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Paddy Manning got it right, Australian business media is failing its customers

Last week business journalist Paddy Manning abruptly left Fairfax Media after criticising his employer in public, and in a rival publication. His departure is not surprising – but there is much more to…

Big Business - like Big Government and Big Unions - should be held to account fearlessly by our media. But all too often the media pick sides.

Last week business journalist Paddy Manning abruptly left Fairfax Media after criticising his employer in public, and in a rival publication. His departure is not surprising – but there is much more to this story.

Manning had criticised the Australian Financial Review for publishing “creeping advertorial” content and more widely, the newly announced Fairfax operational strategy that combines the business reporting of The Age and Sydney Morning Herald (known as BusinessDay) with the Australian Financial Review.

Initial reports said Manning had been sacked. Manning later tweeted he had resigned; in an interview with the ABC, chief executive Greg Hywood said “we had to let Paddy go”.

Whatever the truth, the whole incident should be a warning sign to senior Fairfax management, investors, and subscribers.

What is particularly troubling is that Manning obviously felt that he couldn’t make those criticisms within the organisation. Conversely if he did make those criticisms he felt ignored.

But despite having been removed – Manning was quite right. People just don’t like reading advertorials – I know I don’t. Public relations is a very important business activity – but when business has to pay the media to run their PR then you’ve got to wonder if any real value is being generated.

We have just come through a massive public debate on free speech – there was an attempt to hobble the media’s ability to criticise government under the guise of privacy concerns and accountability provisions. But the role of media isn’t just to shine the spotlight on government – it should be shining the spotlight on everyone.

Big government, big business, big unions, in fact all centres of power should be held to account and subject to criticism. That is the role and function of the media in a liberal society. The media itself is held to account through competition amongst the media itself – articles such as this, for example. A media organisation that relies on advertorial revenue simply cannot perform that function.

The thing is that advertorials are not just another form of advertising. The message from advertising is clear. The advertiser is buying space in the media to sell its own message. The media does not (necessarily) endorse the message – it is a simple arms-length transaction.

Advertorials, however, are complex and messy. Here the media is being engaged to sell someone else’s message. The story ceases to be news, or opinion, and becomes public relations. But the value consumers place on news and opinion and public relations is very different. Here the media must endorse the message contained in the advertorial.

So maybe I’m over-reacting, seeing a potential problem that won’t actually manifest itself. Fairfax could argue that they are very well aware of the AFR’s excellent reputation, and would never squander that reputation by producing dodgy advertorials. Indeed that would be a good argument – their reputation is a very valuable asset and Fairfax is best placed to manage its own reputation. But that simply brings us back to Paddy Manning. He got sacked for saying, in public, that Fairfax was squandering its reputation. Why wasn’t his concern alleviated in private? Why couldn’t Fairfax management convince him that he had nothing to worry about?

When insiders go public in such a spectacular way, outsiders should take notice.

It worries me – as an avid consumer of news and opinion – that the media should see its role as selling PR to its readership as opposed to providing a platform for advertising while providing news content. Consumers should be as well-informed about business and economics as they are about politics.

It is here that I think the Australian business media doesn’t serve its customers as well as it could or as well as it should. One of the biggest economic stories right now is the forthcoming federal budget. Most of the media coverage of the budget will revolve around the political strategy of the budget. There will be little coverage of the economic strategy, and even less basic fact-checking.

Last week the AFR’s John Kehoe had this story (paywalled) about budget revenue where he pointed out that Treasurer Wayne Swan had been misleading the public into believing tax revenue had been falling and not actually rising. But Wayne Swan has been doing that for years – and the media should have pulled him up on that years ago.

In fact the Wall Street Journal Asia criticised Wayne Swan for this sort of thing in 2009. At the time I was struggling to interest the local media in Swan’s extensive abuse of language when talking about the budget. To be fair to the AFR there has been a massive improvement in that paper since a new editor was appointed and new management installed in 2011.

I worry there could be a perception that the AFR decided to confront Swan on this issue is because he is weakened. In fact his poor performance is now so obvious that the media cannot ignore it. However, the idea of “hyena journalism” (that is, going after the weak and wounded) undermines the good work that is done. Holding the government to account is just as important when the government is popular than when it is unpopular.

Kehoe has probably earned the Treasurer’s wrath and I imagine rude telephone calls would have been made – either to himself or the AFR editor. I hope the AFR publishes more of that sort of thing and not less.

The story would have been interpreted as the AFR choosing sides against the government. The Australian has long had a reputation as being anti-government. That is unfortunate – the media shouldn’t be seen as being pro-government or anti-government. Rather the media should be seen as holding the powerful to account for their actions.

I imagine much the same sort of thing goes on in corporate reporting too. If Paddy Manning is to be believed, it does. Now I don’t want to argue that the media should be pro-business or anti-business in the same way as the media shouldn’t be pro-government or anti-government. Rather the media should aim to the job of reporting well. Unfortunately all too often the Australian media don’t do that job well and does pick sides.

Consider, for example, the mining tax – this policy was predicated on the notion that minerals belong to all Australians, and miners didn’t pay enough tax. I found it astonishing that the media did not immediately challenge either of those two arguments – choosing in effect to back the government in what turned out to be a bitter fight with the mining industry. The Commonwealth of Australia is a federation and the minerals belong to the States. I cannot recall any journalist making this point or asking the federal government about the federal consequences of the mining tax.

So Australians got to read a lot about the political strategy surrounding the mining tax but not nearly enough on the economics of the mining tax. For too long large sections of the media, with The Australian being an honourable exception, simply accepted the Treasury arguments that the mining tax was good for Australia and wouldn’t impact mining at all. It was only after a serious error was uncovered that the hyena principle kicked in and media sentiment changed.

In a world where the media is a player and not just an observer, people will always imagine it is picking sides. This further undermines any argument that advertorials can be innocuous.

I don’t think that the Australian media is captured by government or business, but I do think that it is too subservient to authority and power. This is a mistake – there have been some great outcomes when the media sticks to its guns. The Australian fearlessly exposed the waste associated with the 2009 stimulus spending and the Sydney Morning Herald exposed Craig Thomson.

There is a fine Latin expression, “Merda taurorum animas conturbit” and in a world of spin and PR it is the media’s role to highlight and showcase the bullshit. That means less hyena journalism. It also means that the media must be less credulous and more cynical.

A fearless media, however, requires financial stability and deep pockets. Therein is a serious challenge. The long-standing media business model revolving around selling advertising is in trouble. Firms struggling to maintain their own market position are not able to challenge the great and powerful in our society. In fact the recent assault on free speech was the hyena principle working in reverse. The government opportunistically tried to muzzle a weakened media industry.

So where does this leave us? Paddy Manning lost his job for speaking truth to power. That is what good journalism is all about. On the other hand I don’t blame his employer for sacking him. The Australian media generally would be greatly improved if more journalists would emulate Manning’s example – not criticising their employers in public, but rather telling the bitter truth about what is going on in the world around us. It is only through fearless reporting that a media firm could earn enough of a reputation to run advertorials. Of course, no media organisation with a reputation for fearless reporting would ever see the need to accept advertorials.