John Drinnan: Throwing away key to the lockup

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How could a journalist have thought they could leak bank’s decision?
It appears unlikely that Reserve Bank governor Graeme Wheeler will address any more pre-announcement lockups. Photo / Mark Mitchell
It appears unlikely that Reserve Bank governor Graeme Wheeler will address any more pre-announcement lockups. Photo / Mark Mitchell

It's easy to see the leaking of an official cash rate decision from a Reserve Bank lockup as a one-off mistake by MediaWorks - and it's one that won't be repeated.

The Treasury has told media that the traditional lockup for the Budget will continue, unaffected by the OCR leak, but it's unlikely the bank's lockups will ever return.

In my opinion, the leak is a sign of the risks newsrooms face as they cope with commercial challenges and technological disruption.

Still - three senior staff were involved. You wonder, how could any journalist for a national media organisation not know that they can't relay OCR lockup info to colleagues?

I understand one relatively junior staff member has since left the company.

Lockups have long been valued by media and financial analysts, to help them understand things such as Budgets and Reserve Bank decisions, so they can swiftly give informed commentary as soon as the embargo is lifted. But that advance knowledge creates the opportunity for people to trade on the information - though the Reserve Bank is confident that did not occur in this case.

One of two MediaWorks staff breached the rules and emailed details to colleagues.

MediaWorks' acting head of news, Richard Sutherland, said in an April 14 statement: "The leak was caused by a failure within news to follow proper process and changes have already been made as a result.

"We are addressing the breach with those concerned and news policies and training will be implemented moving forward."

MediaWorks yesterday said there would be no further comment.

Economic risk

The Reserve Bank believes New Zealand has been a rarity in allowing early access to central bank decisions by holding a lockup, and bank spokesman Mike Hannah confirmed that it had been considering the lockups' survival for a long time.

Veteran Herald economics commentator Brian Fallow said lockups remained secure for a long time because media knew how serious a breach would be.

"For a journalist caught out in such a breach it would be a career-ending event, would shut out the media concerned and be a commercial disadvantage. In his view, said Fallow, "MediaWorks gets away with a mumbled apology and suffers no commercial harm at all."

A big loss?

Media organisations such as the committee for Media Freedom and Radio New Zealand have asked the Reserve Bank to change its mind, but the bank has made it clear that it is not about to reverse its decision

Outside Wellington there appears to have been less upset in the media.

One senior news executive said openness was good, but the lockup had not been seen as a great advantage.

The ANZ's chief economist, Cameron Bagrie, said there would now be a 5-10 minute lag while the market economist tried to work out the spirit and real message beyond the decision itself.

At the margin, this might add to market volatility around the decision, he said.

I asked Hannah why the bank had not named the person concerned and he said MediaWorks had not told them all the people involved and it would have been unfair to single out one person.

MediaWorks rejected this comment and the suggestion that the company had not been fully helpful to the bank.

Inspirational PR

In my opinion, the cancellation marks the end of an era for New Zealand media, and for a system that was relaxed about relying on promises of confidentiality.

As technology spreads and the demand for content grows, there is a temptation to let traditional values slip.

Another issue affecting traditional news values is the development of stories that promote brands.

They are sometimes a necessary part of news, and media are usually careful to identify commercial arrangements, but news organisations have to ensure that upbeat stories fed to them by PR agencies do not become commercial promotion.

To me, a One News item about "the cult of Kmart" was striking. The item, by star journalist Rebecca Wright, was a PR dream come true.

It raved about Kmart's phenomenal success, and about some "hexagonal candle holders" that were said to have had the public consumed by excitement. Consumer blogger Melissa Jack struggled to contain her enthusiasm about the "reawakening and rediscovery of Kmart".

According to Wright, "Kmart is cool again".

It sounded like a promotion, not an item on the state-owned broadcaster's main news bulletin.

It appears this plug was not bought; I am told the Kmart item grew "organically" from newsroom chats.

PR-inspired "news" has been around a long time, but it's worrying that commercial puff pieces are seen as normal.

A TVNZ spokeswoman said Kmart's rejuvenated image and its turnaround as the result of its "cheap chic" homeware was being recognised internationally and this was why the team did the story. The fact Kmart was not previously considered "cool" or "chic" added a newsworthy twist to this story, according to an unnamed news executive.

"ONE News covers many retail stories which feature one company, as in when Apple releases a new iPhone, Lewis Road Creamery releasing its chocolate milk or Topshop opening its first NZ store on Queen Street," said TVNZ.

"These stories are important retail developments both here and overseas and of interest to consumers."

I'll let you be the judge. Have a look at: tinyurl.com/zm5xsh3

- NZ Herald

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John Drinnan has been a business journalist for twenty years, he has been editor of the specialist film and television title "Screen Finance" in London, focussing on the European TV and film industry. He has been writing about media in New Zealand since the deregulation of the television industry in the late 1980s.

Read more by John Drinnan

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