Michael Wolff on Digital Media's Favorite Analyst: Often Quoted ... and Often Wrong

Everyone Into Bed With Digital’s Favorite Analyst - S 2016
Illustration by John Ueland

BTIG's Richard Greenfield loves — loves! — being quoted on his favorite subject, the death of TV and the rise of disrupters. Just one problem: He's been incorrect on everything from Facebook stock to CBS vs Time Warner Cable to social game company Zynga.

This story first appeared in the Feb. 12 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

The Partisan battle over who will have maximal control, and reap the greatest benefit, over the world video diet — content producers, traditional infrastructure owners or new over-the-top distributors? — is as much an issue of whom Wall Street supports, and hence who has the resources to fight a long war, as it is about consumer behavior. In this — a fight for what is, arguably, the short attention span of hedge funds — one voice stands out as the loudest, most ubiquitous, most certain, most provocative, most quoted and most always aligned with tech industry interests: the analyst Richard Greenfield.

In his courtship of tech companies, availability to media and tech reporters and alignment with hedge funds, no one may have contributed more to the decline of traditional TV stocks this past summer and fall and to the rise of the new tech-centered TV industry — especially his most passionate cause, Netflix — than this analyst from BTIG, a largely undistinguished broker-dealer. His influence has left traditional media companies not just enraged about what they see as his grandstanding, hyperbole and partisanship, but flummoxed about exactly how Greenfield got to be the first and last word.

The answer in part is that he has astutely played the media against itself. Media business reporters, while often knowing little about business, drive the story about media — currently a very negative one. And more often than not, that story is driven by a spot-on Greenfield quote and his anti-cable-and-broadcast and pro-disruption agenda.

Recently, The New York Times' Andrew Ross Sorkin devoted an entire Dealbook column to a dire report on Disney's ESPN, with Greenfield the only quoted source, saying, "ESPN now appears poised to become Disney's most troubled business as consumer behavior shifts rapidly." (Another analyst, Michael Nathanson, has called the Greenfield anti-ESPN line "hyperbolic drivel.") In December James Surowiecki at The New Yorker, helping to further Greenfield's attack on Time Warner, used Greenfield as his singular expert source for why Time Warner should spin off HBO. "The way people watch TV really is changing dramatically. And no traditional media company is doing a good job of dealing with it," said Greenfield. In January, a Greenfield-sponsored opt-in survey of seemingly no particular rigor or standards about cord-cutting — saying that 56 percent of cable subscribers would drop ESPN in order to save $8 per month — received wide coverage. Indeed, it is quite unusual to find a TV disruption story without a Greenfield quote. (THR often quotes him too.)

Securities analysts are most often an equivocal, consensus-driven, bet-hedging bunch — ever more so if they work for established banks. But Greenfield, at a firm seeking to be noticed, is an analyst who invariably delivers a passionate position. "I'm glad we stand out," he tells me at the suggestion that he is not like most other analysts. "We're a dog with a bone."

Greenfield, whose quotable expertise rests almost entirely on this standing as an "analyst," prompts the question about what exactly an analyst is. In conventional terms, a sell-side analyst — that is, the analyst, like Greenfield, who provides the research to a broker trying to sell securities to his clients (or to get his clients to short others) — is most usually focused on estimating a company's earnings (and is judged on how close he or she gets to the actual number) and on that basis issuing a buy-hold-sell recommendation.

But by becoming promoter as much as analyst ("We take a thematic approach," he says, "and try not to get bogged down with earnings reports"), he has not only made himself one of the most well-known figures in media investment circles, but also a key factor in other analysts' recommendations: His certitude and relentless boosting moves the market.

Fairly, he is not the first analyst to become part of the story. The tech/media divide, and the enormous business flow that accretes to firms that please the tech industry, previously turned media/tech analysts like Mary Meeker and Chris Dixon, now both at venture capital firms, and Henry Blodget, banned from the securities industry for life for pumping dot-com stocks, into personal brands. (Sarbanes-Oxley was meant to help deal with potential conflicts of research departments in banking firms.)

Greenfield is in that name-brand tradition, but, partly by using social media, has brought even more razzmatazz and initiative to his own self-promotion, as well as that of the over-the-top TV industry. His is a daily, or sometimes hourly, retailing of opinions. He blogs, he tweets, he aggressively seeks retweets (he sometimes tag-teams with activist investor Eric Jackson), he solicits reporters, he's a CNBC fixture, and he uses the conference circuit to express his views. "We don't put out thick research," he says, dismissively, of what most securities analysts do.

When I emailed him about an interview, he noted how "bummed" he was that I hadn't quoted him in a recent piece I wrote about Time Warner. Indeed, for a period, The Wall Street Journal banned him from being quoted because, a WSJ reporter points out, his efforts to be quoted became such a bother.

None of this is to say he is not in fact quotable — nor clever. But, as often, his quotableness — an aggressive certainty — as much as it makes him appealing to journalists, makes him wrong.

He may have been prescient about, and indeed contributed to, the amazing run-up of Netflix's shares. But he was a strong supporter of Aereo before the Supreme Court ruled against it and put it out of business. He discounted retransmission fees as a meaningful revenue stream for broadcasters, and those fees now prop up such companies as CBS Corp. and 21st Century Fox. He touted Songza over Pandora (in what TheStreet.com characterized as seemingly like a "vendetta"). He thought CBS was misguided in its ultimately and overwhelmingly successful fight with Time Warner Cable. He confessed to being wrong on Facebook stock. He apologized for an inaccurate call on social game company Zynga's earnings. Indeed, Greenfield often uses "mea culpas" to make more news for himself.

It is not unusual for a prognosticator and pundit and talking head to get things wrong. But the issue in Greenfield's case is his supposed status as "analyst." Rather than a man with a spreadsheet, he's a man with a world view. Asking Richard Greenfield his opinion about the cable bundle is rather like asking Donald Trump his opinion about immigration. It's a tautology.

Indeed, going through Greenfield's extensive and furious output of appearances and blog posts and tweets, it is hard to distinguish what he does from what I do. That is, Greenfield is far more recognizable as a journalist and columnist, developing an ongoing narrative reflecting personal idiosyncrasies and bias, than he is as a true securities analyst.

But then, as a journalist, he would have some troublesome issues, too: He uses his opinions to encourage people to do something he then makes money on — the more encouragement, the more money. The more publicity he gets, the more trades through his firm he causes, the more money he gets. In addition, he presumably sells access, taking clients of his firm out to meet the executives of companies that are pleased to open their doors to him, not least of all because he is their public advocate. Indeed, in courting such favor with rising companies, he can seem less an objective analyst or even enthusiastic journalist than tech posse member or even groupie — or PR guy. For a while, his social media picture had him in Google glasses.

Whether or not this skirts the line, or is not standard behavior, is perhaps not so much the issue as so many media reporters' and CNBC bookers' willingness to use him naively and uncritically and opportunistically, as a source — indeed a constant and often singular source — about the amazing and ineluctable world of media disruption, no matter that most disrupters have yet to earn a cent themselves. It is a clever and powerful way to appeal to both media and markets: say what they want to hear.