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Congress has recently inundated the Federal Election Commission with demands for information connected to the Internal Revenue Service tea party targeting scandal and the unrelated political activities of a former FEC employee.
The result: Dramatically delayed responses to Freedom of Information Act requests logged by members of the press and public who seek unpublicized information from the FEC — the federal government's election law enforcer and regulator.
"The agency has been receiving a higher than normal volume of FOIA requests recently, which is impacting our response times," FEC staffer Deborah Foresman wrote today in response to questions about the status of a Center for Public Integrity FOIA request filed on May 1 that seeks various agency emails.
The FEC on May 19 promised in writing to respond to the Center for Public Integrity's request by June 13 — saying it needed time to "appropriately examine a large quantity of separate and distinct potentially responsive records."
The FEC has yet to produce the records, and until today, the agency had not communicated about the request for nearly two months.
By law, the FEC has 20 business days to respond to FOIA requests. During its 2013 fiscal year, it took the FEC an average of 16.3 days to process "simple" FOIA requests, the agency stated in a recent report.
Asked what people or entities are responsible for the workload uptick resulting in FOIA request delays, FEC Vice Chairman Ann Ravel pointed to Capitol Hill.
"The FEC has received many requests and subpoenas from congressional committees," Ravel said. "Attorneys have been detailed to work on reviews of documents and emails."
Ravel added that the FEC — already strapped for funding and resources — has invested in new software to process "the large number of emails going back many years to be able to expedite the process."
FEC Chairman Lee Goodman and the FEC press office did not immediately return requests for comment.
Officials at the U.S. House's Committee on Ways and Means and Committee on Oversight and Government Reform, both of which are investigating the IRS' targeting of tea party and other conservative groups, also did not immediately return requests for comment.
Lois Lerner, the former IRS exempt organizations division director at the center of the House investigations, worked at the FEC from 1981 to the early 2000s. In late 2000, the FEC appointed Lerner acting general counsel. Lerner joined the IRS in 2001 and resigned in 2013.
Republicans on the Committee on Oversight and Government Reform are also investigating the case of April Sands, a former FEC attorney accused of campaigning for President Barack Obama while on the job.
An FEC report indicates the agency "generally receives less than 100 FOIA requests per year" — for example, 87 during its 2013 fiscal year, 60 during its 2012 fiscal year. At the end of its 2013 fiscal year, the agency reported 12 "backlogged" requests.
Because of cost concerns and the relatively low number of requests, the FEC does not employ an online system to track FOIA requests it receives. Nevertheless, the agency says it "strives to provide requesters with detailed status update information as quickly as possible."
Lara Dieringer, program coordinator for the nonpartisan National Freedom of Information Coalition at the University of Missouri, urged the FEC not prioritize congressional requests over those from the press or general public.
"FOIA is for the citizens," Dieringer said. "Freedom of information should hold no priority, except for the order in which requests come in."
A congressman who has been criticized for being too close to the financial industry Thursday declared that his broad support for payday lending firms is about “trying to make sure individuals have dignity and aren’t ripped off.”
Rep. Gregory Meeks, D-N.Y., spoke to a breakfast meeting at the National Press Club for Master Your Card, MasterCard’s “public education” effort to show consumers, small businesses and governments more ways to use electronic payments.
Meeks was dubbed a member of the “banking caucus” in a Center for Public Integrity investigation released in April. Just before he spoke, the group heard from Rep. Steve Stivers, R-Ohio, another “banking caucus” member and former megabank lobbyist.
Meeks told the crowd that efforts to tighten oversight of high-cost, short-term loans targeting poor people will “take options off the table,” driving consumers to neighborhood loan sharks.
“If you’re focused on that market, you’ll make money,” Meeks told the group, mostly employees of financial companies and industry-supported nonprofits focused on “financial inclusion.”
The event marked the rollout of a paper written for MasterCard by an MIT professor and subtitled “How emerging electronic payment technology can provide financial services to underserved communities.”
Financial access and financial inclusion have become buzzwords in the industry as companies strive to cultivate new revenue streams in the wake of the 2008 economic meltdown. Financially underserved people already provide $89 billion in fees and interest income for the industry, according to a 2012 study by the Center for Financial Services Innovation, one of the breakfast’s sponsors.
Ten million American households lack bank accounts, either by choice or because of banks’ background-check systems and other barriers to access. The group skews poor and non-white; many live in in inner cities or rural areas that lack bank branches.
If the industry can “mainstream” more of them — for example, by encouraging them to use electronic payments instead of cash — these people will provide billions more in new revenue. Thursday’s “expert briefing” breakfast was titled “Electronic Payment Technology: A Gateway to Mainstream Financial Services for the Underserved.”
The Center identified Meeks, Stivers and nine other House members as the financial industry’s go-to lawmakers on the Financial Services Committee. The members work closely with Washington’s 2,000 financial lobbyists, writing letters, proposing industry-friendly legislation, holding hearings and threatening agency budgets as they pressure regulators to ease up on banks.
Meeks has raised $1.2 million from the financial industry since the 2010 election cycle including $6,500 from MasterCard. Stivers has raised $2.6 million including $2,000 from MasterCard.
When federal election lawyers decided the nonprofit Crossroads Grassroots Policy Strategies likely violated political spending limits, campaign finance watchdogs were certain the Internal Revenue Service would take action.
After all, lawyers for the Federal Election Commission argued that Crossroads GPS, co-founded by Republican operatives Karl Rove and Ed Gillespie, spent more on politics than anything else leading up to the 2010 election.
Then the IRS tea party scandal exploded.
Republicans in Congress began waylaying the IRS over what they said was the systematic and inexcusable targeting of tea party and conservative groups. And the Treasury Inspector General for Tax Administration declared that the agency had employed “inappropriate criteria” in heavily scrutinizing some groups' tax-exemption applications.
The IRS’ nonprofit division, grappling with a decimated staff and limited resources, effectively lost whatever nerve it had left. Notably, it came to a near standstill on deciding whether it should grant "social welfare" nonprofit status to Crossroads GPS and other conservative groups. It likewise balked at denying or revoking nonprofit status for a growing constellation of politically driven, big-spending liberal nonprofits such as Patriot Majority USA and Priorities USA.
The IRS knew that many of these groups were highly political. But “nobody wanted to say 'no, you’re not exempt,'” said an IRS exempt organizations division staffer who asked not to be identified for fear of losing his job.
“We stalled so we wouldn’t have to say no,” he added.
The paralysis allowed organizations waiting for IRS approval to continue to spend freely on elections while keeping the names of their donors secret.
The tea party scandal, combined with Congress systematically stripping the IRS of resources and clout over decades, has led to an exempt organizations division that has all but quit regulating politically active nonprofits in any consistent, demonstrable way, a six-month Center for Public Integrity investigation reveals.
The investigation, which involved a review of thousands of pages of IRS documents and interviews with more than two dozen current and former IRS employees and administrators, finds the agency’s nonprofit regulation division has:
- Bled 14 percent of its staff positions during the past two decades while the number of nonprofits it regulates has grown by more than 40 percent.
- Scaled back inquiries, as the number of nonprofit group tax returns investigated recently fell by 10 percent, from 11,699 in 2011 to 10,575 last year. Applications for “social welfare” nonprofit status jumped 27 percent from 1,777 to 2,253 during the same time.
- Reduced the number of denials for exempt status for social welfare nonprofits from nearly 4 percent during the early 1980s to less than a quarter-percent in 2013.
- Softened, tabled or reversed course on at least a dozen proposed policy positions or enforcement plans after criticism from politicians and lobbyists.
IRS Commissioner John Koskinen says the agency he’s led since December is in peril.
“We don’t have enough employees anywhere,” he told the Center for Public Integrity when asked about its ability to regulate nonprofit groups. “I think the whole agency is at risk at the level of underfunding we have.”
‘Social welfare’ explained
“Social welfare” nonprofits, also known as 501(c)(4) organizations, today play a key role in many federal political elections.
But they began their existence as entirely different — and unassuming — kinds of creatures.
A federal law passed in 1913 created them as a "catch all" for nonprofit groups that weren’t necessarily educational or charitable but provided a public service and operated “exclusively for the promotion of social welfare.”
Thank a macaroni factory run by the nonprofit New York University Law School for their evolution.
Responding to business complaints about the arrangement, Congress in 1950 passed a law levying taxes on nonprofits’ “unrelated business income.” If nonprofits — 501(c)(3)s like hospitals, charities and universities and 501(c)(4)s — could run a side business, it meant they weren’t operating “exclusively” for their exempt purpose.
The U.S. Department of the Treasury, the IRS' parent agency, ultimately issued new regulations interpreting “exclusively” as “primarily.” In other words, social welfare nonprofits could engage in other kinds of activities so long as they operated primarily for the common good.
By 1981, the IRS further relaxed the rules by saying social welfare nonprofits could “carry on lawful political activities” as long as their work primarily benefited society’s welfare.
It wasn’t until the Supreme Court’s Citizens United v. Federal Election Commission decision in 2010, however, that politically active nonprofits — social welfare groups as well as 501(c)(5) labor unions and 501(c)(6) trade groups — became a major force in political elections, all while receiving a de facto tax subsidy.
The decision allowed corporations, unions and certain nonprofit groups to spend unlimited amounts of cash supporting or opposing political candidates so long as they didn’t coordinate with candidates or their committees.
Social welfare and other nonprofit groups galloped into the post-Citizens United era with an inherent advantage over overtly political groups: They could hide the source of their funding, regardless of whether those sources were corporations, individuals or other special interests. And they're only required tell the FEC the names of donors who give money to help produce specific ads — something that rarely happens.
Social welfare groups’ political spending, specifically, ballooned to $256 million during the 2012 election cycle from next to nothing only a few years before, according to the Center for Responsive Politics.
Aghast, watchdog groups and politicos filed numerous complaints with the IRS in hope the agency’s exempt organizations division would intervene, since it's supposed to ensure 501(c) nonprofit organizations don't become more political than the law allows.
Meanwhile at the FEC, efforts by the commission's three Democratic appointees to rein in the nonprofits were stymied by the three Republicans on the commission, who were ideologically opposed to stifling what they consider the free expression of political views.
Weeks turned to months and months into years, and the IRS showed few outward signs that nonprofit groups' politicking and electioneering was of any particular concern.
While IRS officials declined to say how many social welfare groups have been rejected for tax-exempt status on the grounds that they were too political, the Center for Public Integrity and other media organizations have identified 10 groups since the Citizens United decision.
Six were chapters of Emerge America, a group that trains Democratic women who want to run for office, and one engaged in politics abroad. Another — Arkansans for Common Sense — spent about $1 million during 2010 supporting the failed re-election bid of Democratic Sen. Blanche Lincoln.
At least several other groups had their tax-exempt status denied for benefiting private groups such as political parties instead of the common good.
'Always being second-guessed'
Nonprofit regulation is “the most explosive, difficult and challenging area of the IRS,” said Larry Gibbs, a former IRS commissioner who served under presidents Ronald Reagan and George H. W. Bush. “It touches on issues that every voter in the country not only can understand, but they’re also issues voters have very strong feelings about.”
Both the IRS and its nonprofit division are prone to criticism, IRS Exempt Organizations Director Tamera Ripperda told the Center for Public Integrity.
“We’re always being second-guessed,” she said, adding that the division is obligated to consider external feedback.
Most of the two dozen former and current IRS employees interviewed — spanning five decades at the agency — could recall moments the nonprofit regulation division succumbed to outside pressure by retreating from or killing proposed actions.
In part because of this pressure, and in part because of what it considered its limited resources, the exempt organizations division deprioritized full-blown examinations in favor of audits done by mail and bare-boned “reviews” done by phone.
The division's “assembly line approach to deal with the volume” of work likely led to shortcuts, like searching for questionably named groups, and contributed to the tea party debacle, said Jim Buttonow, who worked for the IRS for nearly two decades until 2006 and managed large investigations of nonprofits.
"What you end up doing is delegating and empowering people at the lowest levels,” he said.
In late 2002, to grapple with new priorities and a smaller workforce, the nonprofit division officially reassigned about 100 employees from its investigations unit to the area that processes applications for tax-exempt status, said Steve Miller, who led the division then, in a speech published in the trade journal Tax Analysts.
“Examination workforces have greatly diminished and hence the number of examinations we are able to do,” added Miller, who was fired as acting IRS commissioner in May 2013 amid questions about tea party targeting.
The nonprofit regulation division’s investigations of all nonprofits — politically active ones and otherwise — have fallen during recent decades and also the post-Citizens United years. For instance, the division audited fewer than seven tax returns per every 1,000 nonprofits last year. Early in Ronald Reagan's presidency, the IRS audited such groups at nearly four times that rate.
During the post-Citizens United years, audited returns fell from 11,449 in 2010 to 10,575 in 2013, agency records indicate. During the same time, applications for 501(c)(4) social welfare status jumped to 2,253 — up from 1,741 in 2010. The Citizens United decision made it easier for these groups to involve themselves in elections.
In addition, last year and this year, the nonprofit regulation division temporarily shifted some employees from investigative work to help process the backlog of nonprofit applications. The backlog is a major concern of Republicans and conservatives upset with the IRS.
“Everybody is all hands on deck” to tackle that problem, said Ripperda, who replaced Lois Lerner, a central figure in the tea party controversy.
It’s not that there’s a dearth of complaints about nonprofits. Eve Borenstein, a Minneapolis attorney, said she was told by Lerner a few years ago that there were tens of thousands of them.
The retreat on investigations gives nonprofit groups the impression they can bend the IRS’ rules, which may not be clear in the first place, Borenstein said.
When Borenstein advises her nonprofit clients against doing something that may violate IRS rules, she says they sometimes tell her: “There are six others who do that.”
Fewer resources, less enforcement
For an agency whose primary responsibility is to collect tax dollars, the IRS itself is receiving fewer and fewer of them from Congress.
The IRS’ approved budget for the 2014 fiscal year is $11.3 billion. That's $855 million, or 7 percent, less than its 2010 budget.
During the same period, the IRS lost more than 10,000 staff positions — an 11 percent reduction. Meanwhile, it collected 22 percent more in taxes through fiscal year 2011, an indication that its workload has increased.
Congress is proposing another $341 million cut to the agency’s budget for fiscal year 2015.
The Center for Public Integrity is still waiting for a response to a Freedom of Information Act request filed in December that seeks a variety of basic information about the IRS’ exempt organization operations, such as a staff position roster and enforcement actions against politically active nonprofits.
But interviews and IRS documents show the division has, of late, been hit particularly hard.
Since the Citizens United decision in 2010, the exempt organization division’s budget has shrunk 6 percent, from $101.2 million to $95.4 million during 2013.
Staffing in the division dropped more than 8 percent, from 900 in 2010 to 824 in 2013. Ninety-eight division employees left the IRS from Jan. 1, 2012 to May 17, 2014, according to a list of former employees obtained from the IRS through a FOIA request to the federal Office of Personnel Management.
Viewed over decades, the staffing declines become more pronounced.
For example, exempt organization division staffing decreased 14 percent from the early 1990s to last year.
Unlike other IRS divisions, the nonprofit regulation unit’s main job isn’t raising revenue by collecting taxes — making it an easy target in times of budget cuts.
The exempt organizations division has also faced several waves of retirements, thereby losing expertise and institutional knowledge, former employees there say.
The “brain drain” has been exacerbated since the early 2000s by the agency filling key roles with people with management know-how but lacking nonprofit regulation experience.
The budget for training exempt organizations staffers was also slashed from 2009 to 2013 — from more than $7 million to less than $500,000 thanks to "budget cuts and sequestration," records show.
The IRS has also recently decided, in a bid to save time and money, that it will no longer screen most applications for 501(c)(3) charitable status. Some IRS watchdogs worry politically motivated organizations will attempt to exploit this decision.
Scandal, then paralysis
Since the tea party dispute erupted, more than half a dozen key agency employees have left the agency. They include Miller, acting commissioner at the time, and Lois Lerner, director of the exempt organizations division.
The tea party affair has directed attention away from what many IRS workers say is the much larger problem — regulating the activities of politically charged nonprofits.
The issue is "too hot to handle" for Congress in part because members may benefit from the groups, said Alex Reid, a former U.S. Treasury fellow who was also a staffer for the Joint Committee on Taxation.
"Money in politics is such a divisive and politically sensitive issue that Congress hasn't been able to" do anything, he said. "It has fallen to the IRS …. It’s working to sweep up after the parade.”
Still, employees and retirees say the tea party brouhaha, triggered by the IRS delaying some conservative nonprofits' tax-exempt applications and asking them invasive questions based on their names, could have been averted.
Regulators, for example, could have denied exemptions on the grounds that some social welfare nonprofits appeared too political or they could have approved the groups and flagged some for future audits.
“It’s sort of ironic they got into trouble. She … should have denied the groups off the bat. But she kept them, kept looking at them, and the rest is history,” Streckfus said.
Miller and Lerner declined to comment on the record.
A current IRS exempt organization division attorney, who didn’t want to be identified for fear of losing his job, said denials were warranted in some cases.
“The groups were coming in saying, ‘No, we’re just trying to exercise free speech.’ But that doesn’t mean you should do that as a tax exempt organization,” he said. “We should have just let them go to court. A judge will tell us if we’re right or wrong.”
Gibbs, the former IRS commissioner appointed by Reagan who now works at the Miller & Chevalier law firm, echoed the sentiment, saying the social welfare designation isn’t intended for highly political nonprofits.
“No ma’am, it’s just not,” he said. “That’s why 527 was put in the code.”
Political “527 groups” are tax exempt like 501(c)(4) groups, but unlike them, they must disclose their donors.
U.S. Rep. Tony Cárdenas, D-Calif., said additional delays with applications can be blamed on congressional hearings that began in earnest during 2013.
"When you see employees of the federal government getting badgered by members of Congress … that’s got to have a really detrimental effect on the psyche of any worker [who is] thinking, 'Wow, if I take action or not, I might be called in front of Congress and I might be badgered like that in front of the whole country.'"
Groups like the Richmond Tea Party, one of 41 conservative groups suing the IRS, was not denied tax-exempt status. But delays and extra paperwork cost it time and money.
Organizations can initially operate as tax-exempt social welfare nonprofits without receiving formal approval from the IRS.
But Bruce Jaggard, chairman of the board of the Richmond Tea Party, said it took the agency two-and-a-half years, until July 2012, to approve his group’s application to be a social welfare group in part because it sent the group two more rounds of questions in addition to those asked in the application.
“If you have to do something two and three times, there’s no question you’re going to get into a backlog,” Jaggard said. “Our application we had sent to them was complete with all the information they requested. So make a determination, a thumbs up or thumbs down. They made work for us, and they made work for themselves.”
That, he added, is reason enough to believe the agency doesn’t need more money.
Republican congressional members leading efforts to investigate the IRS said the only inappropriate pressure exerted on the agency was by President Barack Obama and Senate Democrats, who repeatedly criticized political spending by social welfare nonprofits.
IRS employees “were intimidated by their own [colleagues’] politics,” said Rep. Darrell Issa, R-Calif., chairman of the U.S. House Committee on Oversight & Government Reform.
“If they think congressional oversight is intimidation, well, they have more coming,” Boustany said.
In addition to the political pressure, the rules regarding activities of nonprofits aren’t very clear.
“I can’t blame [social welfare nonprofits] because the law was not clear on what is political activity and how much is allowed,” said Marv Friedlander, a 41-year veteran of the IRS who retired in 2009 as chief of the exempt organization division’s technical branch.
Without easy-to-understand rules, regulators’ jobs became harder, and “they were stuck,” Friedlander said.
Late last year, the IRS attempted to tackle the unclear rules by defining “political activity” for social welfare groups. But it scrapped the proposal earlier this year after receiving about 169,000 comments — many critical.
Members of Congress from both sides of the aisle criticized the rules, noted Rep. Elijah Cummings, D-Md.
“At some point, we have to let people do their jobs,” he said of IRS exempt organizations division employees.
Koskinen, the new IRS commissioner, said the IRS is working on new rules that will not only create a definition, but say how much political activity is allowed.
“We’d be much better off if we had clearer definitions and a clearer roadmap,” he said.
The IRS' new proposal isn’t expected until early next year — after the mid-term elections — at which point the IRS will hold hearings and ask for more public comments.
‘Dark money’ proliferates
Nonprofits have spent $26 million on 2014 elections as of July 2 — more than double what they had spent at this point in the 2012 election cycle, a presidential election year, according to data from the Center for Responsive Politics.
Millions of dollars more have been spent by social welfare nonprofits on politically charged "issue ads" that don't directly advocate for or against candidates, and therefore, aren't reported to the FEC.
Said Robert Maguire, a political nonprofit investigator at the Center for Responsive Politics: “The amount of 'dark money' this cycle will far eclipse what we saw in the last midterms and probably even the totals we saw in the last presidential elections.”
Meanwhile, the exempt organizations division is in limbo, and employees fear doing anything controversial as congressional hearings into the tea party issue continue.
“While we have a duty to oversee, it can very well have a chilling effect,” Cummings said.
As part of a reorganization of the nonprofit regulation division, about 45 employees will be shifted to the chief counsel’s office, IRS spokesman Grant Williams said.
There are no guarantees the attorneys being moved will continue working exclusively on nonprofit issues, Ripperda, the exempt organizations director, said in a recent interview. “The counsel is still in the process of structuring that. We don’t know that yet.”
The changes will happen by year-end.
What’s clear is that written opinions on nonprofit regulation issues will now be drafted by the IRS chief counsel, a political appointee.
“If you wanted to take politics out of the thing, you just put the politics in there completely,” said Debra Kawecki, a former senior attorney for the nonprofit regulation division.
Marc Owens, the exempt organizations division director from 1990 to 2000, put it this way: “They are setting the stage for an even more cataclysmic situation.”
With the reorganization under way, congressional scrutiny continuing and pressure to do more work with fewer resources, employees say morale is at an all-time low.
“We spend all our time processing applications, doing some auditing, and nothing is left over,” said a current IRS exempt organizations employee familiar with this work.
Kawecki, who left seven years ago, said even then the Cincinnati office, which processes most of the applications, was overwhelmed trying to keep pace: “The last year when I was there, we took cases from them and did them in the national office [in D.C.] because they were just swamped.”
Commissioner bites back
Some employees are encouraged by Koskinen, a turnaround expert with experience in the private and public sectors who has shown himself to be a bulldog at times.
At a recent hearing in which members of Congress grilled him about the tea party scandal, with one accusing him of lying under oath, Koskinen stood firm. He refused to apologize when asked and corrected his questioners on several occasions when he believed they were making misleading statements.
In addition to his recent announcement of bigger plans for the IRS’ new rules on political activity for social welfare groups, he has said the agency recently restarted audits of social welfare groups that were suspended last year — despite the heat it’s getting from Congress about the issue.
“We tend to look at it a lot from the political side. The real question is also what are your social welfare activities? Primarily, are all your activities, are they social welfare? So we will look at that as well as the other side of the coin,” Koskinen said in an interview.
IRS officials declined to comment on the record beyond what Koskinen said, citing several reasons: regulations the agency is drafting on nonprofit political activity, lawsuits filed against the agency and ongoing investigations by congressional committees, the Department of Justice and the U.S. Treasury's inspector general.
"Accordingly, it is inappropriate for the IRS to comment at this time on these matters," IRS spokesman Bruce Friedland said.
The U.S. Treasury provided a brief statement that in part reads: "The IRS and Treasury work together to implement the tax code in a manner that is effective and fair." The White House did not respond to requests for comment.
Meanwhile, others worry Congress won’t budge on funding and won’t let the IRS do its job.
“Congress has made it clear that nobody is to stick their neck out” to regulate nonprofit political activity, said Cheryl Chasin, who retired from the IRS about three years ago and whose email on politicized social welfare groups was referenced in a congressional report.
A recent IRS manager familiar with exempt organization issues places the blame squarely on Congress.
“It’s them. They write the rules. … They have ruined people’s lives,” said the former employee, who asked not to be identified for fear of reprisal. “If this is what happens [when you regulate,] who is going to ever want to do it?”
For its part, Crossroads GPS has spent tens of millions of dollars on political candidate advertisements since its inception, although none yet in 2014. Dozens of other 501(c)(4) nonprofit groups also are spending big on candidate advocacy. The IRS largely remains idle.
Crossroads GPS maintains its activities comply with federal law, and that its primary purpose isn’t political. Representatives from the organization did not return requests for comment.
With no foreseeable action by regulators, the nonprofit spending trend is expected to continue into the midterm elections this fall unabated, and the donors to these groups still largely a mystery.
Lewis DVorkin performed a miracle with Forbes … almost. He almost rescued a dying brand, almost helped get it sold to a new owner, and almost rescued the Forbes family and its no-doubt-regretful investor Elevation Partners. I respect Lewis’ inventiveness and innovation. He has done the best he could with the brand he had.
But there’s only so much that can be done urgently with old media on the descent. As Steve Forbes himself said announcing the sale of a majority stake in his company to a group of Asian private-equity investors and cataloguing how his business used to be run: “The web has made this way of doing things obsolete.”
The Times, quoting unnamed sources, says the deal values Forbes at $475 million, but the Financial Times’ John Gapper properly asks:
I'd like to see proof that this deal valued Forbes Media at $475m http://t.co/MLkUgHSMWo
— John Gapper (@johngapper) July 18, 2014
Axel Springer, a leading European magazine publisher and digital company, was supposed to be interested in Forbes. But it and other media buyers dropped out early. Forbes had reportedly been hoping to sell the entire company for more than $400 million. That didn’t happen. Whatever the real valuation, given the buy-out of Elevation Partners — which had invested in Forbes in 2006 getting a reported 40% for $250-300 million, valuing the company then at under $750 million — and given the large chunk that Forbes is left with, I’d guess the family got something in the borderline nine figures. [I should add that as one commenter elsewhere points out, I'm not even trying to make a guess at such things as liquidation preferences for Elevation.] Not a deliriously happy ending for the Capitalist Tool, but — as people told me this week when I complained about turning 60 — it beats the alternative.
When DVorkin returned to Forbes in 2010, where he had been executive editor a decade before, with the purchase of his startup True/Slant, he brought with him what looked like a solution for a dying brand: He used that brand as candy to draw more than a thousand contributors to write mostly for free — the top few traffic attractors can make a decent buck — adding onto the work of a few score Forbes staff journalists. Thus he simultaneously exploded the quantity of content Forbes could serve while reducing the total cost of content to nearly nil. Now I’m all for media opening up to more voices, but let us acknowledge that not only the price but also the overall quality of Forbes content declined.
At the same time, the business side, headed by Mike Perlis, used that dying Forbes brand as candy for advertisers: Come appear on Forbes.com with your own pieces labeled “Brand Voice.”
I’ve long said that if you have to put a link next to a label saying “what’s this?” then the label clearly isn’t clear enough. This was a pioneering entry into the the so-called native advertising that is now overtaking media everywhere. Just as it was supposed to be the salvation of Forbes it is now supposed to save legacy media.
Beware the silver bullet. It can backfire.
The problem in the end for Forbes, I believe, is that the brand became even more devalued. I illustrate this very simply: Now, when I see a link to Forbes on Twitter, I don’t know whether it is going to take me to (1) the good work of a Forbes journalists, (2) the good work of a Forbes contributor, (3) the bad work of one of many Forbes contributors, or (4) the paid and wordy shilling of a Forbes advertiser, e.g.:
[Forbes] Korea's Entrepreneurs Garner Global Validation As Local 'Startup' Valuations Soar Into The Billions http://t.co/azshQ00GSZ
— BN3WS (@BN3WS) July 18, 2014
Thus, I hesitate three beats before clicking on a Forbes link. That is the definition of a devalued media brand. And that is precisely what other media companies should fear as they more and more try to fool their readers into thinking that what we used to call advertising is now something else that can comfortably live under brands, enigmatically labeled.
The real lesson of Forbes is that there are no easy answers and quick solutions for transforming legacy media companies. DVorkin became a key tourist attraction for media executives touring New York. I know because I took many of them to meet Lewis. He generously shared his means and methods. But I also told these executives that the path was not without the peril I just described.
Media executives are looking for quick fixes still.
Tablets were going to save them, returning to them the control of user experience and business model the link had taken from them. Hearst Magazines has had some success with tablets. But salvation does not this way lie.
Pay walls were going to save them, finally recognizing the value of their content online. But as Gannett has learned, after grabbing cash flow the first year, growth stops. No Moshiach there.
Ad marketplaces were going to save them — or at least let them compete with Google. But programmatic advertising — those ads that follow you all around the web telling you to buy that kayak you looked at once on Amazon — commodify media. They value direct data about a customer over the context media provides — that is, it’s better to show a kayak ad to a kayak buyer than to buy an ad next to a kayak story. This is why I argue in the start of a white paper I’m finishing now that we must shift to a business based on known relationships with people as individuals and communities rather than as a mass.
Shifting to a relationship and service strategy over a pure content strategy will take not only urgency but also time, with much experimentation and failure and a need for patient capital — likely not the Hong-Kong-based private-equity investors Forbes now has, not the hedge funds that Digital First Media has, not the public owners that Gannett and Time Inc. have. This won’t be easy.
I’m not saying that DVorkin and Perlis ever thought that what they were doing was easy. But others did. They hoped that Forbes would show the way to a solution for all their problems. Well, so much for that. That way lies the skin of your teeth.
Editor and writer still held after more than 100 days in detention Bheki Makhubu, the editor of the political monthly The Nation, and Thulani Maseko, a human rights lawyer who writes for the magazine, were found guilty of contempt of court yesterday for articles critical of the judge who issued yesterday's verdict.
Reporters Without Borders condemns this shockingly unfair decision in Africa's last monarchy by a judicial system that claims to be independent but is not.
No sentence has so far been passed on Makhubu and Maseko and it is unclear what it might be. The two men have already spent more than 100 days in detention since their second arrest in April. According to some legal experts, the maximum sentence for this offense is between 30 and 90 days.
According to a human rights lawyer interviewed by the South African paper Mail & Guardian, there are suspicions that a verdict of three years had been fixed from the beginning. Some witnesses say they have seen the Minister for Justice and Constitutional Affairs leave judge Simelane's chambers right before the verdict.
But, as one local media activist said, “application of the law is far from fully guaranteed here.”
“This conviction is completely absurd,” said Cléa Kahn-Sriber, the head of the Reporters Without Borders Africa desk. “Makhubu and Maseko have been convicted of criticizing irregularities in the judicial system by a man who is plaintiff and judge at the same time.
“The way these proceedings have been conducted is proof of the accuracy of the articles for which they have been convicted. This is clearly a political verdict designed to gag Swaziland's only independent publication. It will also send a chilling message to all other Swazi journalists. We call on the authorities to end this judicial farce and to drop the charges against Makhubu and Maseko.” Makhubu and Maseko were first arrested on 8 March on the orders of Chief Justice Michael Ramodibedi, who was named in one of the critical articles, published in February and March.
Another judge, Mumcy Dlamini, released them on 7 April on the grounds that their arrest warrant was illegal. But Mpendulo Simelane, a judge who had also been named in the articles, returned them to jail the next day.
In his ruling, Judge Simelane said freedom of expression was not an absolute right in Swaziland, which is ranked 156th out of 180 countries in the 2014 Reporters Without Borders press freedom index.
Court orders well-known reporter held for four more months
Reporters Without Borders is outraged to learn that a Baku court extended journalist Rauf Mirkadyrov's pre-trial detention for another four months on 15 July at the prosecutor-general's request.
A well-known correspondent for the independent Russian-language newspaper Zerkalo, Mirkadyrov has been held since 18 April on a charge of high treason. In reality, he is one of the latest victims of the government's campaign to stamp out all criticism
“By keeping Mirkadyrov in detention, the politicized judicial system is showing that it is bent on persecuting him,” said Johann Bihr, the head of the Reporters Without Borders Eastern Europe and Central Asia desk. “His only crime is an independent attitude. We again call on the authorities to drop the charges and free him at once.”
The prosecutor-general said there was a danger Mirkadyrov would try to flee if granted a conditional release. Mirkadyrov responded that, when released for three days at the end of May to attend his father's funeral, he neither tried to escape nor violate the confidentiality of the judicial investigation.
The court rejected his request to take account of his mother's poor health and allow him to stay with her.
Mirkadyrov's last position with Zerkalo was its correspondent in Ankara, where the Turkish authorities arrested him on 18 April and immediately extradited him back to Baku. The Azerbaijani authorities arrested him on arrival on a trumped-up charge of spying for Armenia.
One of Zerkalo's leading writers for many years, he is known for being critical not only of the Azerbaijani government but also the Turkish and Russian ones. Zerkalo was forced to suspend publishing in May after being economically throttled.
Azerbaijan is ranked 160th out of 180 countries in the 2014 Reporters Without Borders press freedom index.
Read our previous statements on this case:
- Deprived of income, Azerbaijani paper is forced to stop publishing (20.06.2014)
- Well-known journalist arrested on spying charge after deportation (22.04.2014)
Child legal advocates are worried some Central American kids turning themselves in at the border could be returned to peril if Congress amends laws to speed up their repatriation to home countries.
Changes that President Obama may seek in anti-trafficking laws — which were developed in recent years with bipartisan support — could give U.S. Border Patrol agents authority to “screen” these children to assess if they have a legitimate “credible fear” of being sent back to countries with high murder rates and rampant gang violence.
Border Patrol agents’ ability to interview children and fairly assess if they face danger if returned to home countries has been criticized, as the Center for Public Integrity reported in July 2011.
Currently, detained Central American minors are supposed to be transferred to non-law-enforcement officials’ custody and shelters where they have access to legal advisers and trauma specialists who are trained to assess their histories and explain legal options to them in language minors can grasp.
Under changes being contemplated, kids could instead be put on a path to repatriation before they get a chance to talk to Spanish-speaking child-welfare specialists and fully understand that they have a right to appear before an immigration judge.
Agents could assume a decisive role in assessing if kids are truly in need of refuge — and then begin proceedings to send them back, a prospect that worries advocates. If kids can’t talk to official government asylum officers or immigration judges, “they’re not going to get access to even ask for asylum,” said Jennifer Podkul, senior program officer for migrant rights and justice at the Women's Refugee Commission in Washington, D.C.
The White House has not yet provided details of legal initiatives it might pursue to speed up the return of minors arriving on the border to their home countries. The administration plans to ask for “greater discretion” for the Department of Homeland Security to repatriate Central American minors more quickly, according to a letter President Obama wrote to congressional leaders.
But multiple advocates believe giving agents more authority to interview Central American minors and make critical decisions about what to do with them is a strong possibility, given what some government officials have disclosed in talks with advocates who subsequently spoke with media this week.
In December 2001, a U.S. Government Accountability Office report found that Border Patrol agents lacked required basic training in “immigration fundamentals” and law.
As the Center’s 2011 report explained, a Mexican boy who was being used as a “mule” to carry drugs several years ago sought out and turned himself in to Border Patrol agents. He asked agents to let him stay so he could escape from a crime ring that his uncle was involved in. Agents told the boy to go back to Mexico to get more information on traffickers and then seek refuge, the boy eventually told Podkul, who was a pro bono immigration lawyer at the time.
The boy turned himself into agents multiple times before they took him into custody and transferred him to a shelter in Virginia, where he happened to meet Podkul and was interviewed by asylum officials and Homeland Security investigators.
Children have no right to the appointment of a lawyer in immigration proceedings and rely on pro bono aid.
In another case, Mexican teen girls who had been caught and repatriated multiple times were later discovered after police broke up a sex-trafficking ring in North Carolina, Maryland and New Jersey in 2007. Some of the girls were caught at the border prior to 2007, Podkul said, but Border Patrol agents failed to discover that the girls were being trafficked by men who were traveling with the teens.
Podkul represented some of the girls after the ring was broken up. She said the men smuggled the girls into the United States with promises of jobs and then forced them into acts of prostitution.
Currently, Mexican and non-Mexican unaccompanied minors detained while entering the United States are treated differently in some ways under the Homeland Security Act of 2002 and the federal Trafficking Victims Protection Act of 2000, which has been reauthorized and amended since that time to enhance protections for minors.
Federal law requires that within 72 hours after agents detain children of any nationality, the minors be transferred to the custody of the U.S. Department of Health and Human Services, whose Office of Refugee Resettlement supervises shelters for kids. That’s where many kids get briefed on rights and social workers have a chance to meet them.
Mexican children, however, haven’t been transferred nearly as frequently to these shelters as other kids because it is much easier to arrange their repatriation over the U.S.-Mexico border within 72 hours.
But as a protective measure — because of reports that Mexican kids were being sent back to danger — the anti-trafficking law was amended in 2008 to require that Border Patrol agents conduct a minimum screening of Mexican (or Canadian) minors in their custody.
The mandatory screening requires agents tell Mexican kids about their right to be transferred to a shelter and the right to appear before an immigration judge. Agents are also supposed to ask questions designed to help them decide if a child is likely the victim of traffickers or if they seem afraid to be sent back.
Because it means they can get out of detention relatively quickly, Mexican kids often consent to being returned at the nearest port of entry and give up that right to appear before a judge. However, as violence in Mexico has increased, more kids—like the boy in the Center story—have begun to express fear of being returned.
A 2011 report by Appleseed, a Texas-based public-interest law group, also documented cases of Mexican kids released back into dangerous circumstances even after these screenings.
To cope with the current flood of Central American kids, Podkul and other advocates say, Obama may suggest that Congress amend laws so that Border Patrol agents can treat the Central American kids more like Mexican kids.
Rep. Lucille Roybal-Allard, a Los Angeles Democrat, has had legislation pending since 2011 that would require licensed social workers to assist Border Patrol agents in screenings of some migrant kids. The proposed Child Trafficking Victims Protection Act, has one Republican co-sponsor, Rep. Ileana Ros-Lehtinen of Florida.
This week, Roybal-Allard released a statement supporting Obama’s request that Congress allocate more than $2 billion to address the emergency at the border and what to do about unaccompanied minors. But she also expressed concern about relaxing any existing access that migrant children now have to consult with social workers and lawyers. She said: “We in Congress should be extremely cautious that we do not undermine the basic protections migrant children have under current law.”
How CNN and Cisco made a web series about progressive cities that’s a mixture of editorial and branded content.
CNN Digital Studios, is working with Cisco to present City of Tomorrow, a 10-part online series that explores ways different cities are trying to improve their citizens’ lives. A 30-minute special, also called City of Tomorrow, will air on CNN on July 19.
Two of the biggest trends in news today: the rise of mobile and the rise of data visualization.
The unfortunate reality is that they’re often in conflict. Too many beautiful data visualizations are designed with a big desktop browser window in mind, not the smaller screen of an iPhone or an Android phone. Text becomes unreadable, interactions become untappable, and a lovely experience becomes unusable.
If you want to do better, check out MobileVis, a site built by Bocoup data viz whiz Irene Ros to assemble good examples of data visualizations that work well on mobile devices. (It’s funded by a Knight Prototype Fund grant.) There are lots of screenshots, illustrations of pages in motion, and notes about what makes them compelling. Ros also pulls out a set of best practices for doing visualizations for mobile:
Vertical Bar Charts: When using bar charts in portrait mode, stack your bar chart bars vertically.
Use Vertical Scrolling: When creating interfaces that don’t fit in their entirety on the screen, enable vertical scrolling instead of horizontal scrolling.
Stack Table Cells: When needing to display tables that have more than a couple of columns consider stacking cells vertically within each row.
Carousel Instead of Tabs: When allowing users to switch between different displays, instead of using tabs (which require a lot of horizontal space,) consider using a carousel with next and previous buttons.
Fix Tooltips to Area of Screen: When displaying information on touch, designate an area on screen that will update accordingly.
Use Touch Zones: When displaying a lot of data points that are hoverable/touchable, consider using defined touch zones instead.
Over the past year, CIR has co-produced three pilot episodes of the series with PRX, focusing on new investigations into subjects like poor drinking water standards and the pathway for heroin from Juarez to Chicago. Along with the Peabody, those proofs of concept were enough to win support for the show from NPR stations and help secure $3.5 million in grants to help produce the show for several years.
The money, a combination of $3 million from the Reva and David Logan Foundation, and $500,000 from the Ford Foundation, will go towards staffing up and taking Reveal to a full series launching in January 2015. The goal, according to CIR executive director Robert Rosenthal, is for Reveal to become a weekly investigative show, available on public radio or as a podcast. “Each of the pilots showed there is an appetite in public media for this,” Rosenthal said.
But turning Reveal into the public radio version of Frontline could be a challenge. Any reporter or editor will tell you that investigative stories take time. Producing such a show weekly is ambitious, and Rosenthal said they recognize they won’t be able to meet a weekly pace overnight. “We’ve got to ramp up our own metabolism,” he said. “If it’s weekly or every other week, it’s going to be a change for us. And important change and a good one that helps us get control of our own distribution.”
Ever since its founding in 1977, the Center for Investigative Reporting has looked for partners to help spread its journalism to the widest possible audience, often appearing in print, on TV or radio, and across the web. Reveal was no different; in the second episode, CIR collaborated with WBEZ and the Chicago Reader on the heroin investigation. For a story on arsenic-laden drinking water in the third episode, they partnered with the Center for Public Integrity.
Working in tandem with other newsrooms will be an important step in producing the show on a regular basis. Joaquin Alvarado, CEO of CIR, said the pilots were designed to see how collaborative reporting would work in producing a radio show. The show is produced by Susanne Reber and Ben Adair, and hosted by Al Letson, who also hosts the show State of the Re:Union. Where the first pilot only featured reporting from CIR, the subsequent shows were produced with stories from other outlets. A combination of both will be key to producing the show consistently, Alvarado said.
“We have this goal as an organization to articulate a voice for investigative reporting and bring to audiences a lot of the great investigative reporting being done around the country,” Alvarado said.
Jim Morris, managing editor for environment coverage at the Center for Public Integrity, said their distribution strategy mirrors CIR’s in that both look regularly for collaborators. “It just gets our work out there to a much broader audience, and a different audience,” he said.
In this case, reporter David Heath had already done preliminary work on his story looking at the EPA’s response to arsenic levels in drinking water when the two organizations decided to team up. While CPI has worked on stories with NPR and individual stations before, Morris said this process was different because Heath was the lead correspondent for radio. That meant learning a new set of skills in addition to the usual reporting process, which Morris said took around three months. “It’s a different thing to produce a 15-minute radio piece than a 4,000-word print piece,” Morris said.
A full-fledged radio show will provide CIR and its partners a more persistent channel for their work than one-off radio pieces. But getting the show on the air will require not just interest from stations, but flexibility in their programming schedule. The first two Reveal pilots aired on 150 stations nationwide, according to Alvarado.
John Barth, managing director of PRX, said the pilots aired on stations in the top 30 to 50 radio markets, which he takes as a good sign for the future. PRX co-produces Reveal, bringing its audio expertise, but also is the show’s distributor, helping to get it on the air. One reason Barth thinks the show will get picked up by more stations is because programmers want a full series they can give a regular home on their schedule, not a handful of one-offs with no promise for the future.
PRX and CIR are interested in programs that can match radio storytelling with longform investigations, Barth said, and he thinks stations are interested too. “I think we both recognize there was a need for more regular investigative reporting in public media,” he said.
Barth, who was a founding producer on Marketplace, said launching a new public media show takes time — to find distribution, to build an audience, and to develop into the show you want. “The challenge is broad,” Barth said. “Making sure you can amass talent on a regular basis to deliver this…investigative reporting doesn’t happen on any kind of regular schedule.”
Of course, the other challenge will be financial. While the new grant funding will be important in launching the show, Alvarado said they’ll be looking at underwriting, events, and other fundraising to support the show on a long-term basis. Alvarado is optimistic about the prospects for funding and building community around the show. “When you start to engage around harder reporting, people really want to talk about solutions,” he said. “They want to have a regular platform to followup and talk about it.”
Police and demonstrators attacked a total of 38 Brazilian and foreign journalists during the FIFA World Cup in Brazil from 12 June to 13 July – a competition used by Reporters Without Borders as a peg for a campaign to draw abuses against journalists to the attention of governments and the international community.
The highest daily figure was registered on the day of the final in Rio de Janeiro on 13 July, with 15 attacks on journalists covering protests against the World Cup and FIFA.
The victims included Canadian freelance photographer Jason O'Hara, who was kicked in the face by military police after being thrown to the ground while filming a protest. Reuters photographer Ana Carolina Fernandes was the victim of a teargas attack. Felipe Peçanha of Mídia Ninja, an independent news website, was one of several bloggers and netizens roughed up by police during the same protest.
“We urge the authorities to ensure that the acts of violence against journalists by members of the military police do not go unpunished,” said Camille Soulier, the head of the Reporters Without Borders Americas desk. “Despite the government's promises, journalists cannot always count on the state protection they are supposed to receive under a national protective mechanism.”
At a meeting in the presidential palace in Brasilia last week, presidential aides told Reporters Without Borders secretary-general Christophe Deloire that the military police are trained in how to handle peaceful demonstrations. However, the government does not have direct control over the military police, they said.
The aides also told Reporters Without Borders that an entity is being created to monitor violence against journalists but does not as yet have any staff.
According to the Brazilian Association of Investigative Journalists (ABRAJI), 120 cases of abusive treatment of professional and non-professional journalists were reported by media and unions during more than a year of street protests against government spending resulting from the World Cup.
These 120 cases, 38 of which occurred during the World Cup itself, included insults, threats, robbery of equipment, arbitrary arrests and physical attacks.
One of the worst cases came on the first day of the tournament, on 12 June, when military police arrested Mídia Ninja journalist Karinny de Magalhães during a demonstration in Belo Horizonte, and subjected her to several hours of verbal, physical and sexual aggression until she lost consciousness.
Bandeirantes TV cameraman Santiago Ilídio Andrade was fatally injured by an explosive device while covering a protest in Rio de Janeiro on 6 February.
Ranked 111th out of 180 countries in the Reporters Without Borders press freedom index, Brazil is Latin America's second deadliest country for the media, with 15 journalists killed in connection with their work in the past for years.
This week’s essential reads: The key pieces to read this week are David Carr and Ken Doctor on what’s behind the push for big media mergers, John Borthwick on clickbait, sharing, and attention, and David Boardman’s warning to newspaper executives.
Murdoch’s play for Time Warner: Rupert Murdoch’s latest in a long history of big media takeover bids was revealed this when The New York Times reported that his 21st Century Fox made an $80 billion offer for Time Warner that was rejected last month. 21st Century Fox, the entertainment media properties of the former News Corp (Murdoch’s news properties now make up News Corp), would be buying an entertainment company that includes Warner Bros. movies, Turner, and HBO, now shorn of its cable/broadband business and publishing business (which have split off as Time Warner Cable and Time Inc., respectively).
Mashable’s Andy Fixmer, Quartz’s John McDuling, and Bloomberg’s Erik Schatzker and Caitlin McCabe all said HBO is at the center of Fox’s pursuit of Time Warner; it would give Fox one of the world’s premier content properties and, through HBO Go, a major tool to compete with Netflix in the growing streaming video market. Bloomberg said Fox values HBO at $20 billion — a quarter of its total offer for Time Warner. Business Insider’s Jay Yarow argued that Fox’s interest is a bit broader: It wants to gobble up as many valuable TV properties as it can to improve its leverage with TV distributors. At Reuters, however, Jack Shafer was skeptical of the value of the deal for Murdoch, comparing it to the protectionist consolidation of publishers in the 1990s.
Slate’s Jordan Weissmann said the deal may be as simple as Fox digging deeper into a still very profitable business (TV), and asserted that if Murdoch wants Time Warner, he’ll eventually get it. Ad Age’s Simon Dumenco also made that point, declaring Murdoch “untouchable and unstoppable.” USA Today’s Rem Rieder marveled at how Murdoch is bouncing back from News Corp’s phone-hacking scandal. Still, Business Insider’s Hunter Walker noted that antitrust regulators could stand in the way of a potential deal, and The Wall Street Journal’s Keach Hagey looked at what a sale might mean for the Time Warner property CNN, which would be left out of the deal as an antitrust concession.
Whether it’s to Fox or to someone else, Peter Lauria of BuzzFeed argued that Time Warner will sell eventually, since it likely represents the best value for its shareholders at this point. Capital New York’s Alex Weprin broke down several of the other potential buyers, and Peter Kafka of Recode said it will be bought by a company that wants to make a big bet on the pay TV business. The New York Times’ Jonathan Mahler and Emily Steel analyzed the turnaround at Time Warner that’s made the company so attractive.
RELATED ARTICLEThe newsonomics of the new quest for big, big, bigJuly 16, 2014The New York Times’ David Carr and the Lab’s Ken Doctor both explained the climate of ever-bigger mergers and consolidations that has begun to swirl again around the media industry. They pointed to a couple of major rationales for these defensive moves — size yields negotiating power, and if you can’t beat ’em, buy ’em — and noted that regulators don’t seem to be a big obstacle: “For the most part, the current government has passed on regulating potential monopolies, and as citizens, we have become inured to the consequences of bigness,” Carr wrote.
Finally, USA Today’s Michael Wolff and Financial Review’s Neil Chenoweth looked at two behind-the-scenes players on each side who are helping engineer this possible deal: Time Warner’s Gary Ginsberg, in Wolff’s piece, and Fox’s Chase Carey, in Chenoweth’s.
Going beyond clickbait and its backlash: “Clickbait” has been one of this summer’s ongoing topics of discussion in the media world, and The Daily Beast’s Emily Shire examined the anti-clickbait movement — exemplified by The Onion’s Clickhole and Twitter accounts like @SavedYouAClick — as evidence that people are getting wise to the premise of duping and manipulating readers through unnecessarily coy headlines. Vox’s Nilay Patel said clickbait headlines still work (most of the time) because they’re essentially games for the reader to play, and Poynter’s Andrew Beaujon posited that the main problem with clickbait is not the headlines, but the disappointing content that goes with them. “And yet,” he said, “the blame often falls more heavily on marketing than the people churning out stuff that sucks.”
Betaworks CEO John Borthwick provided some data on the connection between attention and sharing that’s the foundation of most clickbait’s popularity, and found that there are many readers who spend very little time on pages after clicking but share the article anyway, sharing essentially based on the headline alone. But beyond those headline-sharers and the people who read on and are disappointed with the content, there are also a significant number of people who spend substantial time reading an article and are also quite likely to share it. Borthwick urged publishers to spend more time attracting those kinds of readers, and Gigaom’s Mathew Ingram described Borthwick’s findings as two versions of the online world: one noisy, fast, and click-driven; and the other deeper, slower, less noticeable, but still widely read and shared.
One of the most prominent sites built around the former model, Upworthy, reported late last week that by far their most viewed, shared, and closely read pieces are not their own editorial content, but their native ads. At Contently, Joe Lazauskas gave a few reasons for Upworthy’s remarkable success with native ads: It likely pays to relentlessly promote those ads on social networks, and the type of blandly feel-good content that makes for the best ads is exactly the same type of content Upworthy’s already producing in its editorial content.
Was SI scooping or suckered?: Sports Illustrated scored the biggest breaking sports news story of the year last Friday when it ran a first-person piece by NBA star LeBron James revealing that he would re-sign with his hometown team, the Cleveland Cavaliers. The essay was written as an as-told-to piece with veteran SI journalist Lee Jenkins. Deadspin, The Wall Street Journal, and the Cleveland Plain Dealer all provided some details about how the story came about: Jenkins got wind of James’ decision on Thursday, pitched a first-person piece to his editors at SI, interviewed James and wrote the piece Thursday night, and handed it off to his editors on Friday. Deadspin reported that the idea for a first-person essay was first proposed by James’ camp, but The New York Times reported that it came from Jenkins.
The Times’ Richard Sandomir criticized SI’s strategy, saying the magazine gave up an opportunity to put some journalistic weight behind a big story. Said Sandomir: “the approach cast Sports Illustrated more as a public-relations ally of James than as the strong journalistic standard-bearer it has been for decades.” In an online chat, The Washington Post’s Gene Weingarten echoed the point, calling it an example of a journalistic mindset in which “being first is overvalued and being good is too often beside the point, or financially imprudent.”
Craig Calcaterra of NBC Sports questioned what exactly Sandomir was expecting SI to add to the story, characterizing it as commodity news as opposed to a substantial story crying out for in-depth reporting. Sandomir, he said, is “fetishizing the business of Serious Journalism at the expense of understanding what sports fans actually care about, appreciating how informed sports fans already are and asserting that the reporter’s highest and best function is to get between fans and the news as opposed to delivering it to them.” Poynter’s Sam Kirkland said it’s still possible for SI to break the story this way and do deeper journalism on it as well. (Jenkins was in Cleveland this week reporting a feature on James’ decision.) And Deadspin’s Kevin Draper looked at the other reporters who scrambled to get this scoop.
Reading roundup: A few other pieces to read from this week:
— Industry analyst Alan Mutter pulled together some simple numbers to remind us just how dire the newspaper industry’s situation is, and Temple University’s David Boardman criticized the Newspaper Association of America’s Carolyn Little’s rosy speech and instead urged newspapers to drop to one day a week in print. Little issued a defense of her picture of the industry.
— The U.S. Federal Communications Commission’s public comment period on its proposed “fast lane” plans for Internet providers was supposed to end on Tuesday, but it was postponed until today because a surge of comments from net neutrality supporters overwhelmed its system. (The FCC passed 1 million comments this week.) The Washington Post’s Brian Fung explained the proposal and backlash, and at The Guardian, Dan Gillmor urged net neutrality advocates to make their voices heard.
— Capital New York’s Joe Pompeo profiled the new Philadelphia-based online local journalism initiative by Washington Post/TBD/Digital First veteran Jim Brady, Brother.ly, and Brady talked with Poynter’s Butch Ward about what he’s learned about local news.
— Finally, Nebraska professor Matt Waite wrote a thoughtful and important piece on the value of doubt in data journalism, with some ideas on how to better incorporate it.
Photo of Time Warner Center by AP/Diane Bondareff. Photo of bait shop by protoflux used under a Creative Commons license.