All the News That's Not Really News.

BUSINESS World News" has attracted some of the most powerful figures in American business and politics -- people like Intel Corp. founder Andrew Grove and West Virginia Sen. Jay Rockefeller.

It has helped influence the passage of national legislation, and may well have caused the stock of one to-be-profiled company to hit a 52-week high. It is hosted by an Emmy-winning broadcaster and appears on such outlets as CNBC, the Discovery Channel, the Learning Channel, Bravo and selected CBS affiliate stations.

There's just one difference between "Business World News" and other news-magazine shows: It's a commercial. Actually, a more appropriate word might be "documercial."

The line between news and promotion on TV long has been a blurry one. P.R. agencies routinely craft "video press releases" about their clients that sometimes find their way into news coverage. A number of documentary-style programs have been criticized for accepting money from the subjects they profile.

But the documercial is a relatively recent phenomenon that is becoming more common as cable networks proliferate. To some, they are especially unsettling -- in some ways more so than the controversial profit-sharing arrangement between the Los Angeles Times and Staples Center that centered on the paper's Sunday magazine.

"I think this really is disturbing," said Bryce Nelson, chairman of the Annenberg School for Communication at USC "This is much worse than the Staples thing. At least the Times retained control of their own editorial product."

Nelson believes shows like "Business World News" should disclose to viewers that they are watching profiles that have been paid for by their subjects. In fact, there is such a disclaimer, but it only consists of a brief announcement before and after the program. Within the body of the broadcast, there is nothing to indicate the show's tree nature.

Similar to infomercials

In fact, it would be nearly impossible to tell the difference between "Business World News," produced by Studio City-based TVA Productions, and a conventional TV news-magazine. It is a 30-minute show, hosted by a pair of former Los Angeles TV anchors, that profiles from one to six companies, usually in five-minute segments.

Even TVA Productions President Jeffery Goddard acknowledges that some viewers likely will mistake "Business World News" for a conventional news show. And while producers send written disclaimers to interview subjects explaining the show's nature as sponsored programming, Goddard says it's possible that some of the high-level guests interviewed might have mistaken it for something else.

"Admittedly, when they hear the name `Business World News,' they might be thinking it's `World News Tonight' on ABC News," Goddard said.

Still, he says it's not his intention to fool anyone. "The way I justify it is, this is positive news, let the rest of the media dig up the negative stuff," Goddard said.

TVA buys time to air the show from the stations and networks in 30-minute segments, just like infomercial producers do. The companies profiled have paid from $25,000 to $50,000 for production of a 10-minute segment, over which they maintain editorial control. A shorter version is edited down for broadcast on "Business World News," while clients get to keep video and CD-ROM copies of that longer segment for their own promotional purposes.

The show is hosted by Mario Machado, an Emmy-winning broadcaster, and Penny Griego, a former anchor on KCBS-TV Channel 2 who played a TV news reporter in "Volcano" and "Mighty Joe Young."

Lending further credibility to the show are the heavy hitters who have appeared, such as Grove and Rockefeller, as well as former David E. Kelley Productions President Jeffrey Kramer and high-level executives from Boeing Co., Motorola Computer Group and IBM.

Not all of them seem aware of the nature of the show. Grove, who appeared on a segment profiling travel agency Casto Travel, "has no knowledge of the program," according to Intel spokesman Tom Waldrop. "His understanding was that it was for (Casto Travel's) internal usage," Grove has long used the services of Casto Travel.

Texas stock Is touted

In at least one case, the show's influence might not have involved an actual broadcast. On Dec. 29 and 30, PRNewswire put out a press release announcing that Adair International Oil and Gas Inc., a company in Houston whose stock normally trades for pennies, had been selected by "Business World News" as a "high growth company for the new millennium." There was no mention in the release that Adair had paid a fee to be included among the companies considered by the show for its special millennium profile subjects. (The Adair profile has not yet run.)

By Jan. 3, Adair's stock had hit a 52-week high, closing at $1.14, up from 60 cents on Dec. 29.

Goddard said the PRNewswire release was a mistake -- it was supposed to include a disclaimer revealing the nature of "Business World News." He said he immediately informed officials with Adair of the oversight and asked them to submit a correction to PRNewswire.

But another release on Adair's selection was sent out on Dec. 30 that did not contain the correction. It was not until Jan. 4, after the Business Journal contacted Adair Chairman and Chief Executive John W. Adair, that the correction was sent out. On Jan. 4, Adair Oil closed at $1, down 13 percent, only to jump to a new 12-month high of $1.47 on Jan. 5.

Adair said the stock uptick had nothing to do with the release, though he conceded that the company made no other announcements at the end of December. Penny stocks are notoriously volatile; though Adair Oil had been flat at below 20 cents a share for most of the year, it began spiking to above 48 cents in mid-November -- presumably based on announcements about an exploration deal in Yemen and a letter of intent to buy another firm.

Whether or not the uptick was due to the "Business World News" release, executives with several other companies believe they have benefited from their association with the show.

One such company is Long Beach-based Senior Care Action Network (SCAN), a nonprofit "social HMO" that was the subject of an entire 30-minute episode.

The "reporters" at "Business World News" convinced Rep. Bill Thomas, R-Bakersfield, and Rockefeller, D-W.Va., to do interviews on the segment.

SCAN provides full long-term care benefits -- such as for the services of housekeepers, cooks, and personal assistants -- so that people who would otherwise be forced to move into a nursing home can live at home. These benefits are paid for by Medicare, but SCAN had a cap on its enrollment of 36,000. The "Business World News" segment was used as part of a lobbying effort to get the cap raised.

Ultimately, Congress did vote to raise the cap. While SCAN spokesman Paul Kenkel can't say for sure that the "Business World News" segment was the cause, he says it certainly helped.

TVA Productions is not the only documercial producer. Its competitors include Herndon, Va.-based Business America Television, which produces a documercial called "Business Now"; Richardson, Texas-based Criterion Productions Inc., which produces a series called "Champions of Industry"; and Boca Raton, Fla.-based TV Interactive, which produces a series of documercials with such titles as ".com" and "Healthy Solutions."

Selection process cited

Officials with TVA insist that they don't just profile any company with a checkbook. Each potential client is screened through TVA's executive selection committee, which is made up of "award-winning writers, producers, directors, editors and P.R. execs," according to TVA's marketing materials.

The selection committee is chaired by Goddard, who has no journalism experience. He does, however, know what sells.

TVA started out in 1987 as a producer of direct-response video brochures -- marketing videos, usually for cars, computers or cruise lines, that are mailed to potential customers just like a direct-mail piece. It later expanded to a variety of production ventures and now the majority of its business comes from creating 70-mm water-screen films -- movies that are projected onto a screen made out of water spray. Goddard believes that by the end of 2000 the documercials will make up the majority of TVA's business.

"We don't have a Stone Phillips, like on `Dateline,' but we're getting there," Goddard said. "We want to have a `Dateline' level of recognition and credibility."