What`s notable about the debate over Terry Savage is that there`s a debate at all.
Savage is a capable personal-finance reporter for WBBM-Ch. 2, a woman of means who drives to work in a blue Rolls-Royce. But her stylish way of avoiding the indignities of the Chicago Transit Authority seems less remarkable than some Fortune 500 juggling she`ll now perform.
Last week, Savage was named a director of McDonald`s Corp., light duty that pays $24,000 annually plus $2,000 per board meeting.
WBBM, the CBS-owned station, voiced complete support. It noted that Savage is a free-lancer, not a WBBM staff member (albeit with her own office, an income that`s very likely in six figures and, effectively, her own producer). The message is that she`s therefore exempt from normal CBS conflict rules. Bill Kurtis could not do likewise.
The Chicago Sun-Times, for which Savage writes a column, will continue to publish her work but regularly note her tie to McDonald`s. Editor Dennis Britton distinguished between journalists and ”expert” columnists. He said that Savage, whom a New York Times commentary characterized as a ”respected freelance financial journalist,” is short of that. ”Terry is not a journalist,” he said, an assessment that must please her and WBBM.
The Dallas Times Herald, where her column also appears, will do the same as the Sun-Times, said business editor Jim Frisinger.
”We`ve got a firm that makes Styrene containers in Ft. Worth, and I wouldn`t be surprised if McDonald`s is a customer,” said executive business editor Bob Deitz.
Savage and station officials noted that she doesn`t write about, or tout, specific stocks and wouldn`t cover McDonald`s. That rationale seems akin to a Tribune reporter`s serving as part-time mayor of West Chicago (similar pay, $24,000) or Wheaton (no pay) but promising not to report stories in Du Page County.
Andrew Leckey, a WLS-Ch. 7 financial reporter, writes a personal-finance column for this paper. Editor Jack Fuller and financial editor Bill Neikirk said that if Leckey were named to the McDonald`s board, he`d have to choose between the board and the column.
To them, it`s not even a close call. The thrust of Tribune ethics guidelines would preclude board memberships by reporters.
”In politics or journalism, the perception of a conflict can be as damaging as the real thing,” Leckey offered. ”No one wants the public perception that a corporation has bought itself a journalist. The journalist should be on the side of the individuals who read and watch our work, not the institutions we cover.”
By being a McDonald`s director, Savage is essentially paid not to report a wide array of actions that can have ramifications for a variety of major industries. Under securities laws, she has a fiduciary duty not to disclose information the board mulls.
Consider how the reach of McDonald`s extends beyond the fast-food sector and North America. It`s involved daily around the world with, among others, the plastics, soft drink, paper, advertising, broadcast, cable, sports, real estate and banking industries. Whether you sell apples, ice cream or light fixtures, having McDonald`s as a customer-or losing it as a customer-is a fact of major economic impact.
Now, let`s say that at a board meeting, Savage learns the corporation is switching accounting firms, soft drink suppliers, ad agencies or paper manufacturers. Perhaps it`s settling a high-profile legal dispute.
Or maybe she hears that Michael Jordan will end his link to McDonald`s, or its outside accountant confides that the accounting firm is close to insolvency. Or it`s divulged that previous revenue estimates were woefully inflated. Or that the company is mulling a takeover. Or that a top executive ripped off several million dollars, prompting a ”resignation” that will be announced quietly in a few days.
A diligent reporter who heard such things would labor hard to confirm and disclose the information. And it sure might be of interest to newspaper readers or TV viewers concerned about their personal finances. But it`s news that Savage, the board member, can`t divulge.
WBBM permits a situation that its own network`s news division would not. A CBS News spokesman said staff members, including financial reporter Ray Brady, are barred from such board memberships.
The spokesman would not discuss hypotheticals. But a reading of CBS News conflict rules suggests that Savage, if she were a contributor to ”CBS This Morning,” would have to choose between the board and CBS. There`s also the perception problem: Any complimentary mention of McDonald`s could prompt speculation about the Savage tie.
Compared with most papers, the Tribune is exemplary, especially in its strictures on free trips and lodging. And yet it, like many communications companies, confronts thorny situations that are increasingly common in a world of growing media concentration where, say, a Time magazine critic reviews a Time Warner movie or a Tribune reporter covers the Cubs.
If, for the sake of full disclosure, the Sun-Times now feels compelled to note Savage`s corporate tie on columns totally unrelated to McDonald`s, what about Roger Ebert`s million-dollar tie to Walt Disney Co. when it comes to his reviewing its own movies? Both Ebert and Gene Siskel, a contract critic for the Tribune and ”CBS This Morning,” review movies made by Disney, whose Buena Vista Television subsidiary owns and syndicates their TV show. Now, they also review movies for Disney-owned KCAL-TV in Los Angeles.
Sometimes, ethical questions at different media companies are resolved by what might be called the 800-Pound Gorilla Factor. The higher the profile of a particular employee, the more likely management may be to bend in allowing what it wouldn`t permit for most others.
Nationwide, big-time local sports columnists often enter into financial relationships with figures they continue to cover (ostensibly via authorized biographies or ”autobiographies”). Such deals would not be countenanced if the City Hall reporter signed on to do a book with the mayor.
In an age of heightened cost-consciousness, ethics can become a lower priority. Avoiding conflicts is expensive. Editors who know that staff members shouldn`t take a free plane trip and hotel stay to interview Meryl Streep about a new movie may subordinate that knowledge to financial imperatives and reader interest in celebrities.
The issue is further muddied as journalists increasingly act as entrepreneurs, seeking speaking engagements and TV appearances. But certain basic concepts are pertinent.
If you want to be taken seriously as a reporter, you don`t work both sides of the street. Terry Savage is now working both sides.
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It`s reassuring to learn that Gov.-elect Jim Edgar is worrying about traffic reports on WGN-AM 720.
He just met with station officials over the fate of state trooper Linc Hampton, who`s paid by the state but works as a WGN traffic reporter. Use of a second trooper ended. Cook County Sheriff Michael Sheahan axed a similar WGN compact with officer Mike Mathis.
Edgar wouldn`t have a problem with WGN reimbursing the state for employing Hampton, says news director Dave Ellsworth. His problem is WGN`s exclusive situation and the state`s financial inability to accommodate other stations that might seek such assistance.
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Ald. Fred Roti was lucky. After his indictment last week on charges of racketeering and fixing a murder trial, he got his picture in the papers for free.
In Florida, Escambia County Judge William White just ordered 12 folks convicted of misdemeanors-including soliciting for immoral purposes, drunken driving and shoplifting-to spend at least $72.40 each for ads in the Gannett- owned Pensacola News Journal featuring the defendant`s name, picture, charge and plea. It`s part of a relatively new gambit among judges, namely issuing sentences of public humiliation rather than stays in jail.
To the judge`s order, News Journal publisher Kenneth Andrews said no way. He understands the judge`s intent, he said, but ”the newspaper as a matter of policy does not wish to become a vehicle for court-ordered public humiliation.”
The judge said he`ll respond to Andrews. In the meantime, why doesn`t he force his local lawbreakers to make cameo appearances on ”America`s Most Wanted”?
