OPINION: MEDIA PR - Drop masters exposed in broadsheet skirmish The tradition of ’dropping’ financial news to the media has come under fire as undermining the authority of the media and reducing it to a branch of PR.

The allegations made by former Sunday Telegraph deputy City editor Patrick Weever, who accused the paper’s City pages of being ’an offshoot of the PR industry’ have placed the dubious tradition of the Friday night drop back in the spotlight.

The allegations made by former Sunday Telegraph deputy City editor

Patrick Weever, who accused the paper’s City pages of being ’an offshoot

of the PR industry’ have placed the dubious tradition of the Friday

night drop back in the spotlight.



Weever made the claims at an employment tribunal last week. Although he

lost his case of constructive dismissal from the paper, he used the

occasion to expose what he thought was bad practice in financial PR.



’The issues which were brought up are more important to the future of

journalism than any personal result,’ Weever said after the

tribunal.



There is no question that the relationship between City PR agencies and

journalists is extremely close, but is it corrupt, as Weever

suggested?



His concerns about the Sunday Telegraph centred on the practice of the

Friday night drop, so called because journalists are given information

on a Friday night in time for Sunday editions.



The problem, as raised by Weever, is when a company, usually through a

PR agency or in-house communications staff, provides price-sensitive

information to a journalist on an exclusive basis, thereby breaking

rules set out by the London Stock Exchange and other regulators.



According to these rules, information on a company has to be disclosed

equally to newspapers, and through the Stock Exchange’s Regulatory News

Service. A problem can arise if information is presented when the

exchange’s regulatory news service is closed, but other rules then kick

in so that any announcement has to be given to at least two newspapers

and two newswires.



The drop has existed since the 1970s, when apocryphal tales abounded

about journalists and insider trading. All papers now have guidelines to

the effect that reporters must declare any dealings in shares.



Financial PR consultants prefer handing exclusives to the Sundays rather

than the dailies because stories that run prominently on Sunday set the

agenda for the rest of the week - journalists scrabbling for news over

the weekend for Monday’s edition have routinely repeated stories from

the Sunday papers.



Weever argued at the tribunal that the drop left journalists in thrall

to the ’drop masters’. He said of his boss, Sunday Telegraph City editor

Neil Bennett: ’It seemed to me my old-fashioned and combative approach

was no longer appreciated. It was clearly offensive to the drop masters

and it was these drop masters Neil wished to cultivate.’



Indeed, one PR insider, who declined to be named, believes the climate

of the drop has been encouraged by journalists themselves. ’Sunday

journalists have been complicit in this process, because inevitably they

always say ’I want this for myself’,’ he says.



In response to Weever’s allegations, Bennett said: ’I have never

knowingly broken any takeover panel, Stock Exchange regulation or the

Companies Act in any respect. His allegation that I’m some kind of

supine letterbox for embargoed press releases is deeply wounding. We do

not have to print it. We don’t have to believe it. We don’t have to take

the party line.’



Ivor Walker, chairman of the tribunal, said it had found ’no evidence

whatsoever’ of the alleged breaches of Stock Exchange rules.



Despite a tightening of regulation on price-sensitive information, it is

difficult for regulators to prove that rules have been broken. Having

access to sensitive information is not a crime in itself - it is how

that information is used.



Neil Mainland, chairman of the IPR City and financial group, says: ’The

Friday night drop is a grey area. Those who make and monitor the rules

obviously don’t find the practice too offensive. They appear to take the

view that publication in a newspaper gives people equal opportunity

access to information.’



Indeed, when questions about leaks are raised, they are often left

unanswered.



The Stock Exchange does not usually go on the record about whether it is

investigating a leak, and it is rare for it to censure a PR agency.



A recent story concerning the Scottish Media Group’s planned pounds 130

million take-over of GMTV, for example, was said to have been leaked to

the Times and is believed to have led to an investigation by the London

Stock Exchange, but this has neither been confirmed nor denied.



According to another financial PR consultant, leaks are now carefully

targeted to a wider variety of news sources. ’The traditional Friday

night drop has shifted because of the competition from Saturday papers

and the continued escalation in the pre-eminence of the Financial

Times,’ he says.



’It is wrong to say the Sundays are getting all the drops.’



The trend of drops is likely to be further transformed by the

strengthening of on-line business news publishers like TheStreet.com and

FT.com.



As Weever pointed out during the tribunal hearing, the City’s elder

statesmen and corporate financiers are well aware that the drop exists.

But regulators and those who run the City appear to have little appetite

to stop it, perhaps because it would involve them in time-consuming and

expensive formal regulation of the financial PR industry.



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