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Canadian Business Magazine KOs the Globe & Mail

Tomorrow begins the blogging “hunger strike”, but first, some passing thoughts about this week’s business media wars:

Although we are in month three of the self-imposed moratorium on any and all blogging to do with you-know-who, this post isn’t about the Rock Star himself, but about the professional beat-down that Canadian Business Magazine writer Joe Castaldo brought to the Globe and Mail this week. A beat-down for the ages.

Each has been working on their version of The Quintessential KO Piece for some time. Each journo went you know where for some pithy, and factual, primary research. I agreed to an interview with CB, but by the time the Globe asked me for some on-the-record comments, I begged off; far too tired about dealing with the endless interest in my KO posts of the past couple of years. So much so that, in April, I took down the 20 or so blogs that had accumulated over the past couple of years.

Mr. Castaldo did a fabulous job of bringing new research, data, war stories and key interviews to the fore. He literally caught his subject claiming TLC was profitable prior to Mattel’s acquisition, despite the public financials saying otherwise. Presented with the SEC-filed financial statements, KO recanted.

When addressing his initial entry onto TV, Mr. Castaldo let KO spin a yarn about being called by BNN’s head honcho Fleischmann and told he should give full-time TV commentating a try after a few successful BNN guest TV spots. According to Mr. Fleischmann, it was the other way around.

Mr. Fleischmann had never heard of him before (so much for being noticed on the successful “guest spots”), KO showed up in his office one day when a telephone call from our Rock Star’s Boston digs wasn’t sufficiently convincing. When challenged by Canadian Business Magazine with Mr. Fleischmann’s recollection of his break into TV, KO initially brushes it off with a “cold call? I don’t think so” rebuttal. He later goes on to say he now doesn’t “remember” and if Mr. Fleischmann says that’s what happened, then that’s what happened.

The one error in the CB piece that jumped out at me seemed to be KO’s claim that the net asset value of OGE.UN had grown since inception. Here’s the real math on that, near as I can tell.

The July 2008 IPO was at $12.00 per unit. After i-banking commission and legals, the fund started with a NAV of $11.37. As of yesterday, the OGE net asset value is $9.42, and distributions since inception total $1.46 to date: that equals $10.88, which represents a NAV decrease of 9.33% from the IPO price, or a 4.3% decrease from the post-IPO NAV starting point of $11.37; both are on a simple return basis. These NAV figures are straight from the fund website. According to KO’s interview with Canadian Business Magazine, OGE’s NAV is “up 1.3% on an annualized basis.”

You’d think it was impossible to be “up on an annualized basis” when you’re actually down since inception, whatever the timing of the cash flows. But what do I know?

In his interview with CB, KO dismissed my occassional posts of the past 2+ years as being those of someone “in their basement writing this stuff”. It was the classic blogging putdown cliche, except that he left out the usual reference to housecoat and slippers. I manage a fund on Bay Street, and KO and I were once on a TSX board of directors together. You can’t fault him for hammering me. What else is he going to say?

On second thought, maybe I should’ve accepted CBC Producer Mike Armitage’s invitation to join KO as a “Dragon” on Dragon’s Den back in 2008. KO would be hard pressed to use the mere “blogger” moniker then, no?

I passed on the kind suggestion of becoming a fire-breather, and told Mr. Armitage that I wasn’t interested in being in some Sunday night “bald guy cage match” every week with KO. That’s what appealed to the CBC, of course, and he admitted as much. I am only too happy dealing with some of North America’s best entrepreneurs and VCs here at Wellington. Besides, I hear that Robert Herjavec does just a superb job balancing out our Fund Management Rock Star. Mr. Herjavec also he has the looks for TV that I lack.

The Globe & Mail’s ROB team, which rushed out its own full page KO piece the day after the CB story was published, was only able to muster a rip-n-reprint version of the key themes that you had already read in other places. Unfortunately for we providers of the what must have been the original source material, none appear to receive a single acknowledgement as to the origin of the analysis, research, storyline, etc., etc., that made up the key underpinnings of the Globe’s lift masquerading as a bona fide “news” article.

As regular readers of this space may recall, this is not the first time we’ve experienced such issues with some of the folks at 444 Front Street. In fact, we’ve now reached the 10th incident by last count (see prior posts “Google acquires BumpTop part 3” May 3-2010 and “DTM copycats at it again part 8” June 20-08). I’ve broached the topic with the editing team in writing on more than one occassion, but no response has ever come.

I guess if you are paid to ask questions for a living, you aren’t necessarily trained to provide answers when the tables are turned….

What is interesting about that is the sheer quality of the CB’s own proprietary research meant that Mr. Castaldo had no shame in acknowledging that some folks out there in the hinterland had blazed an early trail on the KO topic. With his training, time, resources and the magazine’s reputation with potential interview subjects, Mr. Castaldo was able to go places that bloggers could never tread. That’s the wonderful luxury of the mainstream media. When they do their jobs well, and ethically, they can advance stories that the bloggers have already kicked off, but can so rarely finish.

CB did that in spades this week.

As for my friends at the Globe & Mail, I think the time has come for the DTM to face up to the reality that primary source material, even if it comes from blogs, must be acknowledged. No excuses about hat tips falling by the wayside due to “editing for length”, or the fact that people didn’t want to be interviewed — so attribution wasn’t necessary as a result. If you use the material, cite the source. It’s that simple.

And, until you chin up to this, the blog “hunger strike” shall begin at once.

(disclosure – this post, like all blogs, is an Opinion Piece)

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4 Comments  comments 

4 Responses

  1. This is better than MTV!

  2. Brad J.

    Regarding KO’s assertion that the fund is “up on an annualized basis”, it works if we interpret the timeframe as YOY. But isn’t everything up YOY from Spring/09 to Spring/10 (and by much more than 1.3%)?

    To confirm Mark, does the “hunger strike” include all blog posts or just KO-related ones?

    Full disclosure: I’m an expat banker, not a DTM journo with a Ctrl C complex.

  3. Brad

    Why would one annualize returns that you don’t have? If you invested in July 2008, and the NAV is down from their today (inc. distributions), you’ve lost money, right?

    To answer your question: the blogging “hunger strike” covers all topics. Sorry, but it’s the only way to get the editorial team’s attention at 444 Front Street.


  4. […] insights on the financial industry and it’s impact on Canadians is unsurpassed. The hunger strike stems from Globe & Mail not properly referencing the originating sources of their published news stories: […]

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