News organizations increasingly turn to sponsored discussions as source of revenue

Source: By Paul Farhi, Washington Post • Posted: Friday, March 14, 2014

The formula is simple: Take a high-minded topic and a few knowledgeable talking heads, and rent a hall. Then get a sponsor willing to shell out top dollar to splash its name on the ensuing discussion.

To give the event an extra sheen of authority and credibility, it helps if the organizer is a prestigious news organization.

For the news media, it’s no longer enough to merely report the day’s events. At a time when traditional advertising revenues are under stress, news organizations are developing a lucrative — and sometimes controversial — sideline by orchestrating live discussions about events and ideas in the news.

The Washington Post, Politico, National Journal, the New York Times and National Public Radio, among many others, have plunged into the business of hosting conferences and panels about such weighty topics as health-care reform, climate change and income inequality. The field has become so crowded of late that one wit jokes that she can eat a free breakfast every day of the week in Washington just by showing up to one of the town’s many media-run panel discussions.

Politico staged about 100 such events last year, or roughly two every week. The Post held 26 events, from a forum on preventing childhood obesity to another on cybersecurity. The Atlantic, an early practitioner, orchestrates dozens of discussions large and small; among its events is the sprawling Aspen Ideas Festival and “salon”-style dinners that bring journalists, newsmakers and corporate sponsors together, sometimes for background-only chats.

The events are a perfect match between revenue-hungry media outlets and the business interests that want to put their names in front of small but select audiences, typically no more than few hundred people. The companies pay fees — sometimes as much as six figures for big events but usually less — to sponsor events that draw lobbyists, policy experts, government officials, journalists and mere civilians. The sponsors get their names plastered around the meeting hall and, usually, an opportunity for a representative to make some brief introductory remarks to the audience.

While news organizations, including The Post, won’t discuss specific financial details, event hosting appears to be a growth business. The Atlantic, founded in 1857, earned about 20 percent of its entire revenue from event sponsorships last year, according to Elizabeth Baker Keffer, who heads the magazine’s 30-person events division. In a recent staff memo, her boss, Atlantic Media chairman David Bradley, said the Atlantic’s sister publication, the National Journal, generated about two-thirds of its revenue from event sponsorships and digital advertising, with only a third coming from traditional print advertising.

The business is so hot that Keffer worries about “audience and sponsor fatigue.” “You really have to work hard to keep the formats fresh and the audience engaged,” she said.

All the talk has raised some ethical questions, too.

Critics contend that the traditional separation between editorial content and advertising is eroded when news organizations create single-issue discussions funded by a sponsor with a vested interest in the topic at hand.

“Sponsoring an event is like sponsoring a particular news article,” says David Halperin, a lawyer, writer and advocate for environmental and education groups. “[If] the article is for sale . . . the pressure to make the article please the sponsor is stronger.”

Halperin adds, “If Exxon gives you $100,000 to do an event, your moderator isn’t likely to mercilessly attack Exxon.”

In Washington, the sponsor market tends to be dominated by large corporations and their trade associations. Defense contractors Northrop Grumman and General Dynamics, for example, were among the sponsors of Atlantic Media’s invitation-only Defense One Summit in November that featured Secretary of Defense Chuck Hagel and the acting secretary of the Air Force.

The coal-industry group, the American Coalition for Clean Coal Electricity (ACCCE), recently sponsored two different panels on energy policy. AARP was one of three sponsors of The Post’s three-city series on caregiving. “Corporate interests do get a special kind of exposure” through these sponsorships, says Peter Hart, a director of the media watchdog group Fairness and Accuracy in Reporting.

Journalists say they — not their business colleagues — select the topics, questions and panelists for their discussion panels, a step designed to ensure editorial integrity.

But that’s not always the case. The Chronicle of Higher Education went to an extreme to accommodate its sponsors of a panel in late 2012. Without mentioning it in its pre-event promotions, the publication allowed the event’s sponsor, a for-profit college operator called Career Education Corp. and the nonprofit trade group Education Finance Council, to select the panelists for a discussion about ways to reduce student defaults on college loans. This gave the advertiser, not the publication, broad sway over the discussion — something most newsrooms adamantly resist.

In an interview, Michelle Thompson, the Chronicle’s associate publisher, defended ceding control to sponsors. “There are many different models” for events, she said. “Sometimes the newsroom selects [the topics and panelists]. Sometimes we just act as the host.”

Even when newsrooms handle the arrangements, which they typically do, there’s another risk: Unless a panel is carefully balanced, the discussion can become one-sided. Halperin cites the January energy-policy event at the Newseum in Washington that was organized by RealClear Politics (RCP), the political-news Web site, and sponsored by ACCCE. It featured a panel that included Sen. Joe Manchin III (D) from West Virginia, a major coal-producing state, and an array of trade and think-tank scholars allied with, or even funded by, energy-industry interests.

The one industry skeptic, former White House official Peter Ogden, was “outnumbered,” as the panel’s moderator, RCP Washington bureau chief Carl Cannon, put it at the time.

In hindsight, Cannon says, more effort could have been made to ensure greater diversity of opinion. “The discussion wasn’t as evenly balanced as we’d hoped,” he said. “As moderator, I tried to establish some equilibrium with my questions, but these things are performance art, and they are live. You can’t always control the microphone as well as you’d like.”

Politico Pro’s forum on federal agriculture policy in November seemed to have its own diversity issues. The event was sponsored by Fuels America, an industry coalition that favors increased use of biofuels, including corn-based ethanol.

The keynote speaker was Secretary of Agriculture Tom Vilsack, the former Democratic governor of corn-intensive Iowa. A later panel included the head of the Corn Refiners Association; Rep. Steve King (R), also of Iowa; the director of biofuels for DuPont, a Fuels America member; the public-policy director for the American Farm Bureau, which backs expanded biofuel development; and the president of the Minnesota Farmers Union, whose national organization is another Fuels America member. There were no representatives of environmental, scientific, farm-labor or fossil-fuel groups; the only potentially anti-corn voice was Rep. Jim McGovern (D-Mass.), the co-chairman of the House Hunger Caucus. (Keynote speakers and panelists are typically not paid for their appearances.)

Politico’s editor, John Harris, said advertisers play no role in designing its events. He defended the agriculture panel, saying, “We had a Republican and Democratic member of Congress who came from strongly opposing views on agriculture policy, and in addition to that, we had the president of the Minnesota Farmers Union, who is often in opposition to corporate farm interests.”

The Post’s editor, Martin Baron, said his newspaper requires “multiple sponsors” for its events “for the purpose of signaling that we welcome, and will include, various points of view” in any discussion, all of which are streamed live and open to the public. The paper’s editorial staff, which directs the events, has rejected sponsors’ ideas for topics before — and indeed has rejected would-be sponsors, too — although Baron declined to cite specific instances.

The Post’s caution is borne of bitter experience. In 2009, in its first foray into sponsored conference and events, former members of its business staff proposed hosting private, off-the-record “salons” at publisher Katharine Weymouth’s house. The idea was to engage business leaders, government officials and some of the newspaper’s journalists in a series of exclusive discussions that would attract a sponsor willing to pay a proposed six-figure price tag, according to a flier promoting the event.

When word of the proposal leaked, it was roundly denounced as an effort to sell access to important Washington players. The Post immediately dropped the idea.

But that hasn’t stopped other publications from using their brand names to draw sponsors and newsmakers to events that are closed to the public.

Forbes magazine convenes groups of up to two dozen “thought leaders” to discuss health care, luxury goods, philanthropy and other topics each year. The sessions are sponsored and off the record, meaning that Forbes doesn’t report what’s said.

The Atlantic magazine hosts a version of The Post’s would-be salons, too. The magazine is the organizer of a series of invitation-only dinners in which about 25 experts and journalists discuss a topic, all of it underwritten by a sponsor. Some of the discussions — such as a recent one in Miami about entre­pre­neur­ship, sponsored by Bank of America — are “on background,” meaning that reporters can’t attribute what’s said to a specific individual (the magazine leaves it up to its business staff to determine whether an event is on the record or on background).

The Atlantic says its dinners differ from The Post’s salons because the magazine doesn’t invite government officials and because the “on background” ground rules enable at least some reporting of the event.

“It is our position that holding select events on background can facilitate a more reasoned debate of contentious issues by enabling participants to go beyond mere sound bites and position-taking,” said Emily Lenzner, a spokeswoman for the magazine.

But the on-background edict leaves the Atlantic’s own reporters handcuffed: Under the rules, not even they can report who said what at an event organized by their own magazine.