Lou Dobbs is back. If you watched American television it was hard to avoid knowing this. CNN ran breathless advertisements announcing: "Lou Dobbs is back", and compared him to Charles Darwin and Thomas Edison. But Mr Dobbs is no expert on evolution or the light bulb. He was until two years ago presenter of the flagship CNN business show, Moneyline, which he left after a feud with management.
In his absence, viewers had been deserting CNN's dominant financial news slot for rivals on CNBC, MSNBC, Bloomberg and Fox. Advertising revenue fell 11 per cent last year at the evening CNN programme while it grew 100 per cent at CNBC's Business Centre. Viewers declined by a quarter. So CNN brought back the 56-year-old presenter with the trademark baritone voice and comforting boardroom manner, presenting him as a returned messiah. "Once again all is well with capitalism," said one CNN ad. "It's not a recession until he says it is," said another.
Financial television is big business in the US. Even with reduced revenues and without Lou Dobbs, Moneyline took in $59 million (€68 million) for CNN last year, making it the network's most lucrative programme. But it is CNBC that has become the pounding heartbeat of Wall Street. All day the 12-year-old cable channel owned by NBC excitedly pumps out stock prices, hot tips and interviews with analysts and CEOs, culminating in its Business Centre showpiece.
CNBC is so pervasive it has been accused of increasing market volatility. Its minute-by-minute coverage can turn thousands of diverse day traders into a herd, ready to follow the latest fancy.
CNBC's star presenter is Maria Bartiromo, dubbed "Money Honey" by Playboy in an article extending an invitation to female business celebrities (not taken up) to pose nude. It is because of the huge draw of talented CNBC broadcasters like Ms Bartiromo that CNN was so desperate to get Lou Dobbs back.
Ms Bartiromo, host of Midday Call and the first reporter to appear live from the floor of the New York Stock Exchange, has a devoted following. The late punk rock icon Joey Ramone wrote a song to her. Her fan web pages include the Maria Bartiromo Market Hairdex website, which claims that her hairdo de jour anticipates market trends (e.g., when her cowlicks go out of control a major announcement is imminent, if the cowlicks branch out, a rally is on the way).
A study undertaken by two Emory University finance professors found that if Ms Bartiromo says something positive about a company on air, its share value jumps an average of 0.43 per cent in the next minute. They called it the "Money Honey" effect. Negative comments took 15 minutes to factor in but the effect was greater, producing a 1.25 point average fall. Ms Bartiromo rejects criticism that she is distorting the market. "The idea that we're impacting a $17 trillion market is a little out of reach," she said.
Lou Dobbs came back on Monday of last week and at first it looked like his reported $3$5 million salary had done the trick. That evening Moneyline drew 392,000 viewers, up almost 50 per cent, and 37,000 more than CNBC on the night, according to Nielsen Media Research.
Ominously, however, it badly trailed in New York, where the financial action is. By Thursday the fizz had gone out of the champagne. Moneyline was back on the skids, attracting only 121,000 viewers, down 69 per cent from Monday, while Business Centre had increased its viewer-ship by 175,000.
Then on Friday the Washington Post further dampened spirits at CNN. It disclosed that Mr Dobbs would receive a fee of $30,000 from Ford Motor Company for addressing its executives in Florida on Sunday, raising questions about a possible conflict of interest. The Moneyline presenter had days earlier interviewed Ford chief executive Jacques Nasser, ending with the words: "Well, Jacques, we wish you all the very best." CNN said the fee would go to charity. CNN discourages staff from accepting fees or benefits from organisations they might be covering. Ms Bartiromo addressed Ford executives in January and directed her fee go to charity.
It is premature to draw conclusions after one week. CNBC looks like the winner. However, it won no marks for graciousness, as the battle-of-the-bell showed. Both channels always show the closing bell in the New York Stock Market at 4 p.m. On the Monday Dobbs returned, he and his CNN colleagues did the honours on the podium. Somehow that day CNBC didn't get around to airing the event. It then accused its rival of not showing the ceremony the previous week when CNBC anchors Ron Insana and Sue Herera rang the bell. It was wrong. CNN did.
