Exclusive: PCI report on “paid news” slams corrupt media

• Leader of Opposition in the Lok Sabha and senior BJP leader Sushma Swaraj told the Press Council of India that the “paid news” phenomenon had started out as an aberration, went on to become a disease and is now an epidemic. She said that although she was not directly approached by media companies, her campaign managers were told that they could manage the media by purchasing a package worth Rs 1 crore.

• I was contesting the 2009 elections on a ticket of the BSP from Chandigarh. Representatives of the print medium came to me and asked for money. They said their newspapers will give me coverage if I paid them money. They offered a ‘package’ to me and in one such ‘package’ I was told editorials would be written in my favour – Former Civil Aviation Minister Harmohan Dhawan.

• Every single newspaper was on sale in my constituency and I was told that I had to pay up for publicity – BJP MP from Gorakhpur Yogi Adityanath told a news magazine.

• CPI candidate Atul Kumar Anjan said he received phone calls from representatives of two of the largest newspapers in North India, Dainik Jagran and Hindustan, who asked him to pay Rs 15 lakh each for coverage of his election campaign in their publications.

These are some of the facts that have emerged from the Press Council of India’s report on “paid news”.  The council has not made the report public owing to pressure from some media publications but Canary Trap, which has a copy of the draft report, brings you exclusive details from the damning document. Ever since noted journalist and The Hindu’s Rural Affairs Editor P Sainath highlighted the worrying trend of “paid news”, the issue has even been debated in the parliament.

The “paid news” phenomenon has left the parliamentarians of the country worried with senior MPs and even Vice President of India and Rajya Sabha Chairman Hamid Ansari expressing concern over the malpractice. Infact, a lot of politicians across party lines have suggested that exchanging money for “paid news” should be declared as a corrupt practice.

The report, Paid News: How corruption in the Indian media undermines democracy, was prepared by a two member sub-committee of the PCI to “track the blurring boundaries between news and advertisements/advertorials”. The report provides an account of how certain individuals and representatives of media organizations exposed the selling of editorial space for money during the 2009 Lok Sabha polls and assembly polls in Maharashtra and Haryana in 2009.

The members of the sub-committee, Kalimekolan Sreenivas Reddy and Paranjoy Guha Thakurta, admitted that given the secretive nature of such malpractices it is difficult to find clinching evidence of corrupt practices. However, they further state that there is a huge amount of circumstantial evidence that points towards the use of media to push “paid news”.

Over 50 individuals and representatives of various organizations (media, journalists’ union, and political parties) submitted their depositions before the PCI.

The malpractice of “paid news” has spread across newspapers and television channels in the country and it has now become organized and involve advertising agencies and public relations firms, besides journalists, managers and owners of media companies, the report stated.

The “rate cards” and “packages” that were distributed among the election candidates not only promised favorable coverage but also included criticism of political opponents.

The report argues that the proliferation of “paid news” content in the media “can be directly related to the diminishing role and status of editors in media organizations and the erosion of the freedom enjoyed by journalists under the Working Journalists Act.”

Apart from the “paid news” phenomenon, the report also highlights an innovative strategy employed by Bennett, Coleman Company Limited (BCCL) to earn profits at the cost of editorial integrity. According to the report: “The private treaties scheme pioneered in the Indian media by BCCL involves giving advertising space to private corporate entities/advertisers in exchange for equity investment.”

Similar schemes have been adopted by various newspapers and television channels. Even the Securities and Exchange Board of India (SEBI) has written to PCI, stating that “many media companies were entering into agreements called ‘private treaties’ with companies whose equity shares are listed on stock exchanges or companies that were coming out with a public offer of their shares.”

According to the SEBI, media companies were picking up stakes in such companies and were providing news coverage to them via advertisements, news reports, and editorials. It pointed out that such treaties may lead to commercialization of news reports. The board also feared that “biased and imbalanced reporting may lead to inaccurate perceptions of the companies which are the beneficiaries of such private treaties.”

The PCI report further states that the malpractice of “paid news” occurs at three levels.

1. The readers/viewers of the media outlets are deceived into believing that whatever they are consuming is a genuine news content and not advertisement.

2. The candidate standing in the elections violate the Conduct of Election Rules 1961 by not officially declaring the expenses incurred in buying “paid news” packages.

3. The media companies who engage in such malpractices violate the Companies Act, 1956 and Income Tax Act, 1961 by not accounting for the money they take from candidates for news coverage.

The amount of money that media companies make through “paid news” can be gauged from the fact that the estimated size of its market in Andhra Pradesh alone is between Rs 300 crore to Rs 1000 crore. The practice is prevalent in print and electronic (both English and non-English) media in different parts of the country.

With the number of media outlets (both in print and electronic) increasing at a rapid pace, it is high time the Press Council of India is given some powers in order to ensure that such blatant corruption is prevented from spreading further.

(Postscript: The draft report that this post refers to has been mired in another controversy as some PCI members have raised several objections to it. It is also reported that a new draft report would be prepared and discussed before the final report is submitted to the government. With so much happening on this front, keep logging on to Canary Trap. We will bring you all the details at regular intervals.)