Research

Common Media Holding Companies and the Uniqueness of Business Press Content

• Co-authors: Kenneth Merkley (Indiana University), Joseph Pacelli (Harvard Business School), and Brady Twedt (Texas A&M University)

• The Accounting Review, Vol. 100, No. 1 (January 2025): 381-405

• Abstract: We examine how common media holding companies impact the uniqueness of business press content. Consistent with common media holding companies reducing the diversity of perspectives among journalists, we find that media outlets are more likely to cover the same earnings announcement and utilize more similar tone and content when they belong to a common holding company. We provide evidence that these effects are enhanced by outlet reach and economic incentives to share content. Finally, we provide evidence consistent with coverage by common media holding companies impeding price formation. Overall, our findings suggest that content within common media holding companies is less diverse, and that this may have negative implications for markets.

Working Paper: After-Hours Market Reactions and Media Coverage of Firms’ Earnings Announcements

• Committee: Kenneth Merkley (Chair), Brian Miller, Noah Stoffman, and Jim Wahlen

• Abstract: This study examines the dynamic relation between the market’s demand for information about firm performance and the media’s supply of information. Using the immediate after-hours trading following firms’ earnings announcements as a novel setting, I find evidence that stronger initial reactions trigger greater media attention, especially for smaller firms and firms with limited information environments. Consistent with the media reinforcing the initial market reactions, I document a positive relation between the initial after-hours market reactions and media article sentiment. However, when the initial market reaction is negative, I find a higher level of disagreement on article sentiment among media outlets. In addition, I find that the media intensifies firms’ initial after-hours market reactions and affects their regular-hours market returns on the next trading day. Overall, the evidence suggests that when covering firms’ earnings announcements, the media attends to the immediate market reactions and supplies information in response to the market’s demand differently. These results shed important light on the economic consequences arising from the dynamic interactions between the media and capital markets.

Working Paper: The Media's Emphasis of Earnings Benchmarks

• Solo-authored

• Abstract: In this study, I examine the media’s emphasis of earnings benchmarks in article headlines to convey earnings news. First, I provide evidence that there is significant variation in earnings benchmark mentions across media outlets’ headlines covering the same earnings announcements. I find that the frequency of headlines mentioning year-over-year earnings changes has decreased significantly over time, while mentions comparing earnings to analysts’ consensus forecasts remain common and stable. Notably, the frequency of headlines that do not emphasize any earnings benchmark has increased significantly. I also examine how media outlets’ emphasis of different earnings benchmarks relates to firm and media characteristics. Second, I focus on the impact of the media’s emphasis of benchmarks on investors’ earnings benchmark preference at the earnings-announcement level. I find that the market response to the analysts’ consensus benchmark increases as media headlines more frequently mention this benchmark, but find no difference for the other earnings benchmarks. Overall, my study extends the extant research on investors’ benchmark preferences and examines an unexplored mechanism through which the media potentially influences investors’ use of earnings benchmarks.

Work in Progress: Compensation Responses to SEC Investigations of Connected Firms

• Co-authors: Terrence Blackburne (Oregon State University) and Jason Xiao (Binghamton University)