Cable News Network: CNN Apologizes to the Chinese People

Introduction On April 9, 2008, during the evening broadcast of The Situation Room, Wolf Blitzer asked Jack Cafferty to comment on the United States relationship with China. Cafferty responded: I don't know if China is any different, but our relationship with China is certainly different. We're in hock to the Chinese up to our eyeballs because of the war in Iraq, for one thing. They're holding hundreds of billions of dollars worth of our paper. We are also running hundreds of billions of dollars' worth of trade deficits with them, as we continue to import their junk with the lead paint on them and the poisoned pet food and export, you know, jobs to places where you can pay workers a dollar a month to turn out the stuff that we're buying from Wal-Mart. So I think our relationship with China has certainly changedI think they're basically the same bunch of goons and thugs they've been for the last 50 years. Over the next month and a half, thousands of Chinese Americans organized outside of CNN studios across the U.S. demanding an apology from Cafferty and CNN. CNN responded with silence, clarifying statements and thin apologies, all of which served to fuel negative opinion and ultimately elevate the story to international headlines. _______________________________________________________________________________ This case was prepared by Research Assistants Takashi Doi, Anielka Munkel, and Phillip Morley under the direction of James S. ORourke, Concurrent Professor of Management, as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Information was gathered from corporate as well as public sources. Copyright 2009. Eugene D. Fanning Center for Business Communication. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form by any means electronic, mechanical, photocopying, recording, or otherwise without permission.

Jack Cafferty and The Situation Room Mr. Jack Cafferty is a veteran of New York nightly news with more than twenty years of experience covering the worlds financial and capital news. He started his career in Reno, Nevada, in 1960. Before joining CNN, he was a news anchor at New York's WB-11, WNYWTV, and Fox 5 News. At CNN, he was a co-host on American Morning, a host of the business show In the Money and an anchor on Before Hours, CNN's former morning program. Mr. Cafferty is based in the network's New York bureau and has received various distinctions in his career including an Edward R. Murrow Award, and Emmy Award and the New York Associated Press State Broadcasters Award.1 Mr. Cafferty has provided insights and commentary to The Situation Room since 2005. Hosted by CNNs main political anchor Wolf Blitzer, The Situation Room is modeled after the White House Situation Room and aims to integrate traditional news gathering techniques with innovative online resources. This political newscast show runs in a three hour block weekly and an hour block on Saturdays, covering politics, security and international news. Mr. Cafferty has been described by many as someone who sounds off and tells it like it is with a curmudgeon-like persona. Controversy is not something new for Mr. Cafferty. On the night before the 2006 midterm elections he called Donald Rumsfeld, then Secretary of Defense, an obnoxious jerk and war criminal. After phone calls from the Pentagon to CNN staffers in Washington D.C., CNNs president and executive producer of The Situation Room urged Cafferty to recant his comments on-air. Following these protestations, Cafferty told CNN viewers You know, Ive stepped over the line.2 CNN Worldwide Founded by Ted Turner in 1980, Cable News Network (CNN) was the worlds first 24-hour cable television news channel.3From its headquarters in Atlanta, the network has expanded around the world, becoming a global brand that offers targeted regionalized services to international audiences worldwide. With 40 news bureaus, its news service is available to over 2 billion people in more than 200 countries in seven different languages.4 CNN became an alternative to the traditional morning and evening news cycle that had dominated television news since its inception by providing around-the-clock news reports and updates. Events that brought global attention to the network include its live coverage of the Gulf War in 1991, the attacks of September 11, 2001, and the United States presidential elections in 2008. __________________________________________________
1 CNN. Anchors/Reporters - Jack Cafferty. CNN.com. 01 May 2009 <http://www.cnn.com/CNN/anchors_reporters/cafferty.jack.html>. 2 Time Inc. CNN's Jack Cafferty Mouths Off. TIME.com. 15 Sept. 2007. 01 May 2009 <http://www.time.com/time/nation/article/0,8599,1662283,00.html>. 3CNN. New Georgia Encyclopedia. 30 Jan. 2004. 01 May 2009 <http://www.georgiaencyclopedia.org/nge/Article.jsp?id=h-2643>. 4 CNN. CNN News at a Glance - Overview. Cnn.com. 01 May 2009 <http://www.cnnasiapacific.com/factsheets/?catID=9>.

According to the Nielsen Ratings, CNN is Americas number one cable news network.5 In terms of news gathering resources, it ranks second only to Britains BBC News. Today the CNN brand comprises nine cable and satellite television networks; five websites, including CNN.com, the first major news and information website; one private place-based network; two radio networks; wireless devices that provide news and information to mobile devices; and CNN Newssource, the world's most extensively syndicated news service.6CNNs main slogan is The Most Trusted Name in News. CNN in China CNN is one of 30 foreign media companies that have an agreement with the Ministry of Industry and Information Technology (MIIT) to broadcast in China. While the agreement allows these companies to broadcast within the country, CNN has reported that the agreement requires their broadcast signal to pass through a Chinese-controlled satellite, allowing the Chinese authorities to control which content is delivered to television viewers.7Furthermore, CNNs reach is restricted in China; only certain hotels, offices and housing developments that are open to foreigners are able to carry the broadcast. Given this regulatory environment, very few Chinese residents have access to CNNs television programming. However, CNNs reach into China is growing through CNNs web site, cnn.com. According to Alexa, 72.4% of cnn.com visitors are from the United States, while 2.8%, the third highest percentage, are from China.8 Comparatively, the British Broadcasting Companys website bbc.co.uk attracts 2.0% of its total visitors from China.9 To strengthen its appeal to Chinese readers, the BBC has recently launched a Chinese language edition of its website. While the BBCs English edition is available within China, their new Chinese language edition is banned within China. According to the China Internet Network Information Center, the number of Internet users in China grew 42% to 298 million from 2007 to 2008 with 91% using a broadband connection.10 With the number of Internet users in China growing rapidly, it is likely that the number of Chinese citizens consuming foreign media will increase. CNN Criticized for Tibet Photo In the weeks leading up to Mr. Caffertys comments on China, CNN was already embroiled in controversy over its reporting. On March 15, 2008, CNN published an article on its website titled, Report: 100 Dead in Tibet Violence. This article included a photo that showed two unarmed people crossing a road with two Chinese military vehicles approaching. Criticism was ___________________________________________
5 The Project for Excellence in Journalism. The State of the News Media 2007: An Annual R eport on American Journalism. Journalism.org. 01 May 2009 <http://www.stateofthenewsmedia.org/2007/narrative_cabletv_audience.asp?cat=3&media=6>. 6 CNN. CNN News at a Glance. Cnn.com. 01 May 2009 <http://www.cnnasiapacific.com/factsheets/?catID=9>. 7China raises pressure on CNN over remarks. Nytimes.com 17 Apr. 2008. 01 May 2009 <http://www.iht.com/articles/2008/04/17/business/cnn.php>. 8 Alexa. Cnn.com. Alexa.com. 01 May 2009 <http://www.alexa.com/data/details/traffic_details/cnn.com>. 9 Alexa. Bbb.co.uk. Alexa.com. 01 May 2009 <http://www.alexa.com/data/details/traffic_details/bbc.co.uk>. 10China tops world in Internet users CNN.com. 14 Jan. 2009. 01 May 2009 <http://edition.cnn.com/2009/TECH/01/14/china.internet/index.html>.

not focused on what the photo showed, but what it did not show. Internet bloggers found the original photo by Getty Images and determined that CNN had cropped out an important part of the photo, a group of Tibetan rioters throwing objects at the vehicles. This created a wave of criticism that spread virally across Internet forums and blogs. Critics held this photo as evidence in their claim that CNN held a bias against China. Five days after the article was published, a 23-year old student at Beijings Tsinghua University launched the Anti-CNN.com website to collect and publish distorted reports from CNN and other Western media outlets. In the first few days of the website being online, the site received more than 2,000 posts by visitors.11 CNN later responded with a statement on their website refuting allegations of bias in its coverage of events in Tibet (See Appendix A). However, criticism of CNN's coverage did not end there. Web sites and theme songs criticizing CNN were created. The slogan don't be too CNN, which means don't be too biased or dont ignore the truth, went viral, and two songs lampooning CNN became popular on China's Internet. Both songs were titled Dont Be Too CNN. Why do you rack your brains in trying to turn black into white? Don't be too CNN, claimed one online singer Murong Xuan.17 The Fallout National Response Five days after his initial comments on China, Cafferty clarified his position stating: Last week, during a discussion of the controversy surrounding China's hosting of the Olympic Games, I said that the Chinese are basically the same bunch of goons and thugs they have been for the last 50 years. I was referring to the Chinese government, and not to Chinese people or to Chinese Americans.CNN also issued a written statement two days later: CNN would like to clarify that it was not Mr. Caffertys, nor CNNs, intent to cause offense to the Chinese people, and [CNN] would apologize to anyone who has interpreted the comments in this way.12 However, the Chinese American community viewed the apologies as insufficient. Following these statements, the U.S. Legal Immigrant Association started an online petition demanding a formal apology from CNN. Ultimately, the petition was signed by more than 45,000 people.13 On April 19, thousands of Chinese Americans gathered at CNN studios in Los Angeles, California, demanding that Cafferty openly apologize and be removed from the air permanently.14 A letter taped to a door of the bureau stated, If our demands are not taken seriously, we shall unite more public support to fight against such racial prejudice.15A second letter slid under the bureau's door criticized CNN's coverage of unrest in Tibet and the anti-

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11 Peoples Daily Online. CNN: What's wrong with you? (2) People's Daily Online. 03 Apr. 2008. 01 May 2009 <http://english.people.com.cn/90001/90776/90883/6386009.html>. 12 CNN. Transcripts. CNN.com. 14 Apr. 2008. 01 May 2009 <http://transcripts.cnn.com/TRANSCRIPTS/0804/14/sitroom.03.html>. 13 CNN. China demands apology from Cafferty. CNN.com. 15 Apr. 2008. 01 May 2009 <http://www.cnn.com/2008/WORLD/asiapcf/04/15/cnn.china/>. 14 CNN. CNN commentator's comments draw protests. CNN.com. 19 Apr. 2008. 01 May 2009 <http://www.cnn.com/2008/US/04/19/cnn.china/>. 15 CNN. CNN commentator's comments draw protests.

Chinese protests that followed the running of the Olympic torch in advance of the Summer Olympic Games in Beijing. In New York, on April 24, 2008, beautician Liang Shubing and teacher Li Lilan filed a lawsuit against Cafferty and CNN, seeking $1.3 billion in damages for violating the dignity and reputation of the Chinese people.16The amount represented $1 for each Chinese person worldwide. Meanwhile, protests continued on April 26 at CNNs headquarters and its San Francisco bureau. CNNs Website Targeted Negative reaction surged after CNNs statement supporting Caffertys reporting. On April 16, 2008, CNNs website, cnn.com, experienced problems that prevented users from accessing the site in what appeared to be a Distributed Denial of Service (DDOS) attack conducted by the Chinese hacker group using the name Revenge of the Flame. People in certain Asian markets, including Japan, South Korea, Hong Kong and mainland China, were temporarily unable to access cnn.com due to the countermeasures taken by CNN to limit the extent of the attack.17 Trust in Media Companies Trust in media companies worldwide has continued to decline since 2005. In Edelmans 2009 report on credibility and trust, the 2009 Edelman Trust Barometer, the report found a sharp decline of trust in television news. The credibility of television news declined from 49% to 36% and the credibility of newspaper articles fell from 47% to 34% from 2008 to 2009.18 Among North America, Asia Pacific, Europe and Latin America, North America showed the lowest level of trust in media companies. In 2008, the Edelman report stated that CNN was the most relied on news source. Globally, CNN, BBC and Google are the most relied-on news sources for information about a company (25%, 17%, and 9%, respectively).19 Similarly, trust in digital media sources for news about companies in 2008 followed the downward trend for all media, with free content sources (such as Wikipedia and Web portals) and social networking sites (such as MySpace and Facebook) declining globally among 35-to-64 yearolds from 38% to 27%, and 20% to 15%, respectively. Among 35-to-64-year-olds, search engines emerged as the most trusted of all digital channels (35%), with markedly lower levels of trust for business (19%) and non-business (16%) blogs.20

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16 International Business Times. CNN Faces $1.3 Bln Lawsuit - $1 per person in China. International Business Times. 24 Apr. 2008. 01 May 2009 <http://www.ibtimes.com/articles/20080424/cnn-time-warner-lawsuitchina-media.htm>. 17 Fowler, Geoffrey A. CNN's Coverage of China is Raising Hackles The Wall Street Journal 19 Apr. 2008. 01 May 2009 <http://online.wsj.com/article/SB120856947042728137.html?mod=googlenews_wsj>. 18 Edelman. 2009 Edelman Trust Barometer. Edelman.com. 01 May 2009 <http://www.edelman.com/trust/2009/docs/Trust_Book_Final_2.pdf >. 19 Edelman. 2008 Edelman Trust Barometer. Edelman.com. 01 May 2009 <http://www.edelman.com/TRUST/2008/TrustBarometer08_FINAL.pdf>. 20 Edelman. 2009 Edelman Trust Barometer. <http://www.edelman.com/trust/2009/docs/Trust_Book_Final_pages.pdf>.

The Chinese American Community The number of Chinese-Americans in the United States has grown steadily over the past ten years. As of 2007, there are over 3.5 million Chinese-Americans living in the United States, or 1.2% of the total population. From 2000-2007, the Chinese-American population has increased by 29%. Furthermore, over 2 million Chinese Americans speak Chinese, the third most-spoken language in the United States.21 In a recent survey of Internet-savvy Chinese Americans, 61% of respondents indicated they rely on Chinese language media for their information. Additionally, the survey found that 69% of Chinese Americans reported a post-graduate degree with a median household income of $55,600 annually.22 U.S. Trade Relations with China Less than a year earlier, on August 15, 2007, Mattel, the worlds largest toy company, announced the biggest recall in its history. The company recalled 436,000 Chinese-made die-cast toy cars that were found to be covered in lead paint.23 Ultimately, this recall of lead-covered toys not only affected Mattel, but later occurred throughout the toy industry. In addition to toys, a series of additional recalls occurred against products manufactured in and exported from China, including contaminated pet food ingredients, childrens jewelry, defective tires and tainted toothpaste. With public concern over the safety of Chinese-made products, in November of 2007, an action plan on the safety of imported goods was created by President George W. Bush, calling for improved certification of imports, greater efforts to keep tainted goods from being shipped to America and for American training to help other countries build up their safety-inspection capabilities.24 However, after pressing China to step up efforts to police the safety of its food and other exports, the Bush administration found Chinese leaders pushing back, with demands for American commitments to insure the safety of American food and goods. During the summer of 2007, China proposed extensive new import inspections for American-made medical equipment such as patient monitors and surgical implants, but did not impose the same rules on domestic rivals.25 These trade issues between the U.S and China produced a wave of negative media coverage (both print and television) on China and Chinese-made products. Chinas Foreign Ministry Demands an Apology Following CNNs statement on April 16, 2008, the Chinese government responded to CNNs handling of the issue. Senior Foreign Ministry spokesman Liu Jianchao summoned Jaime

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21Chinese American Wikipedia, The Free Encyclopedia. 01 May 2009. Wikimedia Foundation, Inc. <http://en.wikipedia.org/wiki/Chinese_American>. 22 Global Advertising Strategies. <http://www.ethnicusa.com/en/market_data/research_prod/index.php?id4=452>. 23 Story, Louise, and David Barboza. Mattel Recalls 19 Million Toys Sent From China. Nytimes.com 15 Aug.2007. 01 May 2009 <http://www.nytimes.com/2007/08/15/business/worldbusiness/15imports.html?_r=1>. 24 Weisman, Steven. China Resisting Pressure on Product Safety. Nytimes.com 06 Dec. 2007. 01 May 2009 <http://www.nytimes.com/2007/12/06/world/asia/06cnd-trade.html>. 25 Weisman, Steven. China Resisting Pressure on Product Safety.

FlorCruz, CNN's bureau chief in Beijing, to the ministry to voice its disapproval. Specifically, the spokesman told FlorCruz that the ministry did not view CNN's statement about Caffertys comments as an apology, and that CNN had not done enough to ease its concerns over Mr.Caffertys behavior.26 With increasing criticism and the intervention of the Chinese government, Caffertys comments were elevated to international headlines. How should CNN respond to the Chinese Foreign Ministry and, more importantly, how should CNN respond to its viewers? Timeline of Events April 9, 2008Wednesday Jack Cafferty, during the broadcast of CNN's The Situation Room, is asked to comment on the United States' relationship with China. Cafferty responds: I think they're basically the same bunch of goons and thugs they've been for the last 50 years.27 The remark sparks a firestorm of criticism among the Chinese American community. April 14, 2008Monday Jack Cafferty clarifies his remarks: Last week, during a discussion of the controversy surrounding China's hosting of the Olympic Games, I said that the Chinese are basically the same bunch of goons and thugs they have been for the last 50 years. I was referring to the Chinese government, and not to Chinese people or to Chinese-Americans.12 April 15, 2008Tuesday At its weekly news conference, the Chinese Foreign Ministry demands an apology from CNN saying Caffertys comments reflect his ignorance and hostility toward China. By the afternoon, nearly 45,000 people sign an online petition condemning his statements as racist and despicable.13The petition demands that CNN discipline Cafferty and apologize to the Chinese people. April 16, 2008Wednesday Chinas Ministry of Information department summons CNN's bureau chief in Beijing to deliver a near identical protest. CNN issues a statement saying that Mr. Cafferty's comments represent his strongly held opinion of the Chinese government, not the Chinese people. The network adds, It was not Mr. Cafferty's nor CNN's intent to cause offense to the Chinese people, and says CNN would apologize to anyone who has interpreted the comments in this way.28 April 17, 2008Thursday Tech-oriented web sites in Asia report calls from hacker groups in China for denial-of-service attacks to be launched against the CNN web site over the network's coverage of unrest in Tibet and Caffertys comments. April 19, 2008Saturday Thousands of Chinese Americans gather to protest in Los Angeles outside of CNN studios on Sunset Boulevard. __________________________________________________
26 Drew, Jill. China Spurns Apology, Keeps Pressure on CNN. Washingtonpost.com 18 Apr. 2008. 01 May 2009 <http://www.washingtonpost.com/wp-dyn/content/article/2008/04/17/AR2008041701599.html>. 27CNN. Transcripts. CNN.com. 09 Apr. 2008. 01 May 2009 <http://transcripts.cnn.com/TRANSCRIPTS/0804/09/sitroom.03.html>. 28 Thomson Reuters. CNN tells China it didn't mean to cause offence. Reuters.com. 16 Apr. 2008. 01 May 2009 <http://www.reuters.com/article/entertainmentNews/idUSPEK25277120080416>.

April 24, 2008Thursday

April 26, 2008Saturday

In New York, beautician Liang Shubing and teacher Li Lilan file a lawsuit against Cafferty and CNN, seeking $1.3 billion in damages for violating the dignity and reputation of the Chinese people.16 Hundreds protest in front of CNN headquarters in Atlanta, Georgia. An estimated 5,000 Chinese Americans gather in San Francisco to protest Jack Caffertys controversial remarks.

Discussion Questions 1. What are the critical issues in this case and who are the stakeholders? 2. How should CNN reconcile reporting the news and discouraging further negative publicity? 3. To what extent did CNNs role as a news company hinder its ability to deal with the issue effectively? 4. How could CNN better support their mission to be The Most Trusted Name in News? 5. To what extent should a news company stand behind the opinions of its journalists? 6. What long-term implications will this event have on CNNs worldwide reputation and future business?

Appendix A CNN Statement on Tibet Coverage (CNN) -- CNN has been singled out for criticism for our coverage of events in Tibet through an antiCNN.com Web site and elsewhere. We have provided comprehensive coverage of all sides of this story, but two specific allegations relate to pro-Tibetan bias. We would like to take this chance to respond to them: Allegation 1: CNN intentionally cropped an image in order to remove Tibetan protesters throwing stones at Chinese trucks. CNN refutes all allegations by bloggers that it distorts its coverage of the events in Tibet to portray either side in a more favorable light. We have consistently and repeatedly shown all sides of this story. The one image in question was used wholly appropriately in the specific editorial context and there could be no confusion regarding what it was showing, not least because it was captioned: "Tibetans throw stones at army vehicles on a street in the capital Lhasa." The picture gallery included in Tibet stories includes the image. We have also published images showing violence by Tibetans against the Chinese. A March 18 story shows Tibetan youths attacking a Chinese man. Additionally, we have published video from the Chinese media apparently showing Tibetans attacking Chinese interests in Lhasa. Allegation 2: CNN referred to Tibet as a country. CNN's policy is to refer to Tibet as "Tibet Autonomous Region of China." In our dozens of stories on the topic to date, we are aware of only two instances where it was incorrectly referenced as a country. CNN's reputation is based on reporting global news accurately and impartially, while our coverage through the use of words, images or video always reflects a wide range of opinions and points of view on every story.

Source: CNN.com. 28 Mar. 2008. < http://www.cnn.com/2008/US/03/28/tibet.statement/>.