Brill’s Stock Portfolio

Chatterbox, who is a charter subscriber to Brill’s Content, thinks Editor-in-Chief Steven Brill’s cover story in the February issue, “What A Deal! Why CBS News and CNN Should Merge,” is well reported and, for the most part, forcefully argued. He also thinks it represents a marginal conflict of interest, because Brill didn’t disclose in the piece that he owns stock in Time-Warner.

Ordinarily, Chatterbox probably wouldn’t kick up a fuss about this sort of thing, but Brill’s Content is no ordinary magazine. It carries a lengthy “What We Stand For” box in every issue. It has has an ombudsman who teaches at Harvard. And, of course, it excoriates other journalists on a regular basis. That makes it far too tempting to whack whenever it commits a misdemeanor of its own.

Brill’s piece says CBS News and CNN should merge in order to give CBS News a cable outlet and CNN a broadcast outlet. CBS and CNN have in fact had such talks, and the deal would seem to make some financial sense. (It would also, however, lead to greater media consolidation, a fact that Brill ought to have mentioned at least in passing. “You’re probably right,” Brill told me when I brought this to his attention.) The piece says that CBS would gain $49 million a year from the deal, and CNN would gain $51 million a year. But how much would Steve Brill gain?

Brill didn’t say, and contended in an e-mail exchange that he probably wouldn’t make much money at all, because 1) his Time-Warner stock represents “a lot less” than 1 percent of his net worth, and 2) CNN is such a small part of the Time-Warner empire that the deal wouldn’t appreciably affect the stock.

[1/24 correction to item 1.): A reader points out that if you look closely at Brill’s e-mail, reprinted in the sidebar below, he isn’t saying his Time-Warner stock is “a lot less” than one percent of his net worth; he’s saying any increase to the stock price resulting from a CBS News-CNN merger would constitute “a lot less” than one percent of his net worth. In other words, Brill may own a lot more Time-Warner stock than Chatterbox realized when he wrote this item.]

(Sidebar time: Scroll down to after Chatterbox’s bylinetoread 1) a portion of Content’s “What We Stand For” box; 2) the entire e-mail exchange between Chatterbox and Brill; and 3) an exegesis of any conflicts Chatterbox himself might have on reporting about Brill.)

“I challenge you to find one stock analyst who would tell you that this deal would have any significant effect on the stock one way or the other,” Brill writes. Chatterbox thought he’d start with Jim Cramer, the stock market tycoon cum financial columnist, who is a Brill protege and contributor to Brill’s Content. Chatterbox doesn’t know Cramer personally, but admires the quantity of his journalistic output and figured he’d have an opinion. Chatterbox was wrong. “Any merger of newsrooms is positive–takes out costs,” he wrote in response to an e-mail query. Chatterbox wrote back that this wasn’t the question; the question was, would the deal boost Time-Warner stock? “Haven’t done enough work to know. Too hack-like to speculate” wrote back the most prolific financial columnist of his generation.

Then Chatterbox called Ken Auletta, who writes about the media for The New Yorker and has also written extensively about Wall Street. “Any time you announce you’re cutting costs, Wall Street trips all over itself to buy your stock,” he said. “The idiots on Wall Street all sit and applaud because they don’t care about journalism.” The rise, he said, isn’t necessarily proportionate to the action taken. Auletta pointed out that when Disney sold off several newspaper holdings, “their stock went way up.” Auletta said he hadn’t yet read Brill’s piece, but guessed that his proposed CBS-CNN deal “would give a little boost to both stocks …. He probably should have disclosed.”

As Brill’s e-mail notes, Brill did disclose his stock holdings in an earlier Brill’s Content piece about CNN and Time magazine’s storied Tailwind screwup. This points, inadvertently, to a separate, non-ethical, but substantive conflict of interest Brill has as journalism critic: Because he used to be partnered with Time-Warner as the founder of Court TV, a relationship that came to a reportedly bad end, he is more obsessed than most of his readers are with the machinations of Time-Warner.

Timothy Noah


FromBrill’s Content’s “What We Stand For” Box

ACCOUNTABILITY: We believe that journalists should hold themselves as accountable as any of the subjects they write about. They should be eager to receive complaints about their work, to investigate complaints diligently, and to correct mistakes of fact, context, and fairness prominently and clearly.”

Chatterbox’s e-mail to Brill:


I mostly enjoyed your cover piece in Brill’s Content this month, but found myself (in my capacity as Slate’s Chatterbox columnist) wondering whether you still own stock in Time-Warner. If so, shouldn’t you have told your readers that, and given them an approximate estimate as to how much a CBS-CNN deal would enrich you? If not, couldn’t you have immediately put to rest an obvious suspicion by assuring your readers you had nothing to gain?

Anyway, Slate wants to know: Do you own stock in Time-Warner, how much, and what’s your best guess as to how much you’d gain financially from the deal you’re promoting. Please let me know ASAP (assuming this isn’t complicated, I’d like to file Friday).

Brill’s e-mail response:

When I did the Q&A with Tom Johnson, Norm Pearlstine and Floyd Abrams about Tailwind, I disclosed that I owned some Time Warner stock. I did it because the piece was totally centered on something that was central to CNN and Time Warner’s reputation. More important, I did it because I was also disclosing that Floyd Abrams acts as my lawyer (which was a much more significant conflict) and since I was using an editors note to disclose conflicts I thought I should throw that one in, too.

The simple answer to your question of why I did not re-disclose is that while I still own shares of Time Warner this deal that I am “promoting” (in your words) would not by most Wall Street accounts have any effect on Time Warner’s stock price. I challenge you to find one stock analyst who would tell you that this deal would have any significant effect on the stock one way or the other. CNN is just not that important a part of Time Warner’s earnings and equity value, and most deals depress stock prices in the short term. But even if it doubled CNN’s cash flow by my back of the envelope estimate that would only bump Time Warner’s share price a point or two at the most – which would have no material affect at all on my net worth – none.

Also, in the course of “promoting” the deal, the article included lots of unhappy facts about CNN’s current market share trends – which, if anything, would lower the stock price IF, again, CNN’s short term cash flow really had anything to do with the stock price.

So, on that basis, after thinking about it I decided that re-disclosing my stock ownership in Time Warner in this article would be unnecessary and even silly. Indeed, it would fall, I suspect, under Michael Kinsley’s category of absurd conflicts, because, again: this deal would have no effect or little effect on the price and even if it did bump the stock a point or two – which no one thinks it would – that would have no siginficant effect on my net worth. (I’ll even define significant for you: less than 1%, and this would be a lot less than that.)

I hope that if you write anything, you will include this full response and that you will disclose your own conflict – which is that you applied repeatedly for a job here when you were leaving U.S. News but did not get one.

Chatterbox’s Possible Conflict of Interest

The circumstances Brill describes, somewhat inaccurately, are as follows: Chatterbox resigned from U.S. News last summer after the editor was fired. This put him in some financial distress, and he put out many calls to potential employers, one of whom was Brill. There were some discussions that did not yield a job offer. Chatterbox found Brill to be attentive and sympathetic about Chatterbox’s plight, which may have prejudiced this item slightly in Brill’s favor.