S&P attempts to buoy reputation on talk circuit

Standard & Poor sent two spokespeople to make the Sunday TV talk show rounds. Neither got an “A” from this media relations pro.

It’s not just a tough time for the U.S. and its revised credit rating, it’s a tough time for the credit rating agency that issued that rating, Standard and Poor’s (S&P). On Friday, it downgraded America’s credit rating from AAA to AA+. An hour later, a $2 trillion (yes trillion) dollar error was discovered in the arithmetic. This, from the same rating agency that completely missed the mortgage backed securities blow-up in 2008.

Nevertheless, it held fast to its downgrade.

There was a thunder of criticism of S&P from a variety of sources including CNBC anchors, senators, the White House and commentators such as George Will.

Someone at S&P, smartly, realized the company should explain itself to the public, and two spokespeople appeared on talk shows Sunday morning.

It was the right idea, except only one did a decent job.

On Fox’s Sunday morning show with Chris Wallace, S&P’s David Beers, who runs the government debt rating unit, was the guest.

He did a nice job answering most questions directly and in a way people could understand. He did, however, evade answering whether revenue increases should be a part of the solution to the problem.

When confronted with the White House criticism of the $2 trillion error, he did not address the error but did claim that the White House misrepresented S&P’s reason for the downgrade (and implied the error was not relevant).

And when Wallace asked about S&P’s failure in the mortgage debt crisis a couple of years ago, wondering if this current move was designed to get its reputation back, he effectively denied the notion directly. He went on to point out that his unit—the government rating unit—had an excellent record.

Beers was understandable in his language and impressive in his willingness to tackle tough questions head on.

Unfortunately, on ABC’s “This Week,” S&P’s managing director John Chambers, was less effective. He was evasive and used confusing jargon.

He ignored Christiane Amanpour’s first question about the $2 trillion error, as she read a statement from the White House and then asked “What do you say to that? It’s pretty blistering.”

Chambers said, “We’ve been saying for some time that the fiscal trajectory of the United States was on a bad path,” but he never directly addressed the error. He did say, mysteriously at the end of the statement, “the numbers speak for themselves.” Which numbers, Mr. Chambers?

One area in which Chambers actually outdid Beers was when he was asked about the possibility of a further downgrade. While both indicated they had a “negative outlook,” Chambers was more specific giving a one in three chance of a further downgrade.

When Amanpour asked about S&P attempting to redeem its reputation after the mortgage debacle, he completely ignored it and explained how the government unit rates the credit worthiness of governments.

Chambers also talked in a language that was sometimes difficult to follow. He spoke about the “sequestration mechanism that will come into play” and used sentences like “it would take stabilization of the debt as a share of the economy and eventual decline” to solve the problem. Huh?

The bottom line is that S&P made the right decision to have spokespeople appear on TV to defend its decision, given the harsh criticism of the company. However, if I were grading, Beers gets a “B” and Chambers gets a “C.” In other words, they could and should have received better training ahead of time.

Tripp Frohlichstein is founder of MediaMasters Inc. His firm specializes in media and presentation coaching, along with message development and message mapping. Contact him at www.mediamasterstraining.com or e-mail tr3@aol.com.

Topics: PR

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