Journal Sentinel’s Huge Mistake

At 11:49 Friday morning Urban Milwaukee published a story reporting that Summerfest CEO Don Smiley was awarded a package worth 2.3 million in 2017, which included $1.3 million from five years of deferred compensation and about $971,000 actually earned that year.

Some 90 minutes later, at about 1:20 that afternoon, the Journal Sentinel published a quickie article that had all the earmarks of a “story” by a content farm, grabbing the information from Urban Milwaukee and slapping on a clickbait headline: “Summerfest CEO Don Smiley’s total payout nearly triples to $2.3 million in 2017.”

The tiny article by Bill Glauber and Daniel Bice declared that “His pay was three times more than what he received in total compensation in 2016.”

This was a massive error and wrong in at least two ways. For starters, the reporters were double counting Smiley’s deferred compensation, the amount he was promised in 2016, but was deferred until 2017. Their tripling in pay would only be true if Smiley was paid the $375,672 in deferred compensation in both 2016 and 2017.

Secondly, the claim that his compensation tripled in 2017 is only true if you ignore the fact most of his 2017 pay was deferred from prior years.

If you take the money actually earned in each year, Smiley’s total compensation was $838,875 in 2016 and $971,000 in 2017. His money earned didn’t triple in one year, but went up by nearly 16 percent.

I should note that Howard Sosoff, chairman of the board of Milwaukee World Festival, the parent organization of Summerfest, is an accountant. I had a series of email exchanges with Sosoff regarding Smiley’s pay and he warned me about double counting the deferred compensation, which must be reported on the annual federal tax form both when it is awarded and when it is later collected.

By Saturday, the Journal Sentinel had expanded and replaced the article while adding a third byline, of reporter Alison Dirr, which repeated the errors of the quickie story and added a whopper of a claim: that Smiley’s compensation grew by 734 percent since 2005, when he received $280,864 in total compensation.

In fact, when you look at actual compensation earned, that grew to $971,000 in 2017, an increase of 246 percent, still a huge increase, but nowhere near what the Journal Sentinel is claiming.

Back in the old days, this kind of grossly misleading claim would have never gotten past the army of copy editors at the Journal Sentinel (whose numbers have been decimated in the last decade or so). I have no doubt Summerfest officials have complained to the newspaper about its reporting. Will the paper run a correction?

One final note: the original quickie story by the JS provided a link to the Urban Milwaukee story, but the later story removed this. If the goal is to serve your readers, you would never do this because you want them to have all the information about the issue. So why was this done?

Perhaps because the newspaper’s editors didn’t want to provide any increase in readership for the Urban Milwaukee story. Or because they didn’t want readers comparing the facts in the two stories and questioning how the newspaper came to its inflated conclusions. You be the judge. 

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