Reuters can take a well-earned bow for its coverage of Chesapeake Energy and its CEO, Aubrey McClendon. The news service has broken several major stories in the past three weeks that brought to light McClendon’s questionable financial dealings, including his borrowings against stakes in the company’s wells and investments in a hedge fund. The reports forced the board to strip McClendon of his chairmanship and led to an investigation by the SEC. Chesapeake shares are down nearly 19 percent.
Reuters stood by its initial report about McClendon’s loans as Chesapeake made a strident denial of any impropriety. The company was forced to backtrack after it issued an embarrassing statement that said the company’s board was not “fully aware” of McClendon’s finances. (See my earlier post on this issue for details.)
Reuters has been relentless, filing about 20 articles on Chesapeake over the past three weeks, including a 2,700-word gusher today on the company’s complex deals with Wall Street banks. (See the full catalog of the coverage here.)
The multiple scoops and their aftershocks are a vindication for Reuters’ strategy of bulking up and pushing for high impact business news. For much of the past year, Reuters has been scooping up talent from The Wall Street Journal and elsewhere, even coaxing a few seasoned reporters out of retirement. A piece in the Huffington Post last September captures the scale of Reuters’ ambitions:
“Reuters’ recent hiring spree — including a handful of Pulitzer Prize-winners – has quickly gotten the media world’s attention. At the same time, Reuters has relaunched its website to better showcase its vast reporting in a more consumer-friendly way, stepped up social media efforts and increased analysis, opinion and enterprise reporting — all elements that may play better on the web than in straight wire copy.
“Reuters isn’t giving up on breaking financial news that paying subscribers want or reporting international wire stories that cash-strapped newspapers, lacking foreign budgets, increasingly need. However, Deputy Editor-in-Chief Paul Ingrassia says the company wants to go beyond breaking news. ‘I think what we’re making a bigger effort to do is not only be first with events,’ Ingrassia said, ‘but very quickly and analytically … report the meaning and impact of those events.'”
The big issue for Reuters is whether it can really make the impact it wants without a major print publication. As old-fashioned as it sounds in today’s digital age, a print title can complement other media properties. Look at how Newsweek has helped the Daily Beast and how Bloomberg has taken BusinessWeek to new heights.
Reuters enjoys a strong position among traders, fund mangers, corporate chiefs and policy makers, but that’s a small audience compared to that of, say, the New York Times. The Reuters website doesn’t even place in the top 50 news sites, according to ComScore data released last fall.
I’d expect Reuters to look for a way to get a bigger payoff for its great journalism.
So don’t be surprised if Forbes becomes a purchase target. Its private-equity investor Elevation Partners might be open to selling after enduring a horror show of red ink since buying a stake in 2006.