Sanford Bernstein analyst Michael Nathanson has been quite bullish in research notes and press reports about NBC Universal’s competitive position against its peers — but he hasn’t disclosed lately that his brother-in-law is NBCU boss Jeff Zucker.
Nathanson was quoted twice last week — in a Sanford Bernstein colleague’s research report and in a New York Times article — talking up the virtues of NBCU without disclosing his family ties.
In a recent research report on Comcast written by colleague Craig Moffett, Nathanson said, “NBCU’s portfolio of channels is likely somewhat underpriced relative to peers, which could provide additional support for solid price increases during negotiations.”
In a March 1 Times story about the troubles facing network news, Nathanson is quoted as saying about NBCU’s rivals ABC and CBS: “Long term, it’s going to get harder for these guys to exist as they are currently constructed, with the exception of NBC because it can offload the costs on MSNBC.”
In a recent research note penned by Nathanson himself, he said of the Jay Leno-Conan O’Brien fiasco: “While we don’t anticipate that NBC’s ratings fall will completely reverse as they introduce new 10 p.m. programming and return Jay Leno to late-night, these changes could slightly impact NBC’s competitors who have gained share on the national and local level.
“No doubt, a stronger 10 p.m. show could help NBC station owners and negatively affect rival CBS, ABC and Fox local stations, including owned-and-operated stations.”
Regardless of whether Nathanson, a well-respected media analyst who is frequently ranked among the top in his field, made valid points, the fact that his sister is married to Zucker presents an ethical issue.
To be sure, from a legal and regulatory standpoint, experts said that Nathanson has no obligation to disclose his relationship to Zucker since he doesn’t provide research or offer investment advice on NBCU parent General Electric.
Indeed, when he covered Vivendi, which owned a piece of NBCU, his research reports contained this disclaimer: “A family member of Michael Nathanson is a senior executive of General Electric’s media subsidiary.”
Nathanson referred calls to a Sanford Bernstein representative who said that the bank “takes securities industry guidelines on disclosure very seriously, and we abide by the rules all the time, including as they relate to Michael’s industry coverage.”
Still, numerous Wall Street sources, all of whom requested anonymity because they didn’t want to be quoted talking about a colleague’s personal conduct, told The Post they thought Nathanson would do well to resurrect that disclosure if he planned to keep commenting on NBCU, if for no other reason than for appearances’ sake.
Indeed, another media analyst who asked not to be identified, noted a family member works at a news organization not covered by the analyst. However, to avoid any ethical issues, the analyst refrains from speaking to anyone at that news organization.
“There’s a difference between having the right to do something and doing the right thing,” said securities lawyer Bill Singer. “Nathanson has to ask himself as a professional when the line ethically is not to be crossed. If I were him, I’d avoid talking about NBCU altogether.”