The Plain Dealer has hit rock bottom. When normally reliable Terry Pluto makes a mistake that no blogger would make, it should be a wake up call.
Investigation of downgrade does not equal downgrade.
Above is a screen cap of the cle-dot-com webpage of Pluto’s Sunday article. It states a downgrade occurred at PFJ.
That’s major news.
I wondered how I’d missed it. I knew there was nothing in the WSJ piece revealing a new downgrade of PFJ debt; but the sentence is written as though a downgrade occurred in addition to the WSJ article. (Use of the word “and” is important.) So I checked Moodys (who have announced an investigation) and S&P (who have not).
Here are screen caps of today’s PFJ pages at Moody’s and S&P:
S&P revised its outlook to negative in May. This is not a downgrade. The report reads:
[S&P] revised the outlook to negative from stable on Knoxville, Tenn.-based Pilot Travel Centers LLC. We affirmed our ratings on the company, including the 'BB' corporate credit rating. At the same time, we are affirming our 'BB' senior secured issue-level rating on the company's revolving credit facility and term debt. ... Pilot's liquidity position is particularly sensitive to vendor terms and conditions and unfavorable developments in the investigation could induce vendors to tighten payment terms. We could lower the rating in the event that vendors meaningfully tighten days payable and other payment terms and Pilot was not unable to secure fuel purchases in proportion to its business needs.
Moody’s made their announcement of a “review down” in mid-April and used much the same verbiage (“liquidity concerns”) as S&P. If you want to know more about Moody’s downgrade investigation and how it might impact Haslam, PFJ, and the Browns, please read my piece from April. Nothing has changed in the two-plus months since.
Among the takeaways in the April piece is that PFJ took on $1.1b of additional debt just before Haslam purchased the Browns for $1.01b. In other words, the Browns’ buy appears to have been accomplished wholly through use of PFJ secured debt. Could be nothing, could be something. I.e., if PFJ falters, it’s going to affect the Browns. I.e., if PFJ falters, will Haslam be able to pay Lerner the $305m he is due in two years?
It’s bad enough that ESPN, WSJ, and Forbes are only now noticing the $4b of debt that PFJ carries; two months after Moody’s brought its existence to everyone’s attention. It’s beyond bad when phantom downgrades start getting reported.
Pluto and the PD and cleveland.com owe Jimmy Haslam an apology. A real apology and retraction.
UPDATE 7/2: Pluto responds via twitter:
This quote is directly from WSJ story:”S&P downgraded Pilot’s debt, calling its financial risk ‘significant.’ “
This raises a whole other set of questions.
- What was the context of WSJ sourcing?
- Can WSJ be wrong?
- Forbes ran a substance-less fluff piece in the Rovell mode last week, perhaps the WSJ is also trying to get into the substance-less-sports-business niche?
But since the WSJ story is behind a pay-wall and I don’t care to subscribe, those questions will go unanswered.
That leaves us with the main question: I’m reading a PD piece under a Terry Pluto byline and they get a story wrong. Isn’t the “I’m just quoting the source” excuse the way bad reporting goes viral? It’s my opinion that the writer owns it once he publishes an article under his name. Ownership includes corrections of errors when found.
And that’s probably enough on that.
UPDATE #3, 7/2 PM: Pluto retracts.
Pilot Flying J's credit not 'downgraded,' but clouds still loom over Jimmy Haslam and Cleveland Browns: Terry Pluto When you mess up, you have to fess up. That’s what I need to do when it comes to my Monday column about Jimmy Haslam and Pilot Flying J. In that story, I wrote that his company’s credit rating had been “downgraded.”
That’s the lede of Terry Pluto’s latest article and that’s how Terry Pluto has earned his reputation as a top-end journo. Thanks TP.