Take a look at the first 3 minutes of NightLine (Koppel) tonight, if you dare (Early Barf Alert).
Posted on 07/18/2002 7:39:16 PM PDT by kattracks
The New York Times has repeatedly hammered Enron Corp. for its financial scandals. Today the Washington Post revealed that the Times was in bed with Enron all along.
And that's just one of many examples it dug up of corporate greed and hypocrisy by Big Media.
Five years ago the New York Times Co. struck a "newsprint swap agreement," a financial deal in which no physical assets changed hands, with the Houston energy company.
"The Times-Enron deal was disclosed in the fine print of the newspaper company's Securities and Exchange Commission filings but not in editorials that slammed Enron for 'accounting shenanigans' and other financial misbehavior," Howard Kurtz writes in today's Post.
"The Times is hardly alone. Many of the media companies that have been reporting on - and often criticizing - corporate accounting and the aggressive use of stock options engage in the same practices themselves, according to federal records."
Do as They Say, Not as They Do
In fact, the Post itself opined in April that the "rules - which allow companies to grant executives and other employees millions of dollars in stock options without recording a dime of expenses - make a mockery of corporate accounts."
Kurtz had the guts to zap his own liberal newspaper. "But The Post Co. has been doing the same thing, boosting its reported income by $3.6 million last year by not counting stock options as a cost of doing business."
Goodness, there must be a lot of red faces at the Post. "The company announced Monday that it will begin listing stock options to executives as expenses."
In another editorial, the Post hailed a "sensible" Senate bill that "would restrict accounting firms' ability to provide consulting services to clients whose books they audit." Oops: It turns out that the Post Co. paid its auditor, PricewaterhouseCoopers, $626,000 in consulting fees last year, as well as $880,000 in audit fees.
Oh, That Media Corporate Greed
The left-wing Detroit Free Press editorialized that "stock options seem to inspire accounting games that help boost the stock price ever higher as top executives cash out for their own benefit." The newspaper's parent company, Knight Ridder, awarded CEO Tony Ridder 150,000 options last year, valued at $10.6 million.
And how about the Chicago Tribune? It said in a March editorial: "Put stock options on the books. The use of stock options as part of compensation packages has exploded, partly because of the 1993 rule that limited tax deductibility of executive salaries once they exceeded $1 million."
Kurtz notes: "But the Tribune Co. did not count as expenses substantial stock options to its top executives, including Chairman and CEO John Madigan, who received $5.3 million worth of options last year. Madigan exercised $1.8 million worth of options in Tribune shares. Company spokesman Gary Weitman defended the use of stock options but acknowledged that 'there are good points on both sides of the debate.'"
Other media giants that do not count stock options as a corporate expense: CNN parent AOL Time Warner, NBC parent General Electric, ABC parent Disney, CBS parent Viacom, USA Today publisher Gannett Co. "This method enabled Viacom, for example, to boost its reported income by $118 million last year," the Post reported.
'Inconceivable'
As for the Times: "In a newsprint swap, described by the Times Co. as a 'cash flow hedge,' a publisher and a trading agent such as Enron lock in a fixed price for newsprint over several years. If newsprint prices go higher, the publisher gets a rebate from its trading partner; if prices drop, the publisher pays a rebate. The idea is to help even out the newspaper's costs over time."
Times mouthpiece Toby Usnik huffed, "It might not have hurt to mention the relationship more - had our journalists even been conscious of it - but it's inconceivable that anyone will think our journalism was influenced by such a development."
Read more on this subject in related Hot Topics:
I'm so shocked -- a newsprint deal.
Big Media has done far worse than this. They sold out our countries interests and the interests of freedom a loooooong time ago.
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