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
There is no question that the relationship between City PR agencies and
journalists is extremely close, but is it corrupt, as Weever
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
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
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.