Should private treaties remain private?

Should private treaties remain private?

News is inviolate and nothing should interfere with, or try to influence, the news process.

That’s the principle on which the Mint newsroom functions and now, this is being threatened not by some advertiser with deep pockets or angry company with a battery of lawyers, but a well-intentioned move by the stock market regulator, Sebi.

Sebi’s move concerns private treaties and Mint’s parent company HT Media Ltd is no stranger to these instruments as has been pointed out to me by several journalists from other media firms that routinely get bad press (at least in blogs) for their lack of integrity or credibility or, as is often the case, both. I have no idea about the identity of companies with which HT Media has entered into such agreements, except for one, a company on whom Mint has done, and continues to do, a series of hard, critically objective stories and whose CEO hinted at this arrangement with HT Media to me, hoping that it would prompt me to cut him and his company some slack (it didn’t).

By itself, a private treaty isn’t illegal or unethical. It is simply a barter deal where the media company gets a stake or an asset from an advertising client instead of money. In return, the advertiser gets airtime or advertising space. However, as some media firms have discovered, it is possible to talk up the value of this stake or asset using the media at their disposal. In effect, these media firms put out news that isn’t true (or isn’t entirely true) with an eye on their own finances and with little regard to readers and viewers. Some of them may also happen to be current or future investors in the advertiser whose story is being talked up. Things have now reached such a state that most people believe that private treaties, by their very nature, are unethical. In an ideal world, it is quite possible that private treaties won’t exist and media firms may be able to sell airtime or advertising space (and clients, buy air time or advertising space) without resorting to such arrangements. Yet, in the real world, there really are some advertisers who cannot afford to pay in cash for advertising. To be sure, there are also many large and well-heeled advertisers who prefer such deals with media firms. In such cases, media firms should ask themselves what the motives of this advertiser are. Few do this, given the competitive nature of the advertising business.

Again, in an ideal world, the Press Council of India would have addressed the issue. As that organization’s report on paid content (essentially advertising passed off as news), however, shows—the council put out an elaborate and strongly worded first report which identified many of the offenders, suggested remedies, and (this isn’t really relevant but I have to say it) made glowing references to Mint and its zero-tolerance code of conduct for journalists; it then buried this report and put out a smaller, weaker second report—that may be too much to expect. Last month, Sebi stepped in and dealt itself a hand in the private treaty phenomenon—it mandated that media firms that had private treaties with an advertiser would have to disclose this in every article about the advertiser.

Generally, disclosure, especially full disclosure, is a good thing. Every time Mint, published by HT Media, carries a story on Jubilant Organosys Ltd, for instance, it notes the fact that the promoters of the two companies are closely related. Yet, Sebi’s order would require all reporters to be aware of the private treaties their company has entered into and I am sure that this will change their behaviour. Remember, we are not speaking about reporters and editors being forced to say good things about an advertiser because it has a private treaty with their company. In Mint’s case, we are speaking about smart and honest reporters and editors and the effect that the knowledge that the subject of a story has a private treaty with HT Media will have on their behaviour. Knowing my reporters and editors, I can say with some certainty that while they will continue to do hard and critical stories on such companies, they will probably avoid doing objective good-news stories about them out of the fear that such efforts could be seen as plugs by their peers in other media firms.

In effect, the disclosure that Sebi requires will affect their behaviour and influence the news process—exactly the thing the disclosure was supposed to prevent. There are other issues as well with Sebi’s order but these are procedural: Would it apply to unlisted media firms as much as it does to listed ones such as HT Media? Would the media firm need to disclose private treaties with listed firms only or would it also have to disclose those with unlisted firms?

One of my senior colleagues tells me that I worry too much and that Sebi’s order is fine even if it changes the behaviour of the reporters because all this will mean is that we don’t do good-news stories on such firms but continue to do bad-news ones.

But doing that wouldn’t be fair, and Mint is a fair paper.

Another of my senior colleagues tells me that Sebi’s order is good because it will eventually discourage media firms from entering into private treaties.

Again, that doesn’t seem to be right because such treaties are a form of commerce and Mint prides itself on being for free markets.

So what should we do?

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