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The Bloomberg News Scandal: What the Media Are Missing

The Bloomberg News Scandal: What the Media Are Missing

The media are missing or overlooking the two key aspects of the scandal at Bloomberg News. They don’t seem to “get” how the values of Bloomberg dominate everything and surely caused the proud company’s current state of embarrassment. This is a company that expects to win — every time.

Over the weekend, financial journalists reported that many Bloomberg News’ reporters, numbering 2,400 in all, were using the prized terminals to snoop on the company’s clients. Bloomberg has 315,000 customers around the world. They are absolutely hooked on the Bloomberg Terminal and basically must have access to it to do their jobs.

The Bloomberg Terminal is a marvel, containing countless pieces of data that Wall Street traders find invaluable. Bloomberg journalists believe they have a leg up on their counterparts because of the treasure chest of information in it.

What matters at New York-based Bloomberg L.P., the juggernaut that the New York Mayor Michael Bloomberg founded back in the early 1980s, with several millions of dollars? Two overriding principles: the sales of the Bloombeg terminals and the reputation of Mike Bloomberg. 

The rest is for show.

Trust me. I worked at Bloomberg News as a reporter from 1993 to 1999. I saw close-up what went on. Journalists, many of whom had had successful careers before arriving at Bloomberg, were regarded as hopeless idiots if they couldn’t grasp the nuances of The Bloomberg Terminal and didn’t bow down to it as a sacred tool (I confess; I couldn’t, and didn’t). That was partly because the terminal was so well regarded and partly because it carried Mike’s name on it.

“Are you one of us?” became almost a way of life at Bloomberg. Either you signed on and accepted the power of The Terminal or you were, well, branded as a hopeless idiot.

The company began to develop a hard-charging culture all its own. The Vikings were wimps next to these men and women of Michael Bloomberg. If someone had the audacity to resign, that person was hustled out the door in lightning speed. The company packed up his or her possessions in boxes and, as they said in Goodfellas, that was that. 

When I resigned in 1999, miraculously, I was permitted to walk around the newsroom one last time and shake hands with my soon-to-be ex-colleagues. I guess I was popular in the newsroom, after all.

People put up with the craziness at Bloomberg — buy me a beer sometime after work and I’ll tell you everything — because they were being paid better money than at any other company. Golden handcuffs. 

When Mike Bloomberg — “Mike” to all of us at the company — launched Bloomberg News in 1990, he was a largely unknown quantity in journalism. 

But he knew he needed top-flight journalists to supplement and explain the information contained in the terminals. Mike had a shrewd growth strategy. 

He basically overpaid by lots to recruit journalists from other organizations. He gave us “certs” — annual certificates — as a part of an annual bonus plan (which was unheard of for working journalists) to enrich us further.

Plenty of talented, accomplished journalists remain at Bloomberg because they can’t afford to leave. They take the money and stay. It’s no disgrace. Their fortunes depend on their jobs. The surest way to falling out of favor is to do something that makes Mike Bloomberg look bad. (Again, trust me onthis point).

They know that Mike, in one way or another, controls their destinies. Even though is not involved in the company on a daily basis any more, you certainly don’t want to anger him.  

Once, one of my senior colleagues asked me if I could describe what Bloomberg was all about in one word: Scoops? I (the idiot, remember) offered hopefully. NO, the guy thundered as only he could — and, no, I am not referring to the volcanic editor in chief, Matt Winkler — Bloomberg is a company about MONEY. (M-o-n-e-y, as Matt liked to say again and again).

The Terminal, as it is known at Bloomberg and throughout the financial and media industries, has taken on a lore of its own. 

Once the machine was valued strictly for the information it contained. Eventually, the legend of the device grew. When Wall Street went through one of its periodic funks, employers cut back on the pricey terminals and traders were forced to share with colleagues, fight to gain access to one of them or, worst of all, go without it altogether.

The Bloomberg Terminal became a status symbol in a world where the trader with the most toys — summer homes in the Hamptons, winer ski chalets, cars, boats, planes — felt the most contented. 

Since the story broke over the weekend, the media dutifully reported on the vital statistics of the Bloomberg Terminal. But I didn’t see much understanding of how the Terminal has come to be such a valued commodity. Thomson Reuters and others have tried hard to vanquish the Bloomberg (another of its nicknames) but nobody has come up with either a collection or data or a marketing scheme to take the Bloomberg’s place. Not yet. 

Ah, “The Bloomberg.” Guess who that is known for? It is New York Mayor Michael Bloomberg, of course. Bloomberg has no role in the image scandal at the company he founded. He departed the scene shortly before launching his campaign for the 2001 mayoral race in New York.

This is a man who believes in branding. The magazine, radio station, portable computer and TV station that he created all bore his name. He was also the smartest guy in the room every time. Between Mike’s superior intellect and work ethic, he was going to win.

What we were always aware of at Bloomberg was serving Mike. We didn’t really mind. He was a good boss. We liked him beyond fearing him. He outworked any of us so we knew he was a good role model. He had no time for chit-chat around the canteen, either.

One afternoon I bumped into him in a corridor and he said, “Hey, I saw one of your stories — it was good!” 

“Oh yeah,” I asked him, evidently pleased. “Which one?” 

“I don’t know,” he shot back impatiently. “I don’t have time to remember all of your stories.” I had to smile as I typed this and remembered the slice of life at Mike’s company.

The Terminal and The Boss. 

I can only imagine the level of nervousness sweeping through Bloomberg’s offices today around the world. Even though he is the mayor and no longer stays active on a day to day basis at Bloomberg, he wants to know what’s going on, if only because much of his fortune is tied up in the company.

Once the media understand the influence of Mike Bloomberg and the importance of the Bloomberg Termnal, they can understand what this company is all about.

Jon Friedman was a reporter at Bloombeg News from 1993 to 1999, before resigning to join another media company.

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