Finding buried leads

News judgement is a core skill of business journalism. It is often tested to the limit by a badly written press release, as with this story below. But this story also highlights the need to ask the right questions:

So how do you make sense of this kind of company announcement?

First, look for the change. In this case, that's easy: the change is the acquisition of a new mining vessel.

Then, identify the consequences of the change. In fact, this is where this announcement, and the journalist who relayed it, both fell down. The consequences are here, but buried.

In the fourth paragraph we are told that the acquisition of this vessel will dramatically accelerate DFI's production schedule and "position" the company to receive positive cash flow by mid-2001. That is, until now, this company has been spending more than it has been earning, but with this new vessel it will start to earn more cash that it's spending, and that earlier than it planned (five months earlier, since the vessel was secured five months ahead of schedule???).

This information is essential in running the core news judgement test: so what?

Why should we as journalists care that this joint venture has bought a ship? Why should we care enough to devote news column inches to this announcement? And why should our readers care enough to read about it?

Well, this acquisition will bring forward a turnaround in the company's cash flow/fortunes, which seems to amount to unexpectedly good news.

But we still need to be clear that someone/anyone will care that this company has some good news. In a well-written press release this fundamental context would be given. But here, we don't have it, so the following is what we need to know:

• is 50,000 (or even 130,000 carats) a large, small or minuscule operation (a turnaround doesn't count as news if what's turning around is an off-the-radar-screen joint venture)?
• are either Diamond Fields International or Trans Hex public companies, large companies, or companies that are particularly significant to any substantial interest group for any other reason?
• does this joint venture represent a substantial or critical operation for either of the partners?

If any of the tests of importance are satisfied, we then gather the information that will demonstrate the significance of this particular event.

As part of this process, when reporting good news we must always test it: is this as good as it seems? For, be sure, companies will always try to sell us good news no matter what the event.

So our context here should include:

• are mining vessels hard to obtain?
• why was Namibian Mineral Corps selling this vessel?
• do the causes of and circumstances behind this event point to a canny management, an initially over-generous time schedule, or a fluke?
• what's special about a mining vessel (is this a huge lock-up/contribution of capital)?
• how critical is this piece of equipment to this operation?
• what does diamond industry jargon, such as "base case diamond production" mean (in language that industry outsiders can understand)?
• where and what is Marshall Fork?
• what are the Luderitz diamond concessions?

Finally, when presenting your findings, avoid the ghastly sentence construction and structure of the story above - if you were challenged with writing a more boring and uninformative intro you'd struggle to top it! Instead:

1. Kick off with the change and why it matters. Make sure that the core "so what" test is answered to the satisfaction of your readers in the first two paragraphs.
2. Be forward-looking in explaining the story. Readers care about the past only insofar as it throws light on the future.
3. Explain all your terms and context as you go along.
4. Make sure than any information on scale or normality is given with sufficient comparatives to be meaningful (how does 130,000 compare for size with the average diamond mine in South Africa?)
5. End up with a story that would make sense to any of your old college friends, no matter how disinterested they are in business news or the diamond industry.

Summary

How do we spot the news when it's this obscured? Look for the change and the consequences of the change. Don't let another word enter your brain until you've homed in on this element.

With the change and its consequences in your sights, start testing it for significance: is it large or abnormal? Will anyone gain or lose? And, finally, what caused it to happen, and thus what does this event tell us about the future?

Then deliver your findings clearly. The first two paragraphs should focus on the change and why it matters. Throughout the rest of the story, explain, explain, explain, making your information meaningful by illustrating its relative importance. And always look to the future.

Finally, for a more thorough grounding in:

• news judgement;
• asking the right questions;
• the writing of clear and news-worthy press releases;
• extracting the news from any kind of press release; and
• presenting stories so that readers learn and enjoy,

see The Word on Business, available from Amazon.co.uk and Jenny Luesby's website [link no longer active].

Related links

On this site

• Email your feedback on this article
• Don't believe the hype - article on cutting the hype from press releases
• More articles about journalism
• Use our exercises to give your journalism skills a work out

On other sites

• The Word on Business at Amazon.co.uk