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Public disclosure
Sebi’s concern on ‘private treaties’ is timely Paid news is becoming a catch-all phrase to highlight the ways in which articles and broadcasts are being put out by the news media without fully disclosing conflicts of interest. It is not just that a persuasion industry is becoming increasingly sophisticated in using media outlets to disguise sponsored content as unbiased reportage. It takes two to make that work, and the concern is that by striking lucrative deals some media groups are putting at risk the freedom of press in this country. This freedom draws from a public trust in the need for a free press; and were that trust to be eroded, there could be nobody left to stand guarantee for that independence. It is in this context that the Securities and Exchange Board of India’s intervention is welcome.
In a Sebi-inspired advisory, the Press Council has asked media companies to disclose their stake in any company they report on. This disclosure is aimed at bringing transparency on “private treaties”, which refers to a practice adopted by some media houses of acquiring a share in a company in exchange for carrying a certain amount of free advertisements. The demand is that a media group disclose the interest at the end of each report mentioning a company with which it has a private treaty, and that it also make comprehensive disclosure of its stake in various companies on its website. As a market regulator, Sebi’s concern is “such brand building strategies of media groups, without appropriate and adequate disclosures may not be in the interest of investors and financial markets”. And though questions still remain on how such an advisory could be enforced, Sebi’s concern is well taken.
The larger issue, however, is disclosure. There is enough anecdotal evidence — and this newspaper has detailed much of it — that a lot of brand-building across politics, sport, cinema, business, etc is guided by considerations of favour that the reader/ viewer remains unaware of. At a time when journalism is being defined by a set of checks and filters to compare against the onslaught of randomly generated content on the Internet, adherence to established codes of disclosure is all the more critical.
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