Who's the Boss?

Why ABC let me bash its sponsors.

For I7 years I was a television consumer reporter. This was an odd job, because in essence it meant my employers paid me to criticize the people who pay them. I was rewarded for telling people what advertisers didn't want them to know.

I assume it would have been a given in any discussion among government planners 20 years ago (or even now) that this kind of reporting would simply not happen. I can hear the arguments:

"This is one more reason why government-supported television is so necessary. If consumers are to be given important information about products that are dangerous, ineffective, or simply more expensive than other available choices, they won't get it from commercial broadcasters. Just as Consumer Reports reviews products credibly because the magazine carries no advertising, only PBS can do consumer reporting."

The planners' arguments seem logical, but the reality today is that there is no significant consumer reporting on public television, while there is an endless parade of it on commercial TV. Consumer Reports syndicates a news service to 70 television stations; not one is a PBS affiliate.

How can this be? In commercial broadcast television, advertisers pay for everything. Appropriately, the networks court them as any business should court its valued customers. Media buyers are favored with fine food, lavish parties (less lavish lately), hard-to-get tickets, etc. Why would a business undermine this courtship with negative consumer reporting?

Of course, even consumer reporters try to find complimentary things to say (medical breakthroughs, genuinely innovative products, etc.), but it is the nature of news to be negative (that REASON's offices were not hit by an airplane is nice, but not news). For the most part, I spent 17 years insulting my employers' most valued customers: I questioned their research, their promotion, their products, even their motives. For heaping such abuse on our customers, I was given promotions and extravagant paychecks.

To highlight this contradiction, let me give two examples. I'll pick painkillers, since at the time these incidents seemed particularly painful—to me, and to my employers.

While working for WCBS-TV (CBS's owned-and-operated station in New York City), I reported that the Federal Trade Commission had charged the makers of Anacin, Bufferin, Cope, Vanquish, and Arthritis Pain Formula with false advertising. Each company claimed its brand worked faster or killed more pain. In truth, they were all about the same, since aspirin was their only painkilling ingredient. The makers of Anacin even had the nerve to call Anacin "a tension reliever" even though its only ingredients are aspirin and, of all things, caffeine.

The government wanted the aspirin sellers to run "corrective" advertising, which would have been something like: "Contrary to prior ads, Bufferin will not relieve more pain." The lawyers managed to keep this in court for six years, eating up your tax and aspirin-buying dollars, until a judge concluded that it was sufficient for the sellers simply to stop making the old deceptive claims. "Corrective" ads never ran.

None of my reporting on this story was ground-breaking or exceptional. Nevertheless, it inspired Bristol Meyers, maker of Bufferin and Excedrin, to sue me and CBS for $25 million.

I assume the company sued because of the language I used. The wire services carried similar stories but used the lawyer-driven language common to government press releases, something like: "The Federal Trade Commission today filed a deceptive trade practices action against the manufacturers of analgesics." I didn't find that clear, so I named the brand names and said, "Look, the ads are hogwash."

This was my first lawsuit, and if its purpose was to terrorize me, it succeeded. I waited for CBS to disown consumer reporting—it was still a new field at the time—and fire me. To my surprise, CBS merely issued a statement saying it considered its "consumer reporting a valuable public service," and told me, "Carry on."

Lawsuits are not the biggest threat. They do carry the risk of bad publicity and destructive legal costs, but in practice the suits are seldom played out. After Bristol Meyers held a press conference to announce its complaint, it quietly let the lawsuit lapse. This is typical—in my 22 years of reporting, I've never made it to court.

The bigger threat is the loss of advertising. That brings us to the second example. On ABC's "Good Morning America," I explained that Sterling Drug's heavily touted "discovery," Panadol, was just an expensive form of acetaminophen, the painkiller in Tylenol. I suggested people buy store-brand acetaminophen, which cost half as much. Sterling Drugs took offense and pulled all its advertising from ABC.

You would think a commercial television network would say, "Who needs this? Who needs Stossel?" Instead, ABC never even told me about it. I learned of the cancellation months later, when someone at an advertising agency told me it cost the network $550,000.

Why does this happen? Why would the network executives go out of their way to protect reporting that criticizes the people who pay the bills? Everyone talks about that "wall" between sales and news, but who would think that when big money was at stake, the wall would be respected?

My bosses in the news division say it happens because news is special, a public service so important that it deserves protection, insulation from crude market forces. Crucial to the credibility of a news organization is the public's confidence that it will foment a free and open debate about everything, and everything includes advertisers.

That may be true, but there is a second factor that is usually overlooked. Consumer reporting is broadcast by commercial media because the market, working in its infinitely bizarre and unexpected ways, encourages it.

The business cliché "be customer driven" has two meanings for a commercial broadcaster because he has two sets of customers: advertisers and viewers. OK, the viewers don't pay anything, but if viewers don't like the product, the advertisers won't pay. Hence, the obsession with ratings.

The ratings wars inspire some schlock TV, but they also represent democracy at its best. Viewers vote with their dials. If they don't like what we do, we're gone. I would argue that American television programming is so far ahead of the programming done by Europe's and Asia's government-driven broadcasters simply because our ratings-obsessed system creates better competition.

It also benefits the consumer reporter, because although his reporting is annoying and expensive to his employer, the employer's research shows that one thing viewers want most in their television news programs is consumer information. A broadcaster can protect some ad revenue by killing the consumer beat, but if he loses viewers, it's not worth it. In practice, stations have found that the higher ratings pay for occasional ad cancellations. (Most of the advertisers cool off and come back anyway; they like running their ads in a credible environment.)

There are exceptions, of course. KGW-TV in Portland, Oregon, once told me that I couldn't say that Campbell's Soup put marbles under the noodles to brag about how thick its soups were, or that Libby-Owens-Ford Glass, in boasting about the clarity of its car windows, shot the commercials with the windows rolled down. The boss said, "We can't run that. We depend on the advertising community for our livelihood."

Ten years later, "Good Morning America" killed a story I did on "premium" beers. We did a silly taste test in a bar to show that people who swear they'll only drink Bud or Miller really cannot tell the difference. Insiders at ABC told me the story was killed because a major Budweiser sales deal was in the works; it wasn't worth risking the deal over such a minor story. The news department said it wouldn't fight for this one because my survey wasn't very scientific (some of the tasters were a little drunk).

Neither story was important, but the censorship was infuriating and chilling enough to drive me to leave KGW and to think about leaving "Good Morning America." (I chickened out. They had never censored me before—and it was an awfully good job.) Nevertheless, what is remarkable about this is that, in 17 years, it's only happened twice. The ABC executive who killed the beer story later left the company, and nothing I've done has been censored since. I even re-shot the beer story, using sober tasters, and it was broadcast without interference. My successor at "Good Morning America," Paula Lyons, says she's never been censored either.

Recently the Investigative Reporters and Editors Journal quoted reporters from several TV stations who said they'd been told not to report on certain advertisers or had been fired after offending advertisers. The IRE subtitled its article: "Terrifying Trend…clamp down on advertiser-sensitive reporting," yet it was able to identify only a few abuses. It also noted (briefly, at the end of the story) that those same stations had "allowed their reporters to go after other sponsors." A subsequent Ralph Nader column repeated the IRE'S complaints (predictably, he omitted the good news) and claimed that consumer reporting had been "decimated" in Chicago.

Such articles are useful because they deter stations from broadcasting their sponsors' ("All car dealers are wonderful") version of life. But the bottom line is that these incidents are newsworthy only because they are unusual.

Once again, the market has delivered more to the consumer than our government "protectors" have. The "public" stations were supposed to be the ones that would carry the "sensitive" consumer news. They did not. Profit-seeking, advertiser-beholden private businesses did.

John Stossel is a correspondent for the ABC News program "20/20."