Follow the Money: Top Tips for Business Journalism from Reynolds Week

Each year in January, about two dozen business journalists and educators convene at Arizona State’s Walter Cronkite School of Mass Communication for Reynolds Week in Business Journalism.

Put on by the Donald W. Reynolds National Center for Business Journalism, the two-and-a-half-day business bootcamp is supposed to bolster attendees’ ability to cover money.

Reynolds Week instructor Leslie Wayne said business reporting matters, regardless of your beat. “So many stories, whether it is sports, fashion, government or politics, have a financial angle,” Wayne said. “Being comfortable with numbers will open doors in the newsroom, allow you to ask better questions and get better assignments.”

As one of the Reynolds Fellows, I walked away with these valuable insights, tips and resources from each session.

“Telling Stories with Statistics”

Amar Mann, supervisory economist and branch chief of the Bureau of Labor Statistics (BLS), told journalists how to use BLS statistics for their business stories. Mann said BLS data can be used to help gauge national and local economic trends, such as the temp industry, which he called a “great indicator of where the economy and the job market are heading.”

Another indicator business journalists should pay attention to, according the Mann, is employment in food services and drinking places. High numbers means people have money for eating out. “That’s always a good sign,” he said.

Story ideas

• Education as the “Great Equalizer” when it comes to unemployment across race, age, etc.
• Health insurance costs having risen 30 percent since 2010 and make up 7.6 percent of employee compensation costs
• How the lack of access to medical or retirement benefits affects a quarter of all workers
• Repeal of Obamacare (Stats will be available in 2017 Employee Benefits Survey in July)

Advice

• Health care has been recession-proof — seven of the 10 fastest-growing occupations are related to health care
• Look at the full spectrum of underemployment
• Tips on how the government measures unemployment

Resources

• Occupational Employment Statistics(OES) – annual employment and wage estimates for over 800 occupations
• BLS’s regional homepage – unemployment stats by states, regions and census region
• Industries at a Glance – snapshot of more than 100 industries including state and regional data
• The Economics Daily – highlights of BLS data with charts and maps
• Economic Summaries – monthly updated summaries for 50+ largest US metros
• Email subscriptions – regular updates about different categories

“Trump and Business”

“With covering Trump, you never know if you’ll get tomatoes or roses thrown at you.”

Financial journalist Leslie Wayne, who has produced more 1,500 bylines for the New York Times over the last 20 years, said it’s important to point out that unlike former President Barrack Obama in 2008, President Donald Trump inherits a solid economy. The former Reynolds visiting professor urged journalists to pay close attention to the following issues:

Taxes and trade

• Trump’s threat to put a 45 percent tariff on Chinese imports could lead to “trade war”
• Those buying Chinese goods are going to be paying more money
• Tariffs won’t add more manufacturing jobs (“have been mostly lost to automation”)
• Companies will be putting jobs in other low-cost countries

The banking system

• Dodd-Frank Wall Street Reform and Consumer Protection Act
• Trump has vowed to dismantle it, but it’s “unlikely” that it will gain traction in Congress
• Controversial Volcker Rule is “vulnerable”
• Be aware of capital requirements, related “too big to fail” concerns and a possible weakening of the Consumer Financial Protection Bureau

Infrastructure

• Trump mammoth $1 trillion infrastructure plan will primarily be financed by private-sector investors and developers who get tax credits for raising money
• Paying private companies billions means they would own the assets
• That means only profit-making projects like toll roads, not sewage plants, would get funded

The FED, tax cuts and interest rates

• Pay attention to Trump’s plan to replace Federal Reserve chair Janet Yellen
• Massive tax cuts and infrastructure spending will fuel inflation and increase national debt
• Falling prices will lead to higher bond market rates
• Rise in dollar is good for traveling abroad, but bad for U.S. exports

Questions that help detect conflicts of interest

• Is Trump acting in the interest of the nation or in the interest of himself?
• Is he adhering to the Emoluments Clause?
• Is he covering corporations owned or controlled by foreign governments?
• Does his business ownership, such as the Trump Tower in Istanbul, compromise his decision-making in office, such as standing up to Turkish President Recep Tayyip Erdogan?
• Will he use the Trump hotel in D.C. to curry favor with foreign diplomats and countries?
• Is the blind trust he agreed to put his money in really blind if his kids are in charge?

“Cash Flow Statements”

When following the money, chief of client relations at Bloomberg News Tom Contiliano said, cash flow statements are the place to start.

“Companies that lose cash don’t exist for long,” the 18-year Bloomberg veteran said. “Cash is easy to verify and understand and is the basis of credit analysis, bond ratings and a host of key financial decisions.”

Cash flow from operations

• Documents cash generated from (or spent on) customers, suppliers, taxes, interest
• Usually most important section and should be positive
• Closely related to net income
• Operating cash flows and net income should move in tandem

Cash flow from investing

• Should be negative, especially when companies are growing and investing in fixed assets (CapEx – Capital Expenditures) or purchasing equity investments
• Rare inflow is usually caused by segment divestitures

Cash flow from financing

• Records cash generated from stock sales and debt offerings
• Will be negative when dividend payments and loan repayments outpace security issuance

Questions to ask about cash flow statements

• Does a company invest a lot of money on day-to-day basis?
• What’s the ratio of operating cash flow to net income, and is there a wide discrepancy (signified by a large absolute ratio)?
• If so, has it been recurring? What are the largest sources and uses of cash disclosed by the company filings?

Pieces of advice

• Write forward-looking stories (“Very few readers care about historical stuff anymore, or at the least, it has been commoditized”)
• Companies with a lot of free cash flow are usually active in the Mergers & Acquisitions sector. Look for deals they might be striking up.
• Earnings and cashflow ought to be similar (“If they’re not, that’s a red flag”)
• Keep an eye on capital spending, which usually reflects business confidence

“The Financial Future of Millennials — more than college debt”

“Millennials are more than selfie-taking, Amazon-ordering hedonists — they are a diverse group ranging from the digital natives born in the mid-1990s with a mouse in their hands to those coming of age alongside digital technology, born in the early 1980s.”

In her presentation, long-time Forbes contributor J. Maureen Henderson shared advice on how to cover millennials and money.

Why cover millennials and money?

• At 83 million, millennials outnumber baby boomers (“You either are them, were them or will be them at some point”)
• Many of them are now stepping into power positions in their careers
• Millennials’ consumer power: Based on market research, they are now driving business decisions

Undercovered issues

• Millennials’ lack of financial literacy, stemming from lack of financial education
• Stories that center experience of millennials beyond stereotypes, “Writers need to take initiative to treat specific subsets differently”
• Stories by millennials about millennials and their strengths
• Millennials’ appetite for personal development. Why are they attracted to self-optimization, what drives the industry?

Common pitfalls

• Writing about them without talking to them or covering the entire spectrum
• Staying in a filter bubble; for instance, assuming that what goes for young, educated urban millennials is true for and interesting to everyone else
• Not questioning sources of data. Who stands to gain from a statistic or perspective?
• Painting with a single brush (“Not every millennial is entitled”)

What to do when covering millennials

• Parse sources’ validity — is it an app or a company? (“Somebody always has an agenda”)
• Differentiate between early and late millennials, as subsets might skew statistics
• Have a point of view and develop a voice that’s both authoritative and empathetic
• Writing in a distinctive, millennial tone
• Consider whether generational differences are simply artificial constructs; Think about the historical, political and socioeconomic context

Sources for stories

• Social media (“Twitter is terrific for people, perspectives and referrals”)
• The Daily Skimm – daily newsletter catering to young professionals
• Help a Reporter Out – resources for sources

“Big Pharma & the Opioid Epidemic”

“When you do good stories, your readers will trust you more and are more willing to share information.”

Harriet Ryan, investigative reporter with the L.A. Times, shared tips on how to cover the deadly spread of prescription drugs. In 2012, Ryan wrote about Purdue Pharma, the manufacturer of best-selling opioid OxyContin in an investigative series called “Dying for Relief.”

Potential (business) stories and undercovered issues

• Exploring how “Big Pharma” companies exert influence, e.g. “promoting” (industry term for visiting doctors at their practices, etc.)
• Lobbying members of Congress and state legislators
• Doctors’ inadequate education leading to poor discipline, and, in turn, to deaths
• Drug monitoring/fraud alerts
• Measures taken at state level (laws and programs like the “ Angel Initiative” that can measure where state falls across that spectrum of activity)
• The substance abuse business, especially the rehab industry
• Gap between talking about addressing epidemic and tangible action, e.g. putting money behind it

Sources and resources

• Advocacy groups, private rehab centers, addiction doctors, law enforcement
• EDGAR (“Electronic Data Gathering, Analysis and Retrieval” system)
• PACER (“Public Access to Court Electronic Records”)
• State licensing agencies like the Medical Board of California
• Market research platforms IBISWorld and BCC Research

How to Cover Silicon Valley and Technology

One of the key points author, journalist and professor Alan Deutschman made in his presentation, titled “How to be a sane journalist in an insane world,” was that it’s hard for tech journalists reporting on Silicon Valley startups to stay skeptical and critical.

“They make so much money and do everything to look like paragons,” the author of “The Second Coming of Steve Jobs” said. Deutschman also pointed out that it’s becoming increasingly tough for “hard-minded journalists” to get access to executives.

Private companies not having to disclose information about their business and their risks is also problematic because it makes it “harder for journalists to understand a company,” Deutschman explained. One example is “private liquidity programs,” a new way to reward early investors and employees without going public.

“Top 10 Tips for Investigative Business Reporting”

“The basics of investigative journalism are pretty old-fashioned, but reporting is now enhanced by a treasure trove of online databases, news alerts and tougher transparency laws.”

Reynolds Chair at Washington & Lee University Alecia Swasy investigated Procter & Gamble in her book “Soap Opera: The Inside Story of Procter & Gamble.”

Pieces of advice

• You can investigate no matter where you work. “All stories have local connection.”
• Fall in love with the boring work. “You must do a lot of really dull research in dusty morgues.”
• Expect a lot of dull moments before you can have eureka moments
• Ask if company has archivist when information is not available on its website
• Never leave an interview without getting names of additional sources you can talk to
• Follow the food chain: Who’s who on boards? “Learn where/when they graze with pals for board junkets at PebbleBeach.”
• Nurture PR people (“They don’t get a lot of respect”)

Sources and resources

• Sqoop – email alerts about companies (SEC filings, patents, courts)
• Seeking Alpha – platform for investment research incl. transcribed earnings calls
• Bloomberg Terminal (“Treasure trove”)
• Yahoo Finance (“Provides similar insights as Bloomberg Terminal”)
• LexisNexis – currently available for $19.95/month
• Bloomberg BusinessWeek
• Old phone books (“Landlines are antiques for some but not all. Get directories for churches, PTA, soccer club, Rotary, etc.”)
• Agencies that regulate companies: SEC, FDA and OSHA, lobbyists (must disclose), courts like the Delaware Court of Chancery, university ties in R&D, consultants

“The Challenges of Community Business Reporting”

Government and political reporter Amy Wu of the Californian shared tips on how to excel as a local business reporter. Wu contributed to the investigation into Proposition 47.

Pieces of advice

• Attend local board meetings: city councils, Rotary Clubs, chambers of commerce, taxpayers’ associations, business associations, etc.
• Stay until the end, when they mention names and announce projects
• Showing up in person helps build sources
• Immerse yourself in your community
• Press releases can be turned into Tweets

“The Business Angle for Political Reporting”

Evan Wyloge, a senior reporter with the Arizona Center for Investigative Reporting, provided a host of resources that can help reporters with graphic reporting using census data.

Resources and tracking tools

• Federal Election Commission – campaign finance data (Elizabeth Warren example)
• Legislative Influence Detector – compares legislations to tens of thousands of laws, runs plagiarization test
• CPI’s State Integrity Investigation – data-driven transparency and accountability analysis
• If This Then That – automated bill tracking
• Good Jobs First – subsidy tracker for individual companies ( Citrix Systems example)
• AZCIR Model Government – outsourcing legislative ideas

Benjamin Bathke is an entrepreneurial freelance journalist covering media innovation, startups and intractable global issues for Germany’s international broadcaster Deutsche Welle, as well as several other international publications. In 2015-16, Ben was a Global Journalism Fellow at the Munk School of Global Affairs and a multimedia storyteller for Washington University in St. Louis. You can follow the 2017 Reynolds Fellow on Twitter and see out more of his work here.