from another: "He's really good."

While Sanger concurs that the rise of the everyman investor is the basic explanation for the recent torrent of business news, he says globalization runs a close second. He cites the meltdown of the Russian economy, the tanking of the Hong Kong market in October 1997 and the Thailand-led Asian collapse in 1998 as three occasions in which Americans couldn't help but see how they were directly affected by events in once-distant lands. Overnight, it seemed, plumbers, bus drivers, dentists--people who'd never been sure just where Thailand was, who might've supposed the bhat was something used to play cricket--suddenly knew all about the international crisis caused by the Thai currency. "This shows that while Americans typically don't care much about foreign news, they do care when they can see the effects on their own lives and, in particular, their pockets," Sanger says.

In order to handle the kind of stories generated by such complex economic developments as those Sanger describes, several news organizations, including the Times and the Associated Press, have set up procedures to school new foreign correspondents in the dismal science before they head overseas. AP has written a textbook for its fledgling foreign reporters and has an accountant tutor them in Econ 101. The Times assigns them to its business desk for a month. Indeed, while the bulk of the paper's foreign correspondents report to the foreign desk, some overseas-based staffers and stringers report directly to business.

To help fill the business newshole, expanded twice in the last year, Kramon recently hired five reporters to be based in key business centers around the world: London, Moscow, Singapore, Toronto and Sao Paolo. In addition, editors have instructed the paper's 40 or so foreign correspondents already posted to blend their coverage cocktails, traditionally based on politics and culture, with a stiff shot of business and economics. Not surprisingly, the new demands for stepped-up business contributions from correspondents long considered the exclusive property of the foreign desk don't always go down smoothly. Turf struggles arise. In an effort to improve relations between foreign and business, Lelyveld established the position of international business editor, who sits on the foreign desk.

The very intentional effect of all these moves has been to blur the lines between what some reporters still call "regular" news and business news. "We've recognized that every story is a 'business' story," says Kramon.

Want proof? Take the August 29 Times, a Sunday, as an arbitrary example. The front page carried a story on how contributions from tobacco companies were embarrassing the Gore and Bush campaigns. On the front of Sunday Styles was one piece about New York's "Silicon Alley" developing its own cachet and another on how the beauty business was moving online. The lead of the Money & Business section was on how DNA researchers were becoming entrepreneurs, a story that in an earlier day may have landed on the science page. And Week in Review led with an earthy piece on one-world fallout--a feature about French farmers who, infuriated by high tariffs imposed on foie gras and other delicacies entering the U.S., were retaliating by staging guerrilla raids against that most ubiquitous symbol of globalization, McDonald's.