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Follow the Money:
How to introduce students to business journalism

Abstract
This paper argues that in the face of global economic upheaval it is important to equip journalism students with the vocabulary and basic understandings that will enable them to report responsibly on business and economic events over the coming years. It presents a rundown of the topics covered by Edith Cowan University’s new business journalism unit and summarises student responses to the first iteration of the unit in semester two 2008.

Introduction
If there is anything to be learned from the financial cataclysms of late 2008 it is that turning a blind eye to the complex manoeuvrings of the business world does nobody any favours. The problem facing journalists trying to cover corporate shenanigans is that the finance world is infinitely complicated. It is, and always will be, because where there is money, there is always someone looking for a new loophole through which it can be extracted. It is the complexity of the rules and practices in the business sector that often leaves young journalists feeling inadequately prepared to consider business reporting as a potential career path. This paper will argue that it doesn’t have to. Just as young journalists without degrees in politics can report of parliament, and without degrees in criminology can report on murder trials, so too can reporters without business degrees report on financial and economic events.

The problem we face as journalism educators is how we can prepare our students to be the 4th estate watchdogs of the future. The events of 2008 and the ensuing crises and recessions have not only shown the importance of covering business news, they have also shown up the gap between common public knowledge about the ways that money, risk and debt are traded and the realities that underpin daily life in the financial sectors.

Reflecting on HIH and OneTell disasters in 2001, that clearly hurt a lot of ordinary Australians, then-editor of Crikey Stephen Mayne said: “It raises serious questions about business journalism” and he asked how it was that “no one could grasp the looming disaster”. Elaborating, and highlighting the shortcomings of business journalism as it is practiced in Australia, he added that "Business journalists are too soft, they should go in a lot harder, they get too many freebies, and they also work in too isolated an area" (1). These comments were made at a forum at the University of Technology in Sydney focussed on contemporary Australian business journalism.

Many issues were canvassed including the need for business journalists to resist corporate attempts to curry favour and to scare journalists of the track of a good story. ABC business reporter Debbie Whitmont told the forum that "One reason why TV reports so poorly on business stories is they're very difficult” (1). In the eight years that have passed since that forum, a number of new online blogs and business news sites have launched, such as Business Spectator and the Eureka Report, but it is still viewed as a field for specialist writers and readers and not much has been done to help working and student journalists to up-skill to deal with the difficulties the field presents.

Similar forums held in the US in the wake of the dot.com bubble resulted in the launch of the Donald W Reynolds National Center for Business Journalism based at the State University of Arizona. The centre is, in its own words, “an ambitious nationwide effort to improve the quality of American business journalism”.

Summing up the fourth estate rationale that underpinned the Center’s establishment, director Andrew Leckey said simply: “Business stories are important because they affect people’s lives” (2).

In Australia, not all high school students study economics and this means that many Australians have never been taught anything about the basic economic mechanisms our government uses or the legal structures that control company behaviour in Australia. This presents a challenge to all journalists seeking to publicly scrutinize economic and financial activity. On the one hand we need to be savvy enough to ask penetrating questions, on the other hand we need to be able to explain our questions and the answers we get to them to largely ill-informed readerships. This challenge has led to a segmentation of media in Australia between finance and other news.

The media, such as The Australian Financial Review, that does a good job of scrutinising the business world is pitched at readers with a higher than average level of education and familiarity with the vocabulary of the business world (3).

While the business press within the Australian media has a life of its own, the portions of it that trickle into mainstream media often do so in a way comes across as garbled or elitist, leaving readers feeling bamboozled by the machinations of the sector, and young journalists terrified of venturing anywhere near it.

Diana Henriques (4) noted that a growing number of critics were expressing concern about the way journalism was explaining the world of business to the public, but added:

    To be fair to today's crop of business journalists, I do not think that ourperformance represents some recent fall from an earlier state of grace. While researching two books rooted in business history, I have become a frequent visitor to the microfilm and microfiche rooms that contain the business journalism of earlier generations. And let me tell you, if there ever were agolden age, this is probably it -- inadequate as it is.

In 2002 Luwig (5) conducted a study that involved interviewing 18 US business editors and reporters and found that nearly all said that business journalists need classes or training in business and economics to do their jobs well. Claiming that there was broad argument within journalism that business and economics reporting was lacking, he said that the complexity of business, finance and economics required a sophistication not typically taught in journalism school and that this situation raises questions about whether readers were being adequately served by journalists.

I was fortunate early in my career to have been the cadet in my intake assigned to the business section of a daily newspaper. Aged 18 and not even armed with highschool economics I was at the bottom of a steep learning curve. My editor started me writing lists of tidbits gleaned from company ASX announcements. I typed numbers into tables and then graduated to writing market reports. Next came profile stories on colourful local business people, and invitations to attend the openings of new buildings, factories and warehouses. Story by story my confidence, contacts and knowledge-base grew. While initially I made good use of the question “How would you explain this to someone who didn’t understand it?”, within a few years I was asking harder questions and writing more serious stories both in finance and in other fields of journalism. Having been trained as a journalist in a finance section I am convinced that this is an area of reporting that young reporters can tackle and that, if they do, they emerge better armed to ask good questions about money when reporting on politics and other matters.

In 2007 I suggested that Edith Cowan University add a unit in business journalism to its journalism program and I was asked to write and teach the unit. It ran for the first time in second semester 2008, for the second time in second semester 2009 and it is now a regular part of the final years of the ECU journalism program. In 2007 and 2008 I asked the Journalism Educators Association if anyone else was teaching business journalism in Australia and I was told that no-one was (although Prof Kerry Green had done in the past). Around this time Oxford University Press expressed interest in commissioning me to write a text book on the topic, but after it conducted a survey of potential buyers that concluded that no other Australian university was teaching business journalism, it deemed the idea uneconomic and the textbook proposal remains on hold. I am offering this summary now in the hope that others will find it a useful starting point and to stimulate discussion about how these fundamentals about business and money can be funnelled through the journalists of tomorrow into the citizenry living in the post-global economic crisis world.

Summary of the unit content
As we work in 12 week semesters the unit was divided into 12 weekly topics that incorporate lecturer material and class activities to foster discussion and enthusiasm. I also built in three assessment items designed to maximise student engagement with the topics. The first assessment is a weekly online journal task that required ten entries over the course of the semester. As this breaks down to each task being worth only three marks the tasks aren’t large, but they require the students to read back over the lecture notes and into media cuttings that are handed out in class. The second assessment is a profile feature article on a company that requires students to find a company announcement on the ASX to use as a news trigger. This assessment uses feature writing skills developed in other journalism units and applies them to the finance sector in a way that fosters a sense of mastery and that reinforces that basic journalism skills can be applied to reporting on businesses and for business audiences. The final assessment is an essay that asks them to critique a piece of journalism on either emissions trading or the global financial/economic crisis. This forces engagement with these important issues on a deeper level than simply consuming news about them. As these are both issues likely to play out in the media for years to come, background knowledge about them is a valuable asset for young journalists.

The following paragraphs summarise the 12 topics that make up the unit:

Week one: What is money?
The course kicks off with a game where students with virtual fish, cows and vegetables attempt to barter and encounter problems with incompatible units of exchange and difficulty in finding ways to store value. This begins our class about money and its evolution from olden day market places, through the gold standard era, to the fiat money and floating dollars of today. This class also introduces the concept of supply and demand and the socialism to capitalism spectrum with monetarism and Keynesianism (and their Australian supporters) located within it.

Week two: Red tape and Regulations.
This week charged the students up with the fourth estate notion that much of the work of finance journalists is about looking out for instances of lying and stealing. It introduces ASIC and the Corporations ACT (2006) and the rules set down for the behaviour of company directors. The lecture then looked at the ASX and the interaction between ASIC and the ASX. The class activity for the week was to read through copies of The Australian Financial Review in class. Reading some stories out loud made them more easily understandable. Students were tasked with finding words they did not understand and looking them up in a dictionary to help build their vocabularies.

Week three: Risk and Reward.
Risk and debt are slippery concepts in the world of finance, where they are monetised and traded in a way that outsiders often don’t understand. The worldwide confusion over the subprime mortgage crisis was clear evidence that debt trading is not well understood. This week’s class looked at money as a store of value (as discussed in week one) and at low and high risk ways of storing wealth.

Low risk ways include government bonds (which were explained) and a range of riskier investments were then introduced. Students were given lists of basic investment tips (compiled by financial advisors) that can be used to structure a line of questioning for articles on the pros and cons of specific investments. Other topics covered included hedging and we played Deal or No Deal to illustrate the difficulty of abiding by an investment strategy in the heat of the game. A key lesson of the week was the importance of not giving financial advice as, according to the ASIC rules, that is the province of licensed advisors and not journalists.

Week four: Investing and Trading.
This class walked the students through the ASX website and introduces them to its most media-friendly features. It showed them how to find the lists of the biggest movers of the day and announcements those companies may have made. It also described the sectors and indices and other key figures used to provide a summary of business news for the day. It reverse-engineered a commercial TV evening news business section and left the students able to collate information for that kind of wrap-up summary.

Week five: Is this company really worth anything?
In this class the students were all given a copy of a glossy, colourful company financial report and together we dissected it and found the key numbers to look at to find out if the company was doing better or worse than it had done in previous years.

Week six: Trademarks, Patents and IP.
This week introduced issues like branding, franchising and the protection of intellectual property. It used concrete examples of companies they knew and articles to keep it engaging.

Week seven: Moguls and Cartels.
As well as introducing the students to the laws around cartel behaviour this class covered the general narrative structure used across journalism in telling stories about high achievers. In specific it focused on the temptation to characterise the subjects of our profile articles as heroes or villains and the importance of resisting this temptation when writing about business people. Heroes too often fall from grace, leaving egg on a profiler’s face. This class also ran through the names of some key figures from recent history and names journalists should recognise.

Week eight: Economics, governments and money.
The key focus of this class was teaching the students what reserve banks do. In doing this it built on the week one class that introduced the idea of floating currency. The Reserve Bank of Australia website is well stocked with good teaching materials, appropriate for undergraduate journalism students. By working through some of these materials students can, over the course of a few hours, get a good grasp on the money supply lever that the RBA can pull and how it impacts on the cash rate and interest rates. Given the amount of media attention the RBA now receives students appreciated clarity on the meaning of the terms often used, and quickly become vocal critics of incorrect but common media statements such as “The Reserve Bank has set the cash rate at...” A trading game was used to demonstrate the way that the Reserve Bank influences the cash rate without dictating it.

Week nine: How to report on a government budget.
Reporting on state and federal government budgets is a common task for finance journalists and this class provided a guide to the process, including tips about where to find juiciest details and how to compare them with figures in previous budgets.The class also covered brief descriptions of deficits and surpluses, balanced budgets, productivity, inflation, deflation, stagflation and state versus federal spats over infrastructure funding. Examples of journalism included federal budget coverage from a range of publications.

Week ten: Trade, War and Peace.
People fight for resources so that’s why we trade. This class looked at how globalisation and increasing levels of consumption have impacted on economies and how are war and trade inter-related? It introduced the organisations and treaties that guide the game on an international level. These included APEC, the IMF, the World Bank and the Asian Development Bank, industry organisations like OPEC and bi-lateral and multilateral agreements such as the Free Trade Agreement (FTA) and the Global Agreement on Trade and Tariffs (GATT). Examples of journalism including reports of the outcomes of summits such as APEC, the G8 and the G20 were presented for discussion.

Week eleven: The carbon economy.
In 2007 emissions trading seemed like an obscure topic to include but now it is centre stage. The Kyoto Protocol comprises of three financial mechanisms that can be explained to a class in half an hour and yet most Australians don’t know what they are. This lecture covers those three Kyoto mechanisms, and it looks at Australia’s proposed ETS and CPRS in the light of them. Other concepts covered included carbon and water taxes, biofuels and their dependence on emerging GM technology, the risks posed by soil degradation and the potential for widespread food shortages and growing awareness of true costs and food miles. In closing, it asked students to consider whether they thought the market could save us from the looming crisis -- and how as journalists they could document the evolution of an answer to this question.

Week twelve: Mining and sustainability.
First there was just one bottom line to worry about and then there were three, and then four and then six and now it’s just called sustainability and it includes fiscal, environmental and social accountability. This class provided background on the evolution of the business case for responsible corporate behaviour, beginning with events such as Shell’s misadventures in Nigeria, the Bhopal gas leak, Dow’s Love Canal pollution drama and BHP Billiton’s court case over the Fly River. The lecture ended with a look at the internal and external auditing processes now available so that journalists could assess the credibility of companies’ claims about compliance with best-practice standards. This class also included a brief history of the JORC Code used in the mining industry to standardise resource estimation and discussion about how the need for sustainability has impacted on the evolution of extraction techniques. It also discussed how the imperatives of sustainable practice are impacting on the plastics and chemicals sector driving the development of new products and new business models. Examples of journalism included exposés of corporate misbehaviour and features on acts of good corporate citizenship.

Student responses
My first fear in launching the unit was that no one would enrol, and my second was that they wouldn’t find it interesting or engaging. The first cohort of students did away with both of these fears by turning up each week for our three hours seminar-style classes (unfortunately timetabled for 8.30am Monday mornings) with cheerful good humour. In the main, they paid attention, asked good questions and gave positive feedback.

The biggest criticism the 2008 class had was that some weeks I tried to present too much information and I can see their point. The weeks that worked best were the ones that involved games and class activities, as opposed to three hours of lecture content, and in 2009 I included and activity in every class.

On the student evaluation instrument the unit scored 59 (on a -200 to +200 scale) in 2008 and several students left comments such as: “This unit opened my mind to a whole other language and different styles of writing”; and “I have found the unit very helpful. I have learned about Australia's economy and how easy it is you use sources like the ASX website and FIDO to find new and interesting stories. I also found it surprising how much information and how many valuable story ideas you can get out of the budget!”

Looking at their responses in more detail the highest scoring item was ‘The unit extended my learning’ (73), followed by ‘The unit challenged my thinking’ (64) and the lowest scoring item was ‘The assessments in this unit accurately evaluated my learning’ (36). My interpretation of these scores is that the majority of students felt that the amount that they had learnt warranted higher marks than they were given, but the marks were given to reflect the gap between the standard of work they produced and the standard expected in a newsroom.

The ten tasks the students had to complete for the journal/blog assessment arose out of the weekly lecture content and usually required some kind of reflection on the topic of the week. Some weeks they had to read articles that I handed out in class and comment on them, other weeks they had to demonstrate the ability to find particular pieces of information (such as the salary of a public company director). In the second week the blog task was to read a copy of The Australian Financial Review and to find at least seven words that they didn’t know the meaning of and look them up and record them. This task not only forced reading of the publication, it also provided useful data about their financial literacy. The 120 words that they listed (Appendix A) ranged from generic English language words such as stymied, debauchery, synergy and rescinding; through colloquialisms like bullish, bearish, red tape, winding up, blue chip, outsourcing and write-downs; to words common in political parlance, such as oligopoly, proxy and multilateral; and specific financial terms that ranged from commonly used words, like shares, dividends and superannuation, to more complex entities like amortisation, hedge funds, pro rata issues and convertible notes.

The two words chosen most often (each by seven students) were dividend and speculative. These two words are commonly used in much of Australian’s media, not only the financial press, and so it is interesting to note that they were not words that all of these final year journalism students knew. In teaching the second iteration of the unit I have used the 2008 list and now make a point of talking about vocabulary extension. Each week we review the new words we have learnt and the way they have helped to build understanding of how the sector works and how it can be described in colourful elegant language.

I have also found it useful as a tool to help me evaluate the level of education about the sector that the students arrive with, so that I can pitch my classes appropriately and not disengage them by speaking about topics that they don’t have the vocabulary to follow.

Self evaluation
I am confident that the unit succeeded in broadening all of the students’ understanding of how the corporate and political worlds operate, but less sure that it left them all equipped to start working as business journalists. Only a small proportion produced pieces of journalism that would be accepted in a working newsroom, but all received feedback which will, hopefully, prevent them from repeating their mistakes in future.

While some of the students emerged from the course keen, and well equipped, to work in the business press, some learnt that business reporting is not their forte. I don’t read this as a failure though, as knowing what you don’t know (or don’t do well) can prevent careless errors being made, and because journalists in all fields sometimes have to write about companies and budgets. In 2008 I learnt a lot about undergraduate attention spans with various topics, and the degree of simplification required to communicate key concepts. I learnt not to take their vocabularies for granted and that pictures, diagrams and games help to make the content more palatable.

In 2008, marking their profile article assignments, I noticed how readily they panicked and threw out everything they knew about feature writing (instead producing dry list-like reams of text). In 2009 I made a point of reminding them of the importance of narrative style and they produced better work. This process of using what is learnt from the errors of one group to improve teaching of the next, is ongoing. The unit is not perfect, some of the students find some of the content dull, some struggle with the concepts, but none of them learnt nothing, and each year the delivery is getting more streamlined and efficient, hopefully continually improving the quality of the work they produce.

Conclusion
I was delighted that in each of its first two iterations the new business journalism unit attracted a full class of 34 students. While some chose the unit just because it fit their timetables, many said that they came because they were worried about how little they knew about finance. In both iterations in week one I asked the class who had ever read a copy of The Australian Financial Review, in each case only a couple of the 30 raised their hands. Asked why, they said that it seemed boring and that they didn’t understand it. By the end of the unit this had changed though and in an informal class discussion, most of the class said that they had reached the point where they could read and understand most of a copy of the paper.

While this course cannot contain a whole business degree’s worth of information, it does provide an orientation into the sector that enables deeper, ongoing learning to commence. It does not assume any prior knowledge of mathematics or economics and, in order for it to be appropriate for international students, it does not assume knowledge of the Australian political and financial sectors. It is the crash course in business writing that I wish I had been given at the beginning of my career as a finance journalist. A serious downside of having to learn about the mechanics of the sector you are reporting on while you are on the job is that it creates an unhealthy power dynamic between young reporters and the subjects of their stories. While the reporters should be able to ask tough questions from day one too often they are forced into the low-status position of having to ask their subjects to explain the financial manoeuvres they are reporting on. In addition, without training in this area there is a risk of journalism students producing naïve and misinformed articles that are dangerous to journalism as they undermine media credibility and dangerous to readers, who may be encouraged to follow reckless and inaccurate investment advice.

Sadly though, most finance reporters are currently trained on-the-job because most universities are not teaching business journalism as part of their journalism courses. I worry that the reason behind this lack of teaching is a lack of familiarity with business journalism among journalism educators. I hope that by making the gap between the students’ level of knowledge and the maturity of the readership of The Australian Financial Review more visible, others will be encouraged to start incorporating more business content.

On the upside, there is constant industry demand for young journalists able to work in the field of business reporting as many business reporters and media commentators move from journalism into other positions in the business sector. There is currently a high rate of cannibalism within business journalism in Australia with promising young journalists being head-hunted from relatively small circulation business publications by major media outlets. This means that students who excel in business journalism studies have genuinely good prospects of finding employment in the sector.

References

  1. Beirne, M. (September 5, 2001). HIH and OneTel disasters bring journalism practices into question, retrieved on September 29, 2009, from http://www.reportage.uts.edu.au/news-detail.cfm?ItemId=12357
  2. BusinessJournalism (2009). About Us, retrieved on September 29, 2009, from http://www.businessjournalism.org/bizjournalism/about/index.cfm
  3. The Australian Financial Review readership demographics, retrieved on August 10, 2009, from: http://www.adcentre.com.au/the-australian-financialreview.aspx?show=audience
  4. Henriques, D. B. (2000). What journalists should be doing about business coverage -- but aren't. The Harvard International Journal of Press/Politics. Volume 5, Number 2, Spring, pp. 118-121.
  5. Ludwig, M.D. (March 22, 2002), Business journalists need specialised finance training. Newspaper Research Journal. Retrieved on September 29, 2009, from http://findarticles.com/p/articles/mi_qa3677/is_200204/ai_n9037352/?tag=content;col

Appendix A

Words from the AFR that the JOU3109 082 class needed to look up
(Number) denotes how many students nominated a word
 
Dividend (7)Bull marketInstitution
Speculative (7)BullishInsurance trading ratio
Warrant (5)Capital Joint venture
Amortisation (4)Capital Expenditure Liability
Brokerage (4)Capital GainLiquidity
Remuneration (4)Capital gains taxListed companies
Share market (4)CDOsLitigation
Assets (3)CommoditiesManaged Investments
Constitution (3)Commutation Margin call
Insolvency (3)Compliance plan Master trust
Principal (3)ConglomerateMortgage
Property trust (3)ContingencyMultilateral
Return (3)ConvergenceMultilateralism
Shares (3)Convertible noteOligopoly
Unit (3)Corporate earning growthOutsourcing
Asset classes (2)DebaucheryPaid-up capital
Cumulative pref. dividends (2)Debenture fundPro rata
Enforceable undertaking (2)DebenturePro Rata Issue
Equities (2)Deferred chargeProduct disclosure statement
Equity funding (2)DeficitProtectionism
Franked dividends (2)Deleverage Recession
Leverage (2)DerivativeRed tape
Liquidation (2)Dividend Reforms
Option (2)Dividend imputationRescinding
Oversubscribed (2)Economic growthRevenue
Premium (2)Equity interestsRights issue
Prospectus (2)EschewedSecondary Market
Proxy (2)EscrowSecuritization
Redemption (2)Exchange Traded Fund Statement of advice
Securities (2)Financial product Stymied
Subsidiary (2)Financial Services GuideSub-prime Morass
Takeover (2)FiscalSubprime mortgage crisis
Volatility (2)Fund managerSuperannuation
AnnuitiesFutures Synergy
ASX GearingTrust account
Baby-boomersHedge FundsUnilateralism
Bear marketHedgingVenture
BearishHyperinflation Volatile
BidIndex (Indices)Winding up
Blue chipInflationWrite-down

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