SeanReadsTheNews

Portfolio's Brancatelli Sizes Up The State of Air Travel

Portfolio's business travel columnist wrote his "Year in Travel" piece late enough to reflect last weekend's terrorist attack on Northwest Flight 253, putting an exclamation point on what was already a witty review the state of business travel and how it's only going to get worse.

It's been another bizarre 12 months for business travel. But that shouldn't surprise you. It never surprises me because I've come to the same conclusion after each of the thirtysomething years I've been on the road.

Odd as it may be, though, business travel is nothing if not instructive. You learn things. Rarely good things, I admit, but you learn nevertheless. Here are some of the hard lessons I learned in 2009. I don't expect 2010 to be much happier, but I'm open to the prospect of good news. Honest, I am. It would be a nice surprise.

Brancatelli flies by kabuki security at airports, airlines' inability to keep planes in the air without "horny bankers," skyrocketing executive pay compared with shrinking compensation for the line employees who have to deal with travelers and more while also tweaking non-specialized reporters for buying industry b.s.

Frequent flyers are poorly served whenever the mainstream media covers business-travel topics, and 2009 proved again that reporters and editors who sit behind a desk and make believe they understand life on the road do more harm than good. The general media continued to buy the hype and fantasies fed to them by the supporters of the hopelessly inadequate "registered traveler" programs right up to the June day that the largest provider, Clear, abruptly shut down.

And my friends in the mainstream media continue to support the meme that airlines imposing checked-bag fees are racking up huge gains. In fact, the opposite is true: Carriers that charge bag fees have watched their overall revenue plummet in 2009. Yet JetBlue Airways, which still allows one free checked bag, and Southwest Airlines, which maintains its two-bags-free policy, are winning passengers and revenue. Southwest's gains are especially notable. It registered a startling 11.7 percent increase in revenue passenger miles in November, even though its overall seating capacity dropped by nearly 8 percent.

All in all, the column is just the tonic for the often-horrible experience air travel is in 2009.

Washington Post Roasts AIG: It's All Over for PR Once the Press Has Your E-mail

Reading Brady Dennis' long and winding review of AIG e-mails prior to its implosion in the mortgage meltdown is a bit like watching the scene in the movie "Robocop" where Peter Weller's character is shot to near-death by hoodlums.

By contrasting public statements with private e-mails, Dennis' article reveals arrogance that is common in successful enterprises about PR - at one point an executive blows off a Wall Street Journal expose as a "non-story."  The article also identifies real legal issues, such as when the executives writing those e-mails became aware they had a material-level problem on their hands and did they follow the law in disclosing it.

In between, the reader gets an inside look  a the back and forth that takes place in crafting communication strategy that isn't illegal or dishonest but is a natural Socratic method for getting at the best way to get across a viewpoint.

Cassano remained upbeat about his firm's long-term prospects. In a late October e-mail to Habayeb, AIG chief risk officer Robert Lewis and others, he proposed a passage for an upcoming presentation saying "the continuing turmoil and general risk aversions" had left the firm with "significant opportunities" and "well positioned for continued revenue growth as competitors' appetite for certain transactions wanes."

Having all the interim steps made public after the fact would be damning no matter what the result.  Any article that starts with a debate about whether the leaders of a firm of AIG's stature are delusional or dishonest can only go one way.  They are already way past the tipping point where the goal of PR is no longer to preserve reputation but rather to keep the clients out of prison.

Fortune: Urban Farming Plans for Detroit

Regular readers will know I'm a sucker for a good real estate story and Fortune's David Whitford delivers today with a feature on how stock broker John Hantz wants to reclaim Detroit as farmland.

The story is on how Detroit's economic collapse has reversed the usual logic of development that saw farming communities turned into suburbs when the land became more valuable as housing than it was as agriculture and how one somewhat shady-sounding financial services provider wants to replace abandoned lots with hyrodponics.

Hantz thinks farming could do his city a lot of good: restore big chunks of tax-delinquent, resource-draining urban blight to pastoral productivity; provide decent jobs with benefits; supply local markets and restaurants with fresh produce; attract tourists from all over the world; and -- most important of all -- stimulate development around the edges as the local land market tilts from stultifying abundance to something more like scarcity and investors move in. Hantz is willing to commit $30 million to the project. He'll start with a pilot program this spring involving up to 50 acres on Detroit's east side. "Out of the gates," he says, "it'll be the largest urban farm in the world."

The story winds through Detroit's urban emptiness - down more than 50% in population from its peak, Hantz's run-ins with securities regulators, competition from existing co-op agriculture projects in the city and his own basic lack of farm knowledge (he's been consulting with a professor from Kellogg on how to do this).

It ads to a great story of a man and his dream - and one of the few rational proposals out there.

Reuters: Setting Executive Compensations Levels is Hard!

Reuters, in an unsigned article, provides a paint-by-the-numbers look at executive compensation offering little more than a platform for various executive compensation consultants to discuss theories but not offering much in the way of news.

In response to recent moves by Goldman Sachs and others to offer more compensation in stock, the reporter troubles a senior attorney for an opinion, which is basically, "they'll do well if the stock goes up."  I'm not kidding.

"It may very well work out to be much better for the executives, if the companies perform well," said Kenneth Raskin, the head of law firm White & Case's executive compensation practice.

Although I've never worked with him, Mr. Raskin embodies the advice I give to law firm clients when they first start speaking to the press - reporters aren't judges and you don't need as much information to talk to them as you do to try a case on the subject.  Keep it simple, get quoted.

I've often had junior PR people come to me excited after 60 minute introductory interviews, thinking a wonderful relationship must have just been born.  I always tell them to wait for the story - in my experience interviews usually only last that long when the reporter is still waiting to hear something he or she can use.

That said, with so much attention already lavished on the subject of what to do with the money when financial services companies generate profits (the employees and shareholders always seem like good ideas to me), the bar should be higher before producing the next story.

NYT: Pay For Content is Coming

Richard Perez-Pena and Tim Arrango of The New York Times today document the slow return of the paywall in journalism.

Too many paywalls would put this blog in serious danger, so I'm an interested observer and fortunately it doesn't seem as though the publishers are any more together on this idea than the last time it came up.

“Content providers see that the idea that everything has to be free, supported by ads, isn’t working well, and they’re trying to put the toothpaste back into the tube, but only partially,” said Alan D. Mutter, a media consultant and blogger who has been an executive at digital media companies.

He went on: “So we’re looking at some sort of an inflection point, at least in attitude. But I haven’t seen much realistic, hard-headed thinking about how that’s going to happen, so I don’t know how much is really going to change.”

The article is thoroughly sourced and worth a read if you are concerned about free access to news on the Internet as it shows where paywalls are more likely to advance as well as the continue fear of going first that is holding them back.  Jay Rosen of NYU gets the final word on what it would take to get more people to pay - more value.

By that standard, much of the talk of wringing more money from Internet users rings hollow, said Jay Rosen, a professor of journalism at New York University and a prominent blogger on media subjects. “People who really think we have to charge or the industry is sunk would be more persuasive if they said at the same time we have to add more value than we’ve been adding,” he said.

Retail Consultants Get Strange Spotlight in WSJ

Retail consultants from Bain, Gilliam and Company and Deloitte got a late Christmas present from Ann Zimmerman and Rachel Dodes of The Wall Street Journal this morning - a feature story on their opinions of how retailers need to adapt to new shopping preferences.

None of the insights are groundbreaking enough to warrant a feature.  For example, unless you have enough information to report on what Best Buy is doing, why and how it is working out for them, what's the point of this paragraph?

Store chains must also take steps to make their locations more enticing destinations—for many, aisle after aisle of tightly stacked merchandise is no longer a good use of space. Some retailers, notably Best Buy Co., are already trying to make this transition with plans for "experience-based" areas, turning the centers of their stores into showcases where people can play with the latest gadgets.

Similarly, is there anyone out there who follows retail business who would find this observation illuminating?

The emergence of the Internet as a sales behemoth also poses a challenge for malls that charge rents based on a percentage of sales. They will have to determine how to account for items that were purchased by computer but picked up in stores, says Maggie Gilliam, president of Gilliam & Co., an independent research and advisory firm in New York.

The bar should be a little higher for achieving feature coverage for ideas and observations, even on the Monday between Christmas and New Year's.

FT: Shadow Economies Support Europe

Ralph Atkins at the Financial Times Frankfurt bureau reports on a new Deutsche Bank study into how much black market transactions support European economies.  The bank finds that at the extremes, populations who are scrupulous about complying with government regulations and those that ignore them benefit, while those in the middle like Germany suffer.

Countries with a high prevalence of moonlighting builders, unrecorded cash transactions, missing invoices, tax evasion or illegal activities such as drug dealing, have seen smaller contractions during Europe’s worst downturn since the 1930s than more honest neighbours, researchers at the Frankfurt-based bank have concluded.

The relationship works, however, only if the “shadow economy” is large – such as in Greece, where George Papandreou, prime minister, acknowledged this month that the public services are riddled with corruption.

At the other extreme, Deutsche Bank found that countries with a “particularly honest” population – such as Austria, France or the Netherlands had also fared relatively well during the crisis.

It's an interesting economic question to explore and Atkins does a good job of laying out the issue in a short article.  What the DB economists seem to have uncovered is that shadow economy workers don't tend to be big savers because it creates a paper trail to their illegal activity, so their activity boosts consumption.  On the other hand, the honest are big savers, which benefits society long term.

Bloomberg's Baum - Overused Phrases from 2009

Caroline Baum, a columnist for Bloomberg News, has been delivering witty coverage of ephemera such as bond market moves for decades now and should know a cliche-in-making when she sees it. 

Her column today spots a bunch of them and makes a hopeful stab and strangling them in the cradle.

If you've seen enough of "the new normal," "unprecedented," "green shoots," "uncertainty," and "historic opportunity," read on.

Hat tip: Josh Brown/The Reformed Broker.

WSJ's Crovitz Uses a Lots of Fake Quotes to Make a Point

L. Gordon Crovitz's "Rule of Law" column from the 1980s-1990s Wall Street Journal is one of my all time favorites but since he returned to writing in the Murdoch era, his "Information Age" column is less inspirational.

Today's column includes a recycled list of comically bad predictions about technology that are meant to reinforce the idea that predicting the course of invention itself is a fool's errand.

That may be true but the quotes he used have almost all been debunked by researchers, including Bill Gates claiming that 640 KB is a good size for a hard drive and a patent officer in 1899 declaring that everything useful had already been invented.  Columnists love these quotes, which is why they never check them, but it took me about 15 minutes of Googling to find citations refuting most of them.

Big time Wall Street Journal columnists shouldn't repeat urban legends.

Merry Christmas! I'm on break...

Sean won't be reading the news regularly again until the New Year, although I may post from time to time. 

I wish my readers a joyous holiday season and look forward to a return to blogging on January 4.