Business

Covering Business

Business stories can be found in everything from babies to wars, i.e. what industries are affected by each? What's the money angle? Every organization will take and spend money, some for profit and some nonprofit.

Business stories put things into context for the public and showing how events will impact the public. Large dailies have a business section everyday. Typically reporters on the business beat earn more than everybody else. Online sites link to business stories or only cover business news.

The Business Beat

The following stories can all be considered part of the business beat. Media with large resources will divide the business beat based on the paper size and the number of businesses or industries in the area. The following are the key beats media typically consider:

Economy beat - makes sense of the many, often conflicting, reports issued by the state and federal governments assessing the status of unemployment, consumer confidence, consumer spending, gross domestic product and sales of durable goods. Reporters on this beat must NOT be afraid of numbers.
Markets beat - analyzes movements in major stock markets (e.g. Dow Jones, New York Stock Exchange), looking for trends that give clues about the future direction of the economy. Comfort with math benefits a reporter on this beat.
Technology beat - sometimes divided into specialties (e.g. computers, video games, cell phones, etc.), this beat runs the gamut of reporting company-specific news, such as earnings and new products, to spotting and exploring new trends. These reporters must LOVE gadgets.
Auto beat - not just for gear-heads, it includes trends in auto sales, rebates and incentives, automakers' earnings, environmental issues and government regulation, consumer safety, corporate intrigue and new products.
Health care beat - rather than covering the disease of the week, this beat explores issues related to the rising health care costs and the impact on consumers, companies and health care providers.
Real estate beat - perfect for those wanting to know how much their neighbors house sold for and whether houses in the area are increasing or decreasing in value. This beat explores trends in housing sales, office vacancies and mortgage rates, as well as breaks news on major real estate sales or development plans.
Transportation beat - covers airlines, railroads, shipping and ports. Story topics include airline flights and traffic, company performance, corporate leadership, union contracts and consumer pieces on prices, security and even airline food.
Sports beat - the business of sport demands coverage of the buying and selling of professional franchises; their financial dealings with states, vendors, sponsors and lenders; the corporate endorsements of professional athletes. Knowledge of sports is helpful.
Retail beat - covers a mix of industry trend stories, company-specific news and consumer-driven stories. Typically, news of retail sales provides a good indicator of the state of the economy. Individual retailers are important to a community. As consumers, readers want to know retail trends, store openings or closings, and changes in the sales tax.
Energy beat - ranges from companies producing power to environmental groups that monitor them. Environmental issues (e.g. development of alternative fuel sources) might overlap this beat.
Legal affairs beat - makes sense of the allegations against corporations and government efforts to rein in the abuses of Enron, Worldcom, Martha Stewart, etc.
Media beat - covers issues related to newspapers, television and radio ownership, advertising and influence. Hot recently with so many media mergers and FCC proposals to limit media ownership.
Personal finance beat - very consumer-oriented, it helps people spend, save or invest money wisely.
Labor beat - depends on the region of the country, but labor becomes important in Northeast and Midwest with stories related to organized labor, including pay, benefits and working conditions.

Key Documents on the Business Beat

Documents provide details about a company's health and wealth. You must know which reports companies file, what deadlines exist and when you can access the reports. Publicly traded companies must file a series of reports in timely fashion to help investors understand what's happening to them. These documents go the the Securities and Exchange Commission and can be accessed through the Web.

10-Q: These quarterly filings appear when a company reports its quarterly earnings. While not audited, they provide a good idea of what's happening with the company. It also features balance sheet information.
10-K: The annual report for the company, which is audied by an accredited accounting firm so the numbers are reliable. It also includes a discussion of how the year went, but is more thorough than a 10-Q because it's the big report of the year. It also details any litigation the company faces.
8-K: When something newsworthy happens to a company that investors want to know, the company must file an 8-K, which deals with events that would have a material effect on a company's outlook, e.g. a profit warning, executives leaving, or the awarding of major contracts. The 8-K almost always guarantees news.
DEF-14A: a.k.a. "the proxy statement," it lists names of people up for election to the board of directors, entertains shareholder proposals, and outlines other business. It includes key information on who holds the company's shares, what the officers are annually paid, and the company's stock incentives. It might be the most important document a company produces.
Form 4: it must be filed when company officers or the board of directors buy or sell stock. If the president is dumping stock, typically bad things are happening. If officers are buying lots of stock, they're betting the company will do well.
11-K: Like an annual report (i.e. 10-K), it deals with stock ownership plans and how that's going.
S-type forms: prospectuses on either a brand-new stock offering for a public company or a new securities offering for a company already traded publicly. These often include key information on the state of the company and why it is going to the market for money.

As noted in Intro, stories on business earnings reports are the same ole, same ole, i.e. you watch essentially three sets of numbers: total revenues for the quarter (retailers call them total sales), net income or loss, and diluted earnings per share (i.e. the amount that each share would earn if the profit were divided among all outstanding shares of common stock plus all stock warrants, stock options, preferred stock, etc. In each case, the numbers for the just-completed quarter are compared with the same quarter from a year ago to give a sense of the company's direction.

It's not enough just to look at profits and losses, e.g. Time Warner Inc. might post a loss, but if it's smaller than a year ago or if the loss is less than expected, that can be good news. Similarly, a company might post a profit, but if the earnings per share are less than expected or forecast, even an increase can be considered bad news.

Key Players for the Business Beat

Board of Directors - a group of individuals elected by a corporation's shareholders to oversee the company and appoint senior management, issue stock and declare dividends. Top executives usually sit on the board as inside directors. Outside directors from other businesses of from the community also serve on the board to advise on policy matters, and are paid a set fee for each meeting attended.
Chairman of the Board - the highest ranking corporate officer, typically the company's top executive.
President - the second-highest ranking officer after the chairman of the board. Appointed by the board, the president reports to the board. In smaller companies, the president is usually the chief executive officer; in larger corporations, the chairman of the board is the CEO, leaving the president as chief operating officer.
Chief Executive Officer - The executive chiefly responsible for the activities of a company; usually an additional title held by a senior officer such as the chairman of the board or president.
Chief Operating Officer - The executive chiefly responsible for the day-to-day management of the company.
Chief Financial Officer - The executive responsible for handling funds, financial records and financial planning.
Board of directors members - a broad-based group appointed to set policy and advise company executives, who come from the corporate, civic, government or education sectors.
Media relations personnel - they handle reporters' inquiries, providing background in addition to fact sheets, news releases, copies of executive speeches and other materials to help a reporter learn a company.
Employees - department heads should also be cultivated but may be hard to reach, depending on company size. Look for employees willing to talk, but if a disgruntled employee, investigate before writing a story.
Consumers - the people who spend the money at the store add the personal touch to business stories. You MUST get permission to interview people in private locations, such as malls or eateries -- or wait in the street on city-owned property.
Forensic accountants - they look at financial reports and determine a company's health, if a company is reporting income and expenses correctly, or if the numbers just don't add up.
Analysts and economists - employed by banks and brokerage firms, they study a particular company or market sector, such as technology stocks, large retailers or oil and gas companies. Typically, they're happy to talk with reporters and their comments provide balance.
Federal agency staff members - staffs at the agencies that oversee businesses, such as the SEC, FCC, FTC or Federal Aviation Administration.
Experts - University professors, independent consultants and private investment advises provide perspective for a news story.
Union leaders - If there's an employee's union, leaders provide another perspective in addition to the expected topics of contract negotiations, benefits and working conditions.
Financial services - e.g. Bloomberg or Dow Jones. Though expensive they provide a wealth of information on publicly traded companies, commodities (e.g. gold or oil), bond markets, foreign currency exchange rates and more.
Specialty reporters - if you're at a smaller newspaper, consult a reporter at a larger paper who has covered the story for awhile. They're typically willing to share information and coach new reporters.

STORY IDEAS

Bankruptcy Filings - companies go out of business through Chapter 7, Chapter 11 and Chapter 13 bankruptcy proceedings.
-- Under Chapter 7, individual debts are eliminated, but they have to sell or liquidate their assets or property. Once filed, you cannot file Chapter 7 again for six years.
-- Under Chapter 11, individuals with a lot of debt or businesses come up with a plan to reorganize debt.
-- Under Chapter 13, individuals or business set up a plan to repay creditors, usually on a monthly plan.

Cyclical News
- earning reports
- annual meetings
- holiday sales
- back to school sales
- seasonal influences (fall tours, summer vacations)

If you don't understand something in this Web note, please e-mail Dr. Sitton.