So what is your doctorate in?

hey-honeyNot long ago, newspaper editors thought the idea of a reporter getting a college education was about sensible as horns on a horse. Applying a slightly different comparison, New York Tribune founding editor Horace Greeley displayed a notice in his paper’s office saying: “No college graduates or other horned cattle need apply.”

Nowadays, of course, college degrees are basic requirements for journalists. Indeed, a former city editor of mine who had left our little New Jersey daily was denied advancement at Newsday a decade or two ago because he lacked such a degree, never mind his ample skills as an editor. The thinking, one presumes, is that only someone who has been broadly schooled in the textbook-learning on offer at university can bring to bear the intellectual breadth needed in a modern news operation.

Fair enough (except, of course, to my frustrated former editor). But what are the limits to creeping credentialism? Should a master’s degree now be the threshold requirement for a journalist? Beyond that, what should the credentials of a teacher of journalism at a university be? How about a dean? Is a Ph.D. a minimal requirement for a professor or a J school administrator?

DeanImageThis all comes to mind as we at the University of Nebraska-Lincoln ponder five candidates for the deanship at the College of Journalism and Mass Communications. Three boast doctorates, while one stopped at his master’s degree and another topped out academically with a bachelor’s. While the first three earned advanced degrees, the latter got their educations on the job, leading impressive advertising and news operations, respectively. (Indeed, all are impressive for differing reasons.)

So which one is best equipped to run a J school? Naturally, one cannot judge them on paper alone. To their credit, the members of our school’s selection committee did not toss the resumes lighter on academic credentials. Instead, they invited the contenders to pitch us on their ideas for how to run a school that aims to supply talented, well-rounded journalists and advertising and PR people to industry – a particular challenge as the industry changes fast around us and the demands for technical skills grow.

The open-mindedness of the committee members may reflect the makeup of our college faculty, a wondrous blend of sheepskin and shoe-leather. All of us have master’s degrees, but relatively few have doctorates. Those without the high-level academic pedigrees honed their craft in years of experience in such places as the New York Times, Newsday, The Miami Herald, The Detroit News, The Denver Post, The St. Petersburg Times (and Politifact), BusinessWeek, The Wall Street Journal and TV stations in markets such as Detroit and Omaha, as well as ABC News. Nebraska is a place where students learn from people who’ve gotten their schooling in the trenches as well as the classroom.

big10-11-nav-logoThe decision, of course, on who will take our mantle won’t really be made by that faculty. We get to weigh in. But, ultimately, the choice will be made by top officials at UNL, most of whom have earned Ph.D.s (though our chancellor’s degree is a juris doctor). Will they demand the Ph.D. union card, consciously or otherwise? Should they, in fact, given that research is a growing requirement for J schools to shine? And, does Nebraska’s entry into the Big Ten demand the credential, not only of our dean but of more faculty members over time, as well? Will the college be taken seriously alongside the likes of Northwestern if we don’t go toe-to-toe on the credentials front? What does it take to run with the big dogs these days?

For wisdom, readers might turn to a report issued last October by the Columbia Journalism School. It traces the growth of professionalism in the field and details longstanding tensions between industry and academia, along with the strains between journalism programs and the higher reaches of universities. “Very few schools are dominated by faculty members who have either journalism degrees or PhDs in communication. And many dean searches turn into contests between a journalist and an academic,” says the report, “Educating Journalists: A New Plea for the University Tradition.”

A.J. Liebling
A.J. Liebling
The authors argue for boosting the quality and quantity of graduate professional education in journalism. They say they hope this would lead to a master’s degree in journalism or a doctorate in communication becoming a standard credential for a journalism faculty member. Taking care to argue for top-quality instruction, they remind readers of Greeley’s thoughts and those of another journalistic icon, A.J. Liebling. The latter blasted his J school training (at Columbia) as boasting “all the intellectual status of a training school for future employees of the A&P.”

On requirements for deans, however, the authors punt. That may be fitting since one of the three authors, Nicholas Lemann, led Columbia for a decade even though his formal education didn’t go past a bachelor’s degree (he was busy cutting a deep swath at the Washington Monthly, Texas Monthly, Washington Post, Atlantic Monthly and The New Yorker). Indeed, Lemann’s successor at Columbia, Steve Coll, likewise didn’t spend more time in a classroom than needed for a BA, but instead put in his time writing seven books while laboring at The Washington Post and The New Yorker. Coll took the helm at Columbia just this year.

So what qualities will prevail at CoJMC? Will the Ph.D. be the price of entry to the deanship here and, increasingly, at J schools across the country (except at that titan in Morningside Heights, which improved a lot since Liebling’s day)? In time, will a doctorate be mandatory for tenure-track positions at all such schools, as it is already at many that are not as enlightened as CoJMC?

Stay tuned.

Smart or sophomoric? BW’s ‘edgy’ cover pushes the envelope

What words come to mind when you look at the image from the latest cover of Bloomberg Businessweek?

For my Reporting 1 students at the University of Nebraska, the words include “amusing,” “comical,” “creative,” “clever,” and “intriguing.” Most of the 30 students in the two sections of the course liked the image and thought it just fine for the book. They would agree with the folks at The Atlantic who suggested it was “edgy.”

The enthusiasts offered other terms, too. “Fun,” “simple,” “funny,” “different,” “unique,” “surprising” and “attention-getting” were among them. Some said it would encourage them to buy the magazine if they saw it on the newsstand – which, of course, is what a cover should do.

“I love this cover,” said one student, who at 23 is a couple years older than most of the others. “If I saw the magazine, I’d grab it. I love the tie-in. It’s definitely an attention-grabber.”

Another concurred, adding a thought about the cover language. “If the title was about a merger, there’s no way I would pick it up. This I would pick up,” she said.

Many found it funny. “It’s fun. I like the design. It’s a mature joke,” she said.

Of course, opinion wasn’t unanimous. A solid minority, including some who found the image entertaining, thought it “inappropriate” for a national business magazine. Some even worried about kids seeing it on the dining-room table or newsstand. Two found it “distasteful.” While saying she found it “slightly inappropriate,” one hurried to add that she was not offended.

And some were just perplexed. “It’s just a couple airplanes,” said one. “Airplanes can’t have sex.” Another said he couldn’t get the image at first, since it looked like a couple planes colliding or flying in tandem. And one, blushing, said the word that came to mind was “sexual,” and she added that the idea was “disconnected.” She asked, “why refer to two plane companies as sexual?”

Classy alternative?
While most students in this sophomore-level class thought the image was a winner, some faculty thought it, well, sophomoric. Echoing the blusher, one sixtysomething prof puzzled over the idea that everything nowadays seems to be cast in sexual terms, especially among folks south of 25 (or, I’d add, south of 40). A longtime newspaper photo editor-turned-teacher argued that manipulating photos just isn’t kosher even if it’s dubbed a photo-illustration (which this wasn’t) because the technology makes the images too believable.

Some, by contrast, thought the image just fine — so long as it suited the target audience. One, who led the art designers at New York Newsday and The New York Times before returning to Nebraska to teach, was reminded of provocative covers Newsday would run to pop off the stands next to the New York Post and the Daily News. And another, a veteran of the New York bureau of the Miami Herald, thought this would, indeed, help the magazine stand out, adding that images of humping animals are not uncommon, so why not?

Outside of school, a friend at National Journal volunteered this (sans capitals, in a Facebook exchange: “it’s funny, it’s original, it makes the point instantly, it’s not actually icky (planes don’t really have sex, people!), and it makes me much more inclined to pick up the magazine than photo of a white dude in a suit or a photo of an airport. sometimes the worthiest stories on the most important topics are really hard to coverize, and i’m sure the writer is glad they found a solution. i wish i had more ideas like this for national journal.”

When I argued that the image might fit The Onion but not BB (or BW, as we veterans prefer), he added that we might see such an image on New York, Slate or The Economist. He might be right about that, since The Economist proved even more edgy, with camels — back in 1994. Of course, that was before the British pub became the force to beat in business magazines and, maybe, had less to lose.

So, gentle reader, what say you? Does an image of jets in flagrante suggest witty, smart, authoritative and sophisticated? Or is it just a ripoff of The Colbert Report and The Daily Show that offers sass instead of style? Does it suggest hip or, rather, desperation to look hip? In the end, do boinging Boeings reflect well on a national business magazine?

Wheelin’ and dealin’ with McGraw-Hill

Just what is a stock worth?

The obvious answer, of course, is what someone will pay for it. And that depends on a host of factors, including the company’s business prospects, the appetite investors have for risk, regulatory challenges and the possibility of big change at the company. Pricing stocks is a gamble with as many variables as a roulette wheel.

So it’s amusing when a self-interested investor group pegs a value for a stock, insisting that’s what it should fetch if only company managers do what the group wants them to do. Just such a group has done this now with the McGraw-Hill Cos., my hard-pressed former employer. Some will laugh while others, including shareholders such as myself, surely hope the group is close to right.

Jana Partners and the Ontario Teachers’ Pension Plan, which recently bought up some 5.2% of MHP’s stock, say the outfit is worth $65 a share. But it will take a breakup to unlock that value and lift the stock out of its mire at around $40, the JOT group suggests. JOT is pushing its vision on chief executive officer Terry McGraw, urging him to take a cleaver to an operation his family has run since 1888. The group, whose holdings top those of the McGraw family’s now, aims to jumpstart an ongoing internal strategic review the methodical McGraw has been undertaking.

JOT offers an elaborate argument to arrive at its $65 valuation. Its presentation, replete with Power Point slides filed with the SEC, includes graphs like that above that spell out in precise detail what the value of the stock would be if such elements as the conglomerate discount and the cost of management overhead were factored out. The bar on the right represents the $65 mark; the one on the left, a depressed recent price. It’s all very tidy and scientific.

Of course, it’s all wishful thinking, despite the veneer of sophistication and precise calculation. JOT, for instance, figures that investors knock $11 off the share price just because the company is a conglomerate. It pegs the cost of the corporate cost structure at $6 a share. Once those millstones disappear — poof! — the stock rises, right?. And it says a buyback of stock, together with enhanced profit margins equaling those of peers, would push up share value another $7.50. Voila, $65.

Despite the numbers, there’s really nothing new about JOT’s thinking. The view that McGraw-Hill is worth more in pieces than as a single, un-synergistic, unit is as old as the company’s diversification. Critics have long carped that Standard & Poor’s has nothing in common with the textbook division. Even within a single division, the information and media services unit, there has been little synergy: before BusinessWeek was sold in 2009 and became Bloomberg Businessweek, it had nothing in common with a group of TV stations MHP put on the market some months ago. As long ago as July 2010, I rooted for a deal of some sort myself to sort out MHP’s challenges.

The difference now, though, is the environment. S&P has been set back on its heels by a Justice Department probe of its Pollyanna ratings — terribly flawed in hindsight — of mortgage securities prior to the housing crash. News of this investigation broke just after S&P downgraded U.S. Treasury debt to AA+, an unpopular move that has riled Congressional critics. Furthermore, recently enacted law, if not changed, will strip away requirements that securities carry ratings by S&P and its competitors. No wonder the stock plunged to about $35 in early August and rival Fitch Ratings downgraded MHP’s debt a notch to A. It all threatens S&P, which is why the outfit has brought in a fix-it man from Citigroup, Douglas Peterson, to take charge.

Then, on the textbook side, hard-pressed states aren’t buying many books for students these days. And the Net is making pricey hardbacks look antediluvian, oh so pre-Kindle. Kids will always need learnin’ but they might not need to pay so much for it, at least not to textbook companies. This is an existential challenge to the company.

All these pressures, I’m sure, have pinned MHP’s shares to the floor. Oh, don’t we all pine for the days when the stock rocketed to $71, back in mid-2007. Why would it ever be worth less? Why only $65 post-breakup now? Those Canadian teachers and their buds at Jana have talked up the value a bit, adding $5 a share so far with their lushly detailed charts and sharp calculations. Thorough coverage by the Wall Street Journal has helped, too.

But the real value of McGraw-Hill won’t be set by chalk-wielding Ontario-dwellers or hedge fund speculators. The market will rule. I’m sure hoping it rules well. Anybody think MHP is worth $100 a share to some savvy buyer? Do I hear $125?

Making business journalism sexy (almost)

Looking for ways to make business journalism come alive for students? How about creating scavenger hunts for juicy tidbits in corporate government filings? What about mock press conferences that play PR and journalism students against one another? Then there are some sure bets – awarding $50 gift cards to local bars for mock stock-portfolio performances and showing students how to find the homes and salaries of university officials and other professors – including yourself — on the Net.

These were among the ideas savvy veteran instructors offered at the Business Journalism Professors Seminar last week at Arizona State University. The program, offered by the Donald W. Reynolds National Center for Business Journalism, brought together as fellows 15 profs from such universities as Columbia, Kansas State, Duquesne and Troy, as well as a couple schools in Beijing, the Central University of Finance & Economics and the University of International Business and Economics. I was privileged to be among those talented folks for the week.

We bandied about ideas for getting 20-year-olds (as well as fellow faculty and deans) excited about business journalism in the first place. The main answer was, of course, jobs. If they’d like good careers in journalism that pay well, offer lots of room to grow and that can be as challenging at age 45 as at 20, there really are few spots in the field to match. These days, with so much contraction in the field, business and economic coverage is one of the few bright spots, with opportunity rich at places such as Reuters, Bloomberg News, Dow Jones and the many Net places popping up.

The key, of course, is to persuade kids crazy for sports and entertainment that biz-econ coverage can be fun. The challenge is that many of them likely have never picked up the Wall Street Journal or done more than pass over the local rag’s biz page. The best counsel, offered by folks such as UNC Prof. Chris Roush, Ohio University’s Mark W. Tatge, Washington & Lee’s Pamela K. Luecke and Reynolds Center president Andrew Leckey, was to make the classes engaging, involve students through smart classroom techniques and thus build a following. Some folks, such as the University of Kansas’ James K. Gentry, even suggest sneaking economics and (shudder) math in by building in novel exercises with balance sheets and income statements.

Once you have the kids, these folks offered some cool ideas for keeping their interest:

— discuss stories on people the students can relate to, such as the recent Time cover on Mark Zuckerberg or the May 2003 piece in Fortune on Sheryl Crow and Steve Jobs, and make sure to flash them on the screen (at the risk of offending the more conservative kids, I might add the seminude photo BW ran of Richard Branson in 1998)

— scavenger hunts. Find nuggets of intriguing stuff in 10Ks or quarterly filings by local companies or familiar outfits such as Apple, Google, Coca-Cola, Buffalo Wild Wings, Hot Topic, The Buckle, Kellogg, etc., and craft a quiz of 20 or so questions to which the students must find the answers

— run contests in class to see who can guess a forthcoming unemployment rate, corporate quarterly EPS figure or inflation rate

— compare a local CEO’s pay with that of university professors, presidents or coaches, using proxy statements and Guidestar filings to find figures

— conduct field trips to local brokerage firm offices, businesses or, if possible, Fed facilities

— have student invest in mock stock portfolios and present a valuable prize at the end, such as a gift certificate or a subscription to The Economist (a bar gift card might be a bit more exciting to undergrads, I’d wager)

— follow economists’ blogs, such as Marginal Revolution and Economists Do It With Models, and get discussions going about opposing viewpoints

— turn students onto sites such as businessjournalism.org, Talking Biz News, and the College Business Journalism Consortium

— have students interview regular working people about their lives on the job

— discuss ethical problems that concern business reporters, using transgressors such as R. Foster Winans as examples. Other topics for ethical discussions might include questions about taking a thank-you bouquet of flowers from a CEO or traveling on company-paid trips, as well dating sources or questions about who pays for lunch

— discuss business journalism celebs, such as Lou Dobbs and Dan Dorfman

— discuss scandals such as the Chiquita International scandal (Cincinnati Enquirer paid $10 m and fired a reporter after he used stolen voicemails)

— use films such as “The Insider,” “Wall Street,” and “Social Network” to discuss business issues

— use short clips from various films to foster discussions of how businesses operate. Good example: “The Corporation”

— team up with PR instructors to stage a mock news conference competition pitting company execs in a crisis against journalism students. Great opportunity for both sides to strut their stuff.

We also heard helpful suggestions from employers, particularly Jodi Schneider of Bloomberg News and Ilana Lowery of the Phoenix Business Journal, along with handy ideas from Leckey and Reynolds executive director Linda Austin, a former business editor at the Philadelphia Inquirer. My biggest takeaway: run some mock job interviews with students and teach them to send handwritten thank-you notes.

And we were treated to some smart presentations by journalists Diana B. Henriques of the New York Times about the art of investigative work (look for her new Madoff book), the University of Nevada’s Alan Deutschman about the peculiar psychologies of CEOs (narcissists and psychopaths are not uncommon), the University of Missouri’s Randall Smith’s view of the future for business journalists (it’s raining everywhere but less on business areas). We got some fresh takes on computer-aided reporting, too, by Steve Doig of the ASU Walter Cronkite School of Journalism and Mass Communication as well as on social media by the Reynolds Center’s Robin J. Phillips.

For anyone interested in journalism, especially biz journalism, it was a great week. As I take the lessons from ASU to heart, my students will be better off. My thanks to the folks there.

There, there, dear: do tears belong in the classroom?

In “A League of Their Own,” that wonderful 1992 film, a young woman player makes a dunderheaded toss and breaks into tears as coach Jimmy Dugan (Tom Hanks) yells at her. “Are you crying?,” he asks, stunned. “There’s no crying! There’s no crying in baseball!”

Boy, can I feel for Dugan. So far, I’ve had to deal with four incidents of tears in school. One time, I believe, the bad toss was mine. In the other cases, well, I’d point to hormones, undergrads facing job-like pressure for the first time or sheltered young women beginning to discover the world isn’t such a kindly place.

Still, I felt as flummoxed as Dugan did. Making girls cry is something only a true jerk would ever feel good about. This is so, even though a wiser colleague at Nebraska, veteran teacher and hard-boiled journalist Kathy Christensen, tells me tears come automatically with breasts. She shrugs them off.

Just under three semesters into my academic career, I don’t find the waterworks easy to dismiss. But, dear reader, you be the judge. Let me know if I blew it or could have handled these situations better:

Case No. 1 – I encourage an outstanding magazine-writing student to pursue an internship with Bloomberg Businessweek, my old employer. Before Bloomberg bought it, the mag had a tradition of taking on bright young interns, most of whom had no business training but who had lots of smarts. A colleague at the mag looks over her materials and says she’d be a wonderful recruit and he could use her skills in projects on business schools; he recommends her, as do I.

But, in myriad ways big and small, BW has changed. Bloomberg has her take a three-hour online test, parts of which are heavy on business knowledge (of which she has none, as everyone involved knows). She fails badly and folks there tell her she’s not a candidate. She comes into my office, crushed and weeping.

So I feel like a heel. I put her into a bad spot, after all, and she suffers for it. It also doesn’t help my credibility with the new BW regime.

Was I wrong? If students are willing to take a test and do badly, is it my fault? I warned her there would be business material on the test, even reviewed some general things with her. But I didn’t realize how much the game had changed. Seems to me I blew it. Did I?

Case No. 2 – As is my normal practice, I flash a student’s paper on the screen from a classroom projector. As a class, we criticize the work. I point out the positives and negatives of the piece, and suggest ways it could be improved. It’s pretty benign and no different from other critiques. We’ve had many such critiques that day. The class doesn’t say much one way or the other about it.

The student waits a bit after the lights come up, but then mutters to me, “you gave me a terrible grade on the paper, then humiliated me in front of everyone. I’m done. That’s it.” And she storms out, furious and in tears.

Her grade, a C+, was not on the screen, though her name was (regular practice in these editing and review sessions). Also, while rushing out, she informs me she will drop another class with me that she had signed up for the following semester and, later, she tops it all of by giving me a scathing evaluation at the end of the course.

Is it wrong to criticize students’ work publicly? The class involved peer-editing, so students criticized one another’s work in every assignment. And, in journalism don’t we face critics every time a reader opens a paper and curses about something he or she reads? In the end, I don’t fault myself for this one, but the drama did throw me.

Case No. 3 – A student has promised a colleague that she would deliver a finished video about a trip the colleague and I took with eight students to Kazakhstan in May. The students are no longer in our classes; some have even graduated, so we have no real sway over them.

The due-date comes and she hasn’t got the goods, but has several legit-sounding reasons. The colleague and I bemoan the fact that several students are behind – a hassle he has had in prior classes – and he gets a bit hot about the general problem. It’s a big thorn in the side for him.

The student, a smart and delightful videographer, breaks into tears. She then begins to apologize, explaining that it’s the time of the month for her (she really said that), she’s got problems with moving to a new city and she’s been working and traveling nonstop for weeks. My heart, frankly, goes out to her. I say, it’s not you that’s the problem here; it’s the general issue of how we can get students to comply with deadlines. I’m sure you will get your work done (which eventually she does, at least most of her work).

When I complain to my colleague later that we shouldn’t be making girls cry, he says, “They make themselves cry.” It’s not his problem, but theirs, he suggests.

So, was she being manipulative? Were we right to rant? Is a deadline a deadline?

Case No. 4 – A top student interviews with an internship recruiter. She says a couple silly things – including asking whether she needs to tell her soccer league that she can’t referee for a week during the internship – and strikes a tone the recruiter says is arrogant. In fact, he tells me afterward that he’s written “humility?” several times on his notes about her.

She comes by and I tell her I’m going to give her some no-holds-barred criticism about her interview. It won’t help her, I say, if I mince words, so I don’t. I tell her precisely what the interviewer had told me, and advise that appearing arrogant cannot help in such settings. You’ve got to seem humble, even it’s just for appearances. She breaks into tears, denies arrogance and says she was not asking for a week off for soccer. He misunderstood, she says, pleadingly.

This is one where tough-love was warranted, I believe. Still, the waterworks were troublesome. My own self-criticism: do mock interviews with students first from now on, giving them pointers that can spare them from making such mistakes. (By the way, she got the internship).

So dear reader, what say you? Are tears something teachers should slough off? Is it better that our kids shed them before they get into the workplace, where the consequences of mistakes can be far uglier? And how would you advise someone, still mystified by the half-adult psyches of undergrads, to deal with them? I’m thinking maybe I’ll just tell the kids that there is still no crying in baseball.

McGraw-Hill: Time for a Deal?

It’s only business. But that was a hard and personal lesson for many staffers at BUSINESS WEEK Magazine. It may yet become a tough lesson for the leaders of McGraw-Hill Cos.

When McGraw-Hill, my employer of 22 years, cut BW loose by selling it to Bloomberg last year, plenty of BW folks felt betrayed. They had committed their careers to the magazine and bought the argument of leaders there that the eighty-year commitment the McGraw family had to the weekly was a forever thing. So long as a McGraw was in charge, McGraw-Hill (MHP) would never sell it, the leaders counseled.

Well, they were wrong, of course. BW, viewed at McGraw-Hill as just another money-losing Internet victim, was quickly snapped up by the business wire. And soon, despite assurances from the Bloomberg camp that the deal was more about buying talent than a big brand name, most of the 200-plus BW vets were let go. It was a harsh dose of the business world’s version of realpolitik, the kind of thing BW folks had reported on but that few of them had experienced. With its formidable global reporting force, Bloomberg just didn’t need all that pricey BW talent.

Now, pundits are vaunting the idea that McGraw-Hill could – or should – be in someone’s sights. Pearson PLC, the $9 billion-a-year British publishing company, is one of the names floated as the perfect acquirer. Textbooks, synergies, global footprint, etc. Such takeover talk, which has long dogged $6 billion-a-year McGraw-Hill, seems as rational and predictable as Bloomberg’s interest in BW. The 101-year-old MHP has been struggling lately with single-digit declines in both net income (down 8.6% last year) and revenue (down 6.3%).

It is perhaps sad, but former BW folks are likely salivating at the prospect of MHP’s demise as an independent company. Turnabout is fair play, as the British say. Even more than that, however, many BW vets have stock options that have been underwater for a few years now [full disclosure: as former chief of correspondents for the magazine, I’m among them. I took a modest number of options with me when I left last year before Bloomberg appeared on the scene]. MHP’s shares traded as high as $72 in mid-2007. They now struggle around $30, after dipping below $24 last fall. In purely stock-market terms, the company seems like a flatliner whose glory days are long behind it.

McGraw-Hill’s challenges loom as high as BW’s once did (and still do). Uncertain prospects cloud the future for MHP’s once high-flying Standard & Poor’s ratings machine, given the vagaries of government regulation, general litigiousness and the tarring the ratings agencies have taken in the recent recession. The recently passed financial reform could cut its margins and expose it to more lawsuits, as S&P president Deven Sharma himself has recently warned (and S&P also warned about rival Moody’s in cutting the rating on the other rating agency giant, a peculiar irony). Prospects are also questionable for MHP’s storied textbook operation, given hard-pressed state education budgets and the march of the Net in the text realm. Flat stock prices? Who should be surprised?

The big question, of course, is whether Pearson or someone else would see as much value in McGraw-Hill as Bloomberg did in BW. The jury is out on whether Bloomberg’s move was a smart one – so far, its main value seem to be putting the Bloomberg name regularly in front of 4.5 million sets of eyeballs at a bargain price. Pearson could likely eliminate a lot of duplication by folding MHP’s textbook operation into its line. As for S&P, that odd beast could be of use to Pearson (which owns the Financial Times along with the world’s biggest textbook publishing operation) or, perhaps, to a Reuters or other financial information service. Certainly, rating agencies are needed and, even without the crazy-days growth of the past and the threat of a litigious future, S&P seems valuable. Slicing and dicing MHP among a few acquirers might make sense.

The atmosphere also seems right. Conditions are much different than 1979, when then-CEO Harold McGraw Jr. repelled a takeover bid by American Express. The popular CEO could rally his family and other loyalists and beat back the challenge. Given the recent anemic stock performance and dubious prospects at the company, current CEO Harold W. (Terry) McGraw III, son of the now-deceased Harold, might find fewer sentimental supporters nowadays. What’s more, the current CEO might do his family and friends a huge favor by putting his company into a global powerhouse that can do something with is still-valuable assets.

Business has precious little room for sentiment, of course. McGraw-Hill taught that lesson to former BW lifers in painful fashion. If a smart acquirer could do more with the bits and pieces of McGraw-Hill, so be it. Certainly, that would be a better fate than watching the company wither into irrelevance. And for stockholders, the premium should at least take the price close to its long-gone high. A deal might be the business world’s version of justice.

A mentor’s passing

Chris Welles, a longtime editor at BUSINESS WEEK and former teacher of mine, died the other day. Chris Roush, who edits the blog Talking Biz News, ran the piece below.

I suspect it is one of many tributes to come about Welles, a major figure in business journalism.  I had occasion to write about Welles myself a few weeks ago. He and another former BW editor, Ron Krieger, introduced me to the foreign world of business journalism in 1980 at the Columbia J School. It’s not too great a stretch to say the pair changed my life.

Welles asked tough questions of business people, making for penetrating journalism. He had a hand in much of the best work BW published. Only time will tell, but I believe that BW peaked during Welles’ time there.

Some profound thoughts here by a former editor for us all at BW:

Ex-BusinessWeek editor Shepard fondly remembers Welles  — 2010.06.21

Talking Biz News asked Steve Shepard, the editor of BusinessWeek from 1985 to 2005, for some thoughts about business journalist Chris Welles, who worked at BusinessWeek for 13 years and died this weekend.

Here is what Shepard, now the dean at the CUNY Graduate School of Journalism, had to say:

“Chris Welles was a genuinely good guy with a journalistic soul. He very much believed that it was the job of the press to hold people in power accountable for their actions and to ferret out wrongdoing. He spent his career doing that, first as a writer, then as a senior editor at Business Week. From the late 1960s to the early 1980s, Chris was probably the premier business writer around, the guy who did the tough stories.

“In his early years, Chris was one of the regulator writers for Institutional Investor, an innovative magazine about Wall Street in the 1970s. He specialized in narrative accounts of shennaigans, abuses, and downfalls. He was also a very successful freelancer, contributing to New York magazine, among others. From 1977 to 1985, he headed the Walter Bagehot Fellowship Program in Business and Economics Journalism at Columbia University. I had served as the first director (1975-76) and Soma Golden the second (1976-77). The program ran into financial difficulties during Chris’s tenure, but he fought to continue it and eventually weathered the storm. Now called the Knight-Bagehot Fellowship Program in Business and Economics Journalism, it has just finished its 35th year as a mid-career opportunity for business journalists.

“When I was editor-in-chief of Business Week, I jumped at the chance to hire Chris in the mid 1980s as a senior writer specializing in investigative and narrative pieces. Though he was soft-spoken and always polite, he was a tenacious reporter with a passion to get the bad guys. I eventually promoted him to senior editor in the finance department because I figured his impact would be felt more by having him work with writers every week rather than write a piece himself every couple of months. And I wanted him to teach the next generation of upcoming reporters. Chris took to editing like a fish to water, passing along a lot of knowledge about finance, a lot of wisdom about reporting complex stories. He was respected and liked by his colleagues.

“Like Lou Gehrig in 1939, Chris started losing some of his skills, and nobody knew why. He was eventually diagnosed with early onset Alzheimer’s disease and retired from Business Week. It was a tragedy for him and his wife Nancy, and a terrible loss for all of us. He took business journalism to a new level, setting the bar ever higher for the rest of us. He has left a legacy for all of us to honor.”

Quotron, E.F. Hutton and the Future of Newsweek


[another piece from the Tabb Forum series:]

For folks in finance, change is nothing new. They’ve long watched technology race ahead and markets shift, long been subject to tectonic changes that left stock exchanges and investment banks to adjust or die. Their world is littered with such relics as stock-quote tapes and Quotron devices, along with fading memories of once-titanic names (remember E.F. Hutton and Paine Webber). Wall Streeters have learned to roll with the punches.

But for those in the media business, change is surprisingly difficult. Newspapers, magazines and even TV networks become “venerable” after a few decades, and they are thought to be immortal, at least by others in the biz. Most of the scribblers who people the offices of the leading media outfits believed – until recently at least – that their institutions would far outlast them. Storied names, such as Newsweek or BusinessWeek, would never go away.

As the Washington Post Co.’s move to put Newsweek on the block shows, however, nothing in any business really lasts forever. Creative destruction is the way of capitalism, whether on the floor of the New York Stock Exchange or in the offices of a weekly news magazine. Newsweek has been eclipsed by the Net, just as the historic role of specialists has been made all but irrelevant by electronic trading. The weekly could easily go the way of Life and Look magazines, pubs done in by TV and the popularization of cameras.

Will Newsweek survive under a new owner? Maybe. Surely, some wealthy character eager to burnish his or her global rep will snap it up for the power and influence it still commands – at least for now. It will likely become a plaything for some mogul, perhaps a Chinese or Middle Eastern potentate, who wants the access to political leaders the media still brings. Almost surely, it will have to be someone who doesn’t mind losing a lot of money on the mag as a tradeoff for the benefits that come along with a big media property.

But will the product be the same? And will it endure? Certainly, a new owner would make a mark on the magazine, for good or ill. In Newsweek’s case I fear that it will be for ill, since the folks there now have a pretty good idea of how to produce a quality newsweekly. Adding to what they already do well – or, more likely, cutting – could be problematic. The people there now are pros and tinkering with their approaches seems doomed to come to grief.

Of course, it all depends on the owner. Bloomberg bought BusinessWeek last fall and, so far, has managed to make some notable improvements. The editors, by reaching into BW’s past and adding some nifty contemporary touches, are turning out a product that boasts of lots of promise again. It’s a far better book than the thin glossies that have marked the last few years. Editorially, Bloomberg’s market-savvy journalists add value, and the parent’s financial backing may just see the pub through until advertisers want in again. However, it’s an open question whether BW’s cachet and exposure to 4.5 million readers – taking the Bloomberg name to more places than the outfit reaches through its 300,000 terminals – will need to be underwritten forever.

Newsweek is a tougher case. So many news organizations are so hard-pressed that it’s tough to see which could be a natural buyer. The synergy issue is crucial. And non-news owners – the moguls – may tire of their toy quickly, especially if they add no real value. Worse, its readership could fast erode, as the Net’s inexorable march proceeds. Yes, the staff will produce versions for the iPad, Kindle or Nook that readers can buy. But will the public want the book even then? While BW does add value for a specialized audience – folks in the capital markets can attest to that – Newsweek by definition serves a broad audience. The mass market seems far less interested in its kind of journalism anymore. Instead, it prizes immediacy and multi-media approaches.

In the end, imagination and technology will dictate the future for people in finance and media alike. The adjustment can be brutal – just ask the scores of talented people BW and Newsweek have lost in the last couple years. Or ask all those bright folks who once populated the mighty investment banks that no longer stride the earth, gone the way of the dinosaurs. Standing outside the process, it becomes clear that the public is better served after the system’s creative destruction has reshaped things. But, now, in the middle of it, it’s hard to see little but rough road ahead for a while. To the good folks of Newsweek, godspeed.