News Corp-owned investment newsletter Eureka Report is in advanced discussions around the potential December launch of a financial platform called BrightDay, an investment platform on which people will be able to administer their self-managed super funds.
“There’ll be a number of options about how you do it,” Eureka Report cofounder and commentator Alan Kohler told Crikey about the development, first revealed in Fairfax last week. “You can have your fund administered, or you can invest through OneVue’s standard porfolios”. OneVue is a listed financial services company. Crikey understands Eureka Report general manager James Leplaw is in advanced discussions about a partnership with OneVue to deliver the product, but nothing has yet been finalised.
If a contract is signed, it wouldn’t be the first move into financial services by the team at Eureka. Earlier this year, Kohler and James Kirby, another veteran finance reporter who is the publication’s managing editor, obtained financial services licences. It’s not a common qualification among business and finance reporters. This, coupled with the planned launch of BrightDay, signals an increasing financial sophistication behind Eureka Report’s offering that has some people questioning where the journalism ends, and the financial service provision begins.
Last Friday, Fairfax’s CBD column questioned how Kohler, who is the ABC’s nightly finance correspondent in addition to his roles at News Corp, could remain an unsullied financial journalist on the public broadcaster when Eureka Report will be involved in picking stocks.
“The latest effort to stay solvent will see Eureka gear up to sell financial services and get Kohler into the business of stock picking,” wrote CBD columnist Colin Kruger. “Wouldn’t we love to see Eureka’s call on News Corp. Don’t suppose we have to run that one past the boss, Rupert Murdoch.”
But Kohler rejects the assertion that stock-picking will undermine his journalism, saying he has no role in that himself, and no longer owns the business. But he also says the kinds of companies he covers as a finance journalist aren’t the type of companies that Eureka Report’s stock picks favour anyway. “Eureka Report’s stock tips are all what you’d call microcaps — very small companies. We don’t talk about those on the news. And I’m not involved in any of the decisions on BrightDay about what stocks to invest in.”
Eureka Report isn’t a business publication in the way something like The Australian’s business section is, Kohler continues. “It’s an investment newsletter. It provides commentary on economic events, and provides ideas for particular investments.” In this, it features more writing from analysts than journalists. “Their job is to find investment trends, to analyse the investment climate. The way News Corp sees it, BrightDay provides people with a way to action things they find on the Eureka Report. I don’t think anyone sees that as a conflict — that’s not the feeling at all.”
It’s possible to envision another conflict of interest. The competition between financial advice providers is fierce, and the sector has its share of crooks. Both Fairfax and News Corp’s journalistic arms have devoted significant resources to investigating the dodgy practices and conflicts-of-interest in the sector. One can see Eureka Report’s new fund management platform as a competitor to traditional financial management and advice.The next time a scandal breaks in financial services, will News Corp be reporting on a competitor? And will its coverage of the financial advice industry as a whole be as fierce if, a few years down the track, BrightDay is a significant money-spinner?
Kirby says any conflicts will be managed the way publishers have always managed diverse business interests — through a firewall between different parts of the business. “What’s been planned is not unusual. In the area of investment publications there has often been a funds arm, or a funds spinoff. We just haven’t done it yet.
“My role is to run Eureka’s editorial … I am not involved in BrightDay, I am not on any committee, I have no KPIs relating to it. It’s as simple as that. It is a spin-off from Eureka, in which I have no role.”
Kirby says that because he and Kohler have become financial advisers, there’s been some confusion about whether or not their roles are entirely editorially focused. But he says he became a financial adviser to benefit his journalism. “We’re continually asked by readers, in our reader surveys, what our credentials are. People wanted us to have a licence — as reassurance. So we went and got one. We had to do exams and study for it, and under the terms, the publication is now licensed to give general investment advice. And so am I.”
Kirby says he’s been a journalist for over 20 years, and has no intention of jeopardising his editorial integrity or that of his publication. He says that’s something everyone in the business takes seriously. “I have become a financial adviser. It wasn’t something I expected to be doing. But it doesn’t make you any worse as a financial journalist.”
Eureka Report is the jewel in the crown of the Australian Independent Business Media Stable. The company — whose media assets include Business Spectator, Technology Spectatorand Climate Spectator, as well as Eureka Report — was sold by its founders to News Corp for $30 million in 2012. Until recently, all the other websites in the stable relied on advertising to fund themselves. Eureka Report, however, was a profitable niche subscription product, aimed at the booming ranks of retirees who manage their own superannuation.
In 2012, when it was sold, reports in Crikey and elsewhere pegged Eureka Report’s profits at nearly $2 million. A year later News Corp accounts leaked to Crikey showed it was adding less than $1 million to News Corp’s bottom line once expenses were taken out. It’s possible Eureka Report’s fortunes have improved since then.
Crikey chairman Eric Beecher is a former chairman and shareholder in Eureka Report publisher Australian Independent Business Media.
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