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Paying the piper

Does sponsorship of news damage Reuters’ reputation for editorial integrity? Or is acceptance of another company’s money to support the agency’s central purpose an inevitable consequence of rising costs of news gathering and falling revenue in a diminishing market for news products?

The questions arise because of the revelation that Reuters coverage of the US presidential election campaign is sponsored. Campaign reports and photographs have been published carrying an advisory that states: “SAP is the sponsor of this content. It was independently created by Reuters’ editorial staff and funded in part by SAP, which otherwise has no role in this coverage.” The sponsor is a German multinational software corporation.

It was noticed by a former Reuters editor who brought it to the attention of The Baron, which then posed six questions to Reuters’ editor-in-chief in New York about sponsorship and Reuters’ independence. The editor-in-chief discussed the matter with a visiting corporate relations executive who sent a response that asserted the primacy of the Thomson Reuters Trust Principles of independence, integrity and freedom from bias. The executive explained the sponsorship as follows:

“A company associated with a news report that is labeled as ‘sponsored’ is no different from any advertiser wanting to be associated with a great news site or news publication.

“An advertiser, or ‘sponsor’, has no involvement in the content of any Reuters news article; advertising and sponsorship is a commercial proposition which can bring in funds that allow Reuters to cover a wider range of topics, or deliver that content to a wider audience, that may not have been economically viable otherwise.

“All aspects of our editorial decision making however remain consistent with the Trust Principles whose safeguarding is our top priority.”

The reference to covering a wider range of topics or delivering content to a wider audience is strange: a presidential election is one of the biggest stories covered by any news organisation that wishes to be taken seriously in the United States. Its audience, both domestic and international, is huge.

Campaign coverage is an expensive operation requiring teams of journalists - reporters, photographers, camera crew and editors. The timetable of presidential elections every four years is known and unchanging so there is ample of time for careful editorial planning and budget allocation. Never before has it required sponsorship to cover such a significant story properly and from all angles.

Advertising on the Reuters website is not new. Many companies recognise the value of being associated with a great news site and a brand respected globally as a byword for integrity and reliability.

Display advertisements have appeared on for some years, as have sponsored sections. An executive who was involved in drawing up guidelines for these said the original decision was "Do we sell ads on at all? Is it a consumer product?" Once the answer was yes it really didn’t matter if the ads were sold one at a time or section by section, the executive said.

But the concept of farming out a whole slice of the news file, as it was put by the former Reuters editor who first noticed the sponsorship, is more recent.

Another former editor suggested that the trustees of the Thomson Reuters Founders Share Company, guardians of the Trust Principles, may want to appoint an independent ombudsman to ensure there is no influence from sponsors (and, equally, customers and advertisers). It would be a hands-on role that would report to the trustees and have a roving brief with untrammelled rights of access to monitor editorial ethics across the company, the former editor suggested. Even announcing such an appointment could help the brand and deflect concerns.

In media companies around the world, these are desperate times. Newspapers are having to come to terms with the realisation that, although the Internet provides a valuable shop window for their product, digital revenue will never offset the decline in print revenue. Therefore their cost base is unsustainable.

At Reuters no less than at other news organisations, cost cutting is the constant watchword.

Waves of workforce reduction - through attrition, buyout, redundancy or sacking - have been a recurring feature of life at Reuters since the takeover by the Thomson organisation in 2008.

Headcount cutbacks continue. Miami, for example, has been reduced to only stringers, and soon there will be just one international correspondent in Buenos Aires, an editor with knowledge of the changes said.

Severance can be brutal. In the latest phase of removing costs from the Thomson Reuters balance sheet, one journalist in the United States was summoned to a hotel a 40-minute drive from the bureau and handed a layoff package in the lobby. Another one was terminated in a room rented for the day. Yet another got only as far as the hotel lobby before being given the bad news. The joke going the rounds among journalists in the United States is that, to save money, the next one will take place in the hotel car park.

Reuters’ US presidential election coverage includes sponsored reports ■