Are Journalist Lay-Offs Impacting Media Coverage?

by lisa ~ May 28, 2009

May 28, 2009 - A new article by the Wall Street Journal says that declining numbers of equity analysts are depressing public companies’ share prices. With the collapse of Lehman Brothers and Bear Stearns and massive lay-offs by other investment banks, analyst coverage is shrinking, particularly for small and mid-cap companies.

“Though they are faulted at times for being too cozy with companies and too bullish on their stocks, analysts build a mosaic of information and analysis that can help drive interest in a particular company. The good ones do an even better job of understanding when corporate operations are struggling and thus warn investors away. When coverage fades, stocks feel the impact,” wrote the authors.

Logic dictates that the same holds true for companies’ media coverage. With dwindling numbers of reporters at virtually every outlet from The New York Times to Dow Jones, is media coverage of public companies - or any companies at all, public or private - shrinking as well?

PRWeek would find it nearly impossible to get on-the-record statements from PR professionals, lest clients come to the conclusion that their agencies are wasting their $20,000 monthly retainers. But it is apparent to me that the business reporters who remain on the job are under severe pressure. With the fast pace of today’s developments, they are trying to keep up with all of the earnings, bankruptcies, and other essentials that comprise their expanded beats. In other words, reporters are attempting to cover the bare minimum of breaking news - and pursuing new sources, writing extensive features, and attending events are out of the question.

Perhaps two leading indicators of the recession’s end will be new analyst coverage and increased feature writing.

To read the full Wall Street Journal article, “MIA Analysts Give Companies Worries,” click here: http://online.wsj.com/article/SB124328512396452063.html

 Lisa Tibbitts (Lisa.Tibbitts@Me.com) is a New York-based corporate communications professional with an MBA in marketing. Follow her on Twitter: http://twitter.com/FinancialPR.

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