The Economic Repercussions of Poor Journalism: Rolling Stone’s UVA Case

On April 15th, Four months after originally publishing ‘A Rape on Campus,’ Rolling Stone ended the questions surrounding its authenticity by retracting the article. The article told the, now known as false, story of a young women’s brutal gang rape at the University of Virginia chapter of Phi Kappa Psi. As part of retracting the story, Rolling Stone published a report, conducted by Columbia University’s Steve Coll, of their failings. This report recounts in great detail the egregious errors in their reporting, some of which were as basic as contacting the fraternity in question. But it also points out some of their effects.

It directly states that, “[T]he magazine’s failure may have spread the idea that many women invent rape allegations.”In spreading this idea, the article would create a negative externality for rape victims. Though victims may not read Rolling Stone, others might be more inclined to not believe their story. Some, like Rebecca Weybright, have added that rape victims may feel more frightened to step forward because of the risk of being doubted. By not coming forward, the victims would be unable to get treatment, or professional help of any kind.

And then there’s the fraternity. Not only did this article manage to make it more difficult for rape victims, it also devastated the reputation of Phi Kappa Psi who suddenly had to deal with a nation full of hate. “It’s completely destroyed a semester of our lives, specifically mine. It’s put us in the worst position possible in our community here, in front of our peers and in the classroom,” said chapter president Stephen Scipione1. Members have been ostracized and the fraternity house was even vandalized when someone flung cinderblocks through its windows. This again presents a negative externality. People reading the article might treat Phi Kappa Psi worse as a result of reading the article.

In terms of monetary cost, Rolling Stone will most likely have to shell out a lot to cover their blunder. Not only will they lose demand and revenue like NBC did with the Brian Williams fiasco but Phi Kappa Psi is already putting together a lawsuit against Rolling Stone and there’s always the possibility for more lawsuits. This week, ABC World News Tonight had higher ratings, becoming the highest rated evening news program, than NBC Nightly News for the first time in five years. Thus, demand has decreased, and as a result, revenue has decreased in the aftermath of Brian Williams’s false Iraq War story. NBC has suffered, however, they do not have to deal with a significant increase in costs. If Rolling Stone has to weather a law suit, their costs will increase with the price of legal services and possible payment as a result of the trial. This will notably eat into their profits.

While Rolling Stone’s journalism failed, they did make a final, brilliant business move. By publishing the Columbia University report they were able to control and make money off their own scandal. Anyone wanting to criticize Rolling Stone’s practices would have to go through Rolling Stone. Although Rolling Stone’s staff has shrunk in recent years, the Columbia University report makes it clear that they are not limited by resources. This controversy should not cause any major damage and will definitely not effect a shutdown in the short-run. Even if they couldn’t meet the average variable costs, which lawsuits would bump up a bit, the Columbia University report should keep them going. In the long-run, this controversy will probably fade in the nation’s memory and not affect Rolling Stone in any drastic way. At least for now, however, the image of Rolling Stone is tarnished.

Works Cited

1Coronel Sheila, Steve Coll, and Derek Kravitz. “Rolling Stone and UVA: The Columbia University Graduate School of Journalism Report.” Rolling Stone. N.p., 05 Apr. 2015. Web. 07 Apr. 2015.

Gutierrez, Gabe, Katie Wall, and Jon Schuppe. “Could Rolling Stone Fiasco Keep Rape Victims From Speaking Out?” NBC News. N.p., n.d. Web. 07 Apr. 2015.

Rosenberg, Alyssa. “Rolling Stone Needs to Come Clean about Its Campus Rape Story.” Washington Post. The Washington Post, 5 Dec. 2014. Web. 07 Apr. 2015.

Somaiya, Ravi. “Rolling Stone Article on Rape at University of Virginia Failed All Basics, Report Says.” The New York Times. The New York Times, 05 Apr. 2015. Web. 07 Apr. 2015.

“UVA Frat to Sue “reckless” Rolling Stone.” CBSNews. CBS Interactive, n.d. Web. 07 Apr. 2015.

“A Rape on Campus.” Wikipedia. Wikimedia Foundation, n.d. Web. 07 Apr. 2015.

“Brian Williams Talks about False Iraq War Story.” CBSNews. CBS Interactive, n.d. Web. 07 Apr. 2015.

Yu, Roger. “ABC News Beats Rivals for First Time in Five Years.” USA Today. Gannett, 07 Apr. 2015. Web. 07 Apr. 2015.

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