Michael Arrington: Editorial Independence
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So Mike Arrington makes a stand for editorial independence. Now for those of you new to this whole discussion, we should note that Mike editorial independence Arrington started this whole brouhaha by the obvious and blatant conflicts of interest he got himself in. Namely he was investing in companies he covers and now is starting a fund that would seem to be dedicated to investing in companies he covers.
After the ny times called him out on the conflict, it was obvious that TechCrunch's claim of it being an independent news source would be utterly laughable. And that probably prompted Ariana to make her move.
And now Arrington is making a bold stand by resigning in the name of "editorial independence". Probably he did not have a choice but to resign, not because of editorial independence from Ariana Huffington, but because of editorial independence from his own conflicts of interest. But by making this stand he very cleverly tried to divert the attention from his own fuckups and poison the waters for whoever Ariana tries to appoint to lead TechCrunch.
Now I would like to say I am not on Ariana's side. I wanted to point out the blatant hypocracy of Arringrton, but Ariana's career is so full of double dealing and questionable behavior that I doubt TechCrunch would be better with her. Like I said, it is the Raiders playing the Broncos, and I am not choosing sides just enjoying the violence.
Arrington: I'm going to start raising a fund, with the Crunch name and telling investors they'll get privileged access to TechCrunch and covered companies.
Ariana: Pffth! GTFO!
Arrington: Editorial independence! Help, help, I'm being repressed!
This from the guy who's started thumbing his nose at AOL the day they bought his company. Even started a feud with Engadget accusing them of some underhanded BS that ended when AOL had Arrington's back and most of the Engadget team quit.
AOL keeps outdoing itself in its search for the most annoying new media personalities to bless with a cashout and one-way trip to oblivion (Calacanis, Huffington, Harrington). And they keep laughing all the way to the bank.
A journalist is always getting spin from insiders, and then has to write the story that's true and complete, that engages readers. You're always making a deal with the source, I'll help you get your side out, if you help me get the story closer to the truth. Debunking spin is generally not a way to keep your sources talking to you first, or writing what readers and advertisers want.
That being said, I don't see how you can be a VC, on the board of companies and privy to all their inside dope, and at the same time be a journalist whose job is ferreting out the inside dope from everybody else (including possibly competition) and sharing it with the world and passing judgment on them.
You can't be an insider and an outsider at the same time. You can be a VC, with fiduciary duties impacting your own and your investors' wealth, or a journalist, whose duty is to inform readers as much as possible, but not both.
This reminds me of Henry Kissinger's realpolitik comment on the Iran-Iraq War of the early 1980s: "Pity they can't both lose."
Anyone who knows a fair bit history around Techcrunch would assume this by default.
However, I don't see how anyone else (and least of all, the owners of TechCrunch) can ignore those two matters - and the resultant impact on the credibility of TechCrunch.
Ultimately, Arrington made a conscious decision to sell TechCrunch to AOL. He made another conscious decision to become the founder of CrunchFund.
The two-option ultimatum in his post seems like simple posturing. It seems like he is ready to finally leave TechCrunch, but doesn't want to frame it as a simple matter of leaving TechCrunch to become a full-time investor (who also blogs - the Fred Wilson model).
this point however is pretty fascinating "Sell TechCrunch back to the original shareholders". I wonder if he'd be willing to put a number on that sale?
I wonder about this. Even if you accept the premise that his priority is now his fund, it seems like Mike's formally leaving TechCrunch could have a nontrivial impact on "CrunchFund's" deal flow?
No, he's a brand unto himself and he knows it, and is cashing in on that in an admirable way (from a game-theory perspective at least)
- The New York Times has invested in technology companies like AdKeeper, Automattic, Ongo, Brightcove, Federated Media, and funds like Betaworks (which is in dozens of startups in all kinds of fields). Have their reporters ever received tips and information about upcoming companies and tech launches because of these connections? Do they get written about more often than your average startup? You better believe it. If you look through their coverage of these companies they imperfectly acknowledge their involvement (even the ones they've invested in directly).
Federated Media (2 years after an investment by New York Times): http://www.nytimes.com/2007/06/30/technology/30online.html?s...
BrightCove article that was published without due diligence and later corrected eight days later: http://www.nytimes.com/2011/01/23/business/23corner.html?sq=...
GroupMe article where they mention that the company has taken $12 million but neglect to mention they were part of the round through Betaworks: http://bits.blogs.nytimes.com/2011/08/21/skype-plans-to-buy-...
These were just three examples I pulled quickly (I sincerely apologize for using these companies as examples since this has nothing to do with them). Do your own search for any New York Times invested or Betaworks company on nytimes.com and you'll see what I mean. Does this change their coverage of other competing tech companies?
Funnily enough, the best resource to follow these connections is Crunchbase: http://www.crunchbase.com/company/newyorktimes
- The New York Times has their own internal division that develops software products and services that other publishing companies and media companies buy. Does this change their coverage on competing technologies and competitors?
- The New York Times owns a diverse set of businesses in competition with Aol's current strategy including about.com. They also own a chunk of the Boston Red Sox.
I'm going to be blunt. I don't think the New York Times is shady enough to let this change their coverage despite their obvious conflicts of interest (in the BrightCove article in their 8 day later correction stresses that "The New York Times Company owns a small stake of less than five percent in Brightcove". I doubt Michael Arrington owns 5% of any startup he's written about). And since TechCrunch has had (if anything) a policy of more transparency and disclosure than the Times has had, I can't for the life of me see what all the ruckus is about.
My disclosure: I am tangentially connected to most of these companies by investment, friendship, or business relationships and I think the world of them. OwnLocal also works with all kinds of newspapers and publishers as a matter of course.
http://www.nytco.com/press/ethics.html#keeping
"44. Staff members may not engage in financial counseling (except through the articles they write). They may not manage money for others, offer investment advice, or help operate an investment company of any sort, with or without pay. They may, however, help family members with ordinary financial planning and serve as executors or administrators of estates of relatives and friends and as court-appointed conservators and guardians."
"They may not offer ideas or proposals to people who figure in their coverage or make investments in productions in their field. (Food writers and editors may not invest in restaurants.) "
Etc etc.
The New York Times company owns a lot of stuff. So does AOL. AOL running an investment fund isn't shady in the least. Having an employee who covers tech startups on one of your media properties run a fund for you that invests in tech startups... Big difference. You don't see whoever's job it is to invest in Automattic at the NY Times out there writing A1 on the technology page.
The main difference here is there is a strict firewall at the New York Times Company and not at TechCrunch. Forget disclosure, the NY Times would never let Mike have the startups beat in the first place because of his personal investment activity. Make that professional investment activity and it's just that much more unacceptable.
The reality is that this is a distinction without difference today (especially when editorial is mixed with reporting). Disclosure should be part of every article, op-ed, or editorial. As far as I'm concerned, TechCrunch is actually setting a more rigorous standard than the Times is for future media.
The NYT doesn't let their reporters trade on companies they cover. Would it seem strange to you if a NYT reporter was hired to simultaneously manage a venture fund to invest in companies that are on his beat?
I know that this is TechCrunch, but do we really have to be exposed to the drama that is normally reserved for office politics? Or is this all just an attempt to give Arrington, et al. cover for when this whole thing just blows up?
Or, it could all be for the pageviews... has it been a slow news month?
Correct me if I'm wrong, but Mr. Arrington is an implicit investor in YC, through the Angel Fund, and Techcrunch gave the YC startups a ton of coverage lately. The few articles that I read in the early going made no reference to this fact.
I've seen far more bias from the mainstream press tech reporters towards certain startups. All these journalists seem to be hired by a number of startups. Seems like some are just reporting to help their career.
I wrote an article about it here: http://blog.imranghory.org/michael-arringtons-unsolvable-con...
You don't have to obtain a license or agree to uphold any particular code of conduct to be allowed to write about news for the web. You just write, and if people value what you have to say, they read. Arrington even had signoff from the CEO of AOL saying he could do both.
That's not to say that Arrington is completely in the right in this. Many reasonable people seem to be worried about the conflict of interest, so there's a good chance that it's in AOL's interest to dispose of him to avoid worse PR. But I think he absolutely went into this thinking that he could keep doing TechCrunch.
I lived with a capital J journalist for a long time and got to know a lot of his coworkers and contacts, and I was really quite surprised at the lengths those people go to maintain their journalistic integrity. They would not simply disclose conflicts of interest, they would completely avoid them. For example, a lot of them would not even vote in elections or invest in funds that could even potentially contain stock in companies that they could even possibly cover in the future (regardless of whether or not they were even working in that field!). To the individuals that subscribe to that system, Arrington's position as an editor of a tremendously powerful tech news source and an investor in tech companies is absolutely irreconcilable.
I think it's unfortunate that a lot of people really have little comprehension of what this so-called "capital J journalism" is about. In fact, it's pretty sad that someone in MG Siegler's position would even draw such a distinction. There is no such thing as capital J journalism. There's journalism, and then there's bullshit.
edited: originally I referred to Siegler as MC Siegler
(I'm not equivocating)
You and I may think there's something seedy and questionable about writing for a trashy tabloid, but it's not up to us what other people want to read.
The New York Times' article about Arrington's questionable ethics was written with the general public in mind, most of whom probably know very little about TC and Arrington. If nothing else, now when they see a TC reference or an Arrington byline in some other venue (or if they click on a link directing them to TC), they'll take whatever is said with a grain of salt. Perhaps that's what you mean by "smart audiences can deal with bias." Unfortunately that doesn't change the fact that even the smart people need a reliable efficient source for startup news that isn't being delivered by people with a monetary interest in what they're covering... Obviously most of the people that are reading HN have enough interest in startup and tech news that they're willing to filter primary sources themselves. But what about someone in another field? Don't they deserve an unbiased, reliable, and informed source?
> "I Sold My Company (to a Bunch of Idiots) and Expected to Still Maintain Control Over It."
With any knowledge of recent history, it is boggling anyone thought this acquisition would work and I don't believe for a second Arrington is writing in earnest.
Reddit would be an anomaly, I'm happy to say, although it still has a ways to grow out of its niche.
I do think Arrington should not have named his fund CrunchFund. Techcrunch runs a database about companies and people involved in the tech industry called Crunchbase. This brings us to a different question. Michael earlier had a plan for a tablet called CrunchPad, which didn't materialize when he had a fall-out with his technical partner. Does the brand name belong to the company or to the founder ? No matter who owns the trademark and other legal stuff, I believe it should stay with the company.
This latest breathlessly pissed off post demonstrates Arrington can still post anything he likes to TechCrunch.
So why not write a clear and concise explanation on TC to begin with?
I'd submit that Arrington is ready to leave TC to focus on investing, and there's no better way to do that than with a massive page-view heavy controversy.
It's still ball-sy and more than 99.99% of people in the business would do and yes, for that he gets respect points. Like it or not.
If Aol is listening they need to put distance between themselves and Arrington, not get closer.
“TechCrunch is a different property and they have different standards… we have a traditional understanding of journalism with the exception of TechCrunch.”
This is a disaster of AOL's making, not Arrington's.
Seems to me like he is making a hands-off comment with regards to TechCrunch, as in - we wouldn't allow an editor of a regular property to invest in companies they write about, but TechCrunch has different rules.
This wasn't something that Arrington just announced out of the blue that AOL has to scramble to react to. Armstrong was active in setting the whole thing up, and AOL was investing in the fund. They knew this was happening way in advance, and announced it with Arrington. Then everything went to hell. To whatever degree this could possibly be construed as Arrington's fault, it must also be seen as at least equally AOL's fault.
The correct time for this kind of acute episode of journalistic integrity was before cashing the AOL check, not after. He was under no pressure to relinquish his independence.
More likely he sees an opportunity to head for the exit with at least one suitcase still full of money.
AOL says F* You Arrington, does what they want since they bought tech crunch and they own it. The past shareholders have no ability to recall the buyout almost a year later and say nevermind we want our company back.
Reality is Arrington sold, Arrington started a new fund. People think this new fund will interfere with Arrington's "Editorial Independence" therefore they claim he will be gone.
At the end of the day it just does not matter that much, If Mike is who he thinks he is he could just go start another blog tomorrow and gain all the traction he wanted. His non-compete (if applicable) is probably non-enforceable after the first twelve months anyhow.
If he is not then he should just go back to his new fund and invest in some startups loudly (which is the Arrington fashion) which is probably what he will do best
That said, I really don't see why Arrington would want to try wearing both hats. It brings a huge magnifying glass onto the bias in his articles, and possibly the articles of all those at TechCrunch.
A set of "rules" that sounds good to outsiders but lets insiders do what they want.
Most "code of ethics" make it easy for insiders to call outsiders "unethical" for doing things that insiders do.
For example, "journalists" are allowed to make up quotes. Outsiders aren't.
It's very interesting to see the internal politics spill out on the main page, and it's fascinating to see the struggle between the competing entities after an acquisition.
I think many/most other media acquisitions would have squashed this - imagine any of News Corp media outlets EVER writing/reporting a negative story about News Corp, and the same would go for NBC and MSNBC of GE, and all the others.
I must say, although it can be construed as just grandstanding and attention grabbing, Mike and the TC team have gotten a few extra points from me over these episodes.
Sure, they may have overdone it at times, but it couldn't have been easy for Arrington to stand by and watch his reporters str8 up tell his new overlords "Fuck Off" (literally - one of TC's bloggers tweeted that, can't remember which one).
Glad to see them publicly wrestle with their independence. There is something brave about doing it in public.
However, I do enjoy his site and prefer its raw ethical nature. They promised editorial independence and this should remain true. I have to side with Arrington. That being said, I don't believe pushing this issue publicly like this is going to help one bit. I'd bet that AOL sees this post and considers it insubordination leaving them with no choices but let him go (if that's even possible?)
One thing I hate about the "big guys" in news is that it is the news "they" want you to hear, and I hate that. If Arrington leaves TechCrunch, and the ethics behind TechCrunch leave with him, I will no longer visit the site.
Aren't these two separate issues? I don't understand how AOL having some editorial control over TechCrunch has anything to do with TechCrunch following standard journalistic ethics with regards to conflicts of interest - unless TechCrunch feels it should have the independence to not disclose conflicts of interest.
Why?
I think a better question is why wouldn't he want it to escalate?
a) Get AOL to bow down to his rants (Charlie Sheen anyone?) and "reimplement" those boundaries. Basically he wants to stick it to the man that gave him 30 million to prove hes bigger than the man.
b) buy TC back from AOL, probably for half as much as they paid.
Inside I am sure he is thinkin this is awesome cuz either way dude walks away with 8 bajillion dollars, synonymous popularity in tech world and every chance in the world to start another uber blog/mediacompany/empire.
Plus, he can pull a Steve Jobs even if he does quit, and resurrect the company at any time he wants to after AOL buries it and Ariana becomes Co-Editor..
[1] http://www.theatlantic.com/business/archive/2011/09/steve-jo...
selling overpriced dialup to old and ignorant people
(not a joke)
Correct me if I'm wrong, but I'm pretty sure AOL just told Arrington they didn't want him to have any significant role at TechCrunch going forward.
Techcrunch is an interesting read now and then and certainly draws people that love what they do and others that don't. Lots of trolls anytime Steve Gilmour or MG Siegler post, it is the nature of the Web.
This very much seems like a spat between Arriana Huffington and Michael Arrington, both of which have very public forums to address their sides. At the end of the day, if the paperwork signed says that TC was to have "editorial independence" from Huffington Post, then AOL needs to address that. If it doesn't, then the parties involved need to figure out how to salve the assorted egos.
The CrunchFund thing? I get the impression that Armstrong and Arrington get along and Armstrong/AOL see the Crunchfund as a way of getting AOL (event at a distance) more involved in developing new companies. Does it make things more complicated? Probably.
It will be interesting to see how this plays out.
AOL now owns TC indirectly, as Mike is the middle man.
sigh...