Media giant and trusted financial information provider Bloomberg has been engaging in a practice that can only be described as ‘shady.’ The trusted source apparently has awards and incentives for market-moving stories structured into the bonus payment structure for its reporters.
If information like this seems a bit shocking, that is probably a good thing. It is important to hold out hope for fair and unbiased reporting practices, particularly when the reporting pertains to financial markets and is used as investment advice.
Even more shocking should be the realization that this news is not fresh or breaking. In fact, it was quietly reported in The New York Times in an article written by Stephanie Clifford as early as 2010. It was again alluded to in 2011 in a piece by Jodi Enda that was published in the American Journalism Review. This year, Amy Chozick brought it up over the summer in another New York Times article.
So, this explains a lot: https://t.co/Yg3vpIxzzQ
— Jesse Powell (@jespow) December 12, 2018
If you believe that…
The adage “you can’t believe everything you read on the internet” is sound advice. For certain sectors of society, it is kind of a given. Generation X, for example, was taught this in college. Our kids are learning it in elementary school.
Unfortunately, this does not cover everyone. As more and more of day-to-day living is conducted online and internet news sources become the primary means of disseminating information, people are at risk. Discernment is not a skill developed overnight, nor is it kept up without careful maintenance.
Furthermore, Bloomberg is a media giant in the truest sense of the word. In fact, it would be considered one of those “trusted sources” the kids learn about in school. Bloomberg is the kind of news source one accesses for trusted, reliable, up-to-the-minute information. For a company such as Bloomberg, widely known to be a hub of information and data for investors, the standard ought to be even higher.
Bloomberg even moved beyond media operations recently to partner with Galaxy Digital Capital Management in the creation of a cryptocurrency index, the Bloomberg Galaxy Crypto Index (BCGI). This index tracks the top cryptocurrencies weighted by market capitalization.
Unbeknownst to many of its news followers, this is not a new policy for Bloomberg. The company was originally a financial software and data technology firm. Tracking digital currencies will not be a stretch from its origins. However, according to an array of other media sources, this practice is uncommon.
Journalists, traders, bankers, and PR personnel alike balked at the idea that this sort of compensation package existed for reporters. Concerns such as the potential for pushing or stretching data and stories in order to move markets were cited, as was the issue of traders viewing headlines and trending news as a reliable platform for rapid decision making regarding vast sums of money.
A spokesperson from Bloomberg disagreed with this interpretation of their company’s highly questionable practice, stating that while the news focus at Bloomberg is on actionable items, they are simply reporting on these market driving factors — not influencing them.
However, in reaching out to former Bloomberg employees, one did anonymously confirm that market-moving stories are in fact tracked by Bloomberg. Not only that, the tracking does play a role in bonuses for Bloomberg reporters.
Apparently, at some point in the past, Bloomberg’s compensation was tracked differently, specific to the sales of the Bloomberg Terminal. However, at this stage, team performance, personal performance, and market-moving are weighted within the compensation decisions.
To shill or not to shill?
As any reporter is aware, even a small change in wording or focus can alter the tone of an article or news story. When a writer for a well-established and frequently cited news source such as Bloomberg, linked below, purposefully angles something in a market-moving manner, the ramifications can be felt throughout an entire Google search within 24 hours — perhaps less. And the writers get a hefty bonus. The fox is truly in the hen house.
— Bloomberg Crypto (@crypto) December 13, 2018
Hope still exists for the value of a trusted and unbiased news source. However, Bloomberg, cited across TV, radio, internet, and printed media sources, is decidedly a significant influencer.
At this point, fake news, or the melding of valid information and misleading propaganda, is a passionately debated issue at a global level. It is disconcerting to consider that one of finance’s most trusted media outlets has been biased from the start.
Think Bloomberg is still a trustworthy news source? Let us know in the comments below!