Book Review: Roush's Show Me The Money Presents Extensive Menu of Business Reporting Tasks

Business reporting has come a long way in the last 20 years. Not only is there more of it, in print, broadcast, cable and Internet formats. But the discipline of business reporting is upgrading journalism of all sorts.

Evidence-based reporting using data, as distinct from he-said-she-said anecdotes, is gaining momentum throughout newsrooms. The leading edge of this revolution is the business press, where numbers have always counted.

The publication in 2003 of Moneyball by Michael Lewis (W.W. Norton & Co.) should inspire efforts at evidence-based reporting on sports desks. Data-driven investigations are finding a bigger place on city desks.

Laggards from this welcome change still abound, especially among political and government reporters. Few city hall reporters, for example, even know about new rules from the Government Accounting Standards Board that could enhance empirical coverage of state and local government.

And despite progress towards quantitative inquiry in daily reporting, business and economics coursework as a non-elective for student-journalists remains a hard sell.

Chris Roush, a veteran business journalist now teaching journalism at the University of North Carolina at Chapel Hill, grabs a lance in this battle with his new textbook: "The public deserves to have information about business from all forms of mass communication written and edited by journalists who are knowledgeable and who can explain the significance of stories to consumers in a way anybody can understand."

With that, Roush presents an extensive menu of business reporting tasks -- macroeconomics; corporate financial statements and other SEC disclosures; mergers and acquisitions; the stock market and initial public offerings; corporate organization and compensation; private and small businesses; not-for-profit businesses; business litigation; bankruptcy; real estate; regulation and regulatory agencies; and Internet tools for business journalists.

Each chapter includes suggestions for further readings and "suggested exercises" to guide classroom discussion and, presumably, homework. Roush aims his book at students tasting business reporting for the first time.

His experience shows especially well in the chapter on mining the so-called 8-K reports public companies must file with the Securities and Exchange Commission to disclose "materially important" news.

Recent litigation and regulatory action has increased pressures on public companies to reveal more about themselves. 8-K reports often go beyond related press releases. But, Roush notes, "Many 8-Ks are filed on Friday afternoons, particularly if the news is bad."

M&A deals have become commonplace, to the point that journalists tend to treat them with formula reporting. Roush's discussion of evaluating the merits of M&A deals raises the bar.

There are three elements to a good M&A story, not all of which can be reported when the news breaks: how did it happen, what are the terms and what are the consequences for everyone concerned. No formula fits all cases.

But Roush missed two elements of his own story.

He declined to address the phenomenon that is most responsible for making business journalism what he calls "the growth industry of mass communication for the last 15 years."

Individual investing -- not economics or corporate news -- has been the growth engine of business journalism. Editorial budgets for business coverage depend almost entirely on the demands of individual investors for news they think they can use.

Yet "personal finance" is relegated to second-class status by "serious" business journalists and ignored in Roush's book.

Bringing young people into the tent of business journalism requires a candid and practical analysis of the role of journalism in personal finance decisions. Losses by pension and 401(k) beneficiaries, rip-offs by investment promoters -- these should be the red meat of business journalism, with no apology about "service journalism."

It's likely that many students are ahead of their teachers. Indeed, the demand for evidence-based reporting is driven in large part by insights people -- young and old -- are gathering about their world, as they make individual investment and career decisions. Even students have portfolios. They know what "show me the money" means.

Roush's second omission follows from the first. Perhaps the greatest lesson individuals have learned from their experience handling their own money is the concept of relative value. From the Morningstar star system for mutual funds to price/earnings ratios for stocks, ordinary investors know enough to ask, "compared to what?"

Yet many business reporters are unable quickly to compute a percentage change. Newsrooms everywhere continue to be afflicted by math phobia, also known as MEGO (my eyes glaze over).

Any introduction to business journalism should begin with a basic understanding of and appreciation for statistics -- the science of numbers. The promise and pitfalls of statistical analysis must precede a first look at an economic report or corporate balance sheet.

Competence in statistics builds confidence, stimulates curiosity and, believe it or not, makes business reporting fun. Probability analysis, game theory and historical statistics enliven business stories.

Every beat in journalism is less intimidating to newcomers with a cookbook written by a veteran. Show Me the Money serves that purpose well. But before they study the cookbook, budding journalists must become interested in the meal.

Copyright © 2008 Donald W. Reynolds National Center for Business Journalism