Foreign journalists club in Tokyo loses its luster

February 26, 2012


The Foreign Correspondents' Club of Japan (FCCJ) in Tokyo's Yurakucho district has served as a haven for overseas journalists reporting on Japan’s breathtaking changes since the end of World War II. It was the place to be for media people and often the venue for news conferences by the top newsmakers of the day.

But now, the famed club is mired in problems and confusion. Amid a changing media environment, the FCCJ management itself has been embroiled in prolonged disorder and disruption culminating in a lawsuit last year between management against employees.

After its nearly 70-year proud history, can the club survive?

* * *

More than 200 foreign and domestic media representatives packed the FCCJ on the 20th floor of the Yurakucho Denki Building in front of Yurakucho Station in Tokyo last November. They wanted to hear the words of Michael Woodford, the ousted CEO and president of Olympus Corp., who had instigated investigations into dubious accounting practices at the company.

Demand for the news conference was so great that three rooms had to be combined to contain the crowd. The event was covered by the world's major media outlets, including a representative from the U.S. Wall Street Journal who was live-blogging the proceedings.

The Foreign Correspondents Club was established soon after World War II had ended in 1945 by reporters accompanying Gen. Douglas MacArthur, Supreme Commander for the Allied Powers. During the Korean and Vietnam Wars, the club was crowded with reporters who used it as a stopover point while covering the Cold War conflicts. This was an age devoid of mobile phones and e-mail, and pictures from the 1950s of bow-tied reporters engaged in friendly banter remain on the walls of the club.

Even after moving to its present location, the FCCJ still boasts a members bar and dining facilities that can accommodate 100 people.

Television networks have often shown news conferences conducted at the FCCJ. Symbols of their eras, such as boxer Muhammad Ali and Sony founder Akio Morita, have given interviews there. In 1974, the club became a hotbed of investigative reporting into the questionable financial dealings of then Prime Minister Kakuei Tanaka, leading to his eventual resignation.

At its general meeting in December 2011, the club decided to become a public-interest corporation. In 2008, the laws changed, and incorporated associations such as the FCCJ had to choose between registering as general incorporated associations or undergoing mandatory reviews to become public-interest corporations.

The terms for becoming a public-interest corporation are strict. However, people who subscribe to the club can receive preferential tax treatment on their memberships, so the club could expect to see revenue generated through membership fees.

But the truth is that the club's finances are in tatters. The number of regular members, such as foreign correspondents stationed in Japan, totaled close to 500 in 1992 after the collapse of the asset-inflated bubble economy. That figure had shrunk to about 300 at the end of last year.

According to income and expenditure statements, the club had income of almost 900 million yen ($11 million) in fiscal 2006. However, with membership fees and restaurant revenues declining, income fell below 800 million in fiscal 2010. In 2008, the club posted a deficit of 20 million yen. The deficit for 2010 is also expected to be substantial.

Bureau closures in Japan

The root of the downturn lies in the changing media environment.

In the years leading up to about 1990, when the Japanese economy was booming, all eyes were on Japan. The world's attention is now focused on emerging nations like China.

Additionally, with the spread of the Internet, traditional media organizations, such as newspapers, have curtailed their spending. Western media organizations, which used to have a presence in Japan, have had no choice but to close their bases in Tokyo.

According to the Foreign Press Center/Japan (FPCJ), which promotes news gathering by overseas media in Japan, the number of foreign news organizations in the country declined from 288 in 2001 to 179 in 2011. (The figures are based on the number of press cards issued by the Foreign Ministry.)

Representative of this decline, U.S.-based Time magazine in 2010 closed its Tokyo bureau, which originally opened in 1945.

This spring, the British magazine The Economist will bring back to its London office one of its two correspondents based in Tokyo.

"Although the rise of China is a factor, the biggest reason is cost,” said Tokyo Bureau Chief Henry Tricks. “With the yen appreciating to such heights, Japan has become the most expensive place in the world."

With the spread of the Internet, reporters' movements are also changing. Martin Fackler, the bureau chief for The New York Times, said he only visited the FCCJ when necessitated by a news conference.

Things are different now; news is transmitted on the Internet 24/7. As a result, workloads have increased.

"The situation is like a news service/magazine hybrid. I'm busy and don't have any free time to visit the club," Fackler said.

Pressured by the changing external environment, the FCCJ recently embarked on restructuring efforts to reduce costs. But what resulted was a lawsuit.

Last October, seven FCCJ employees in their 50s, claiming they had been subject to illegal demotions and salary cuts, sued the club seeking validation of their previous standings and payment of the reduced portion of their pay.

According to the suit, the club last April demoted seven employees primarily working reception and the bar, and reduced their supervisory benefits by between 15,000 yen and 70,000 yen a month. Three of the seven also argued they were pressed to retire, quoting the club's manager as saying last February, "If you leave now, you will receive additional severance pay. If you don't, you'll be demoted."

One of the plaintiffs, a male chef in his late 50s, started working at the club about 40 years ago. An acquaintance introduced him to the club when he was looking for a job after completing culinary school. The foreign journalists using the facilities at the time were generous and pleased with his cooking, often giving him tips. "It was a great place to work," he recalled.

However, last April, he was demoted from the managerial ranks to an ordinary cook, and lost his monthly 50,000 yen position allowance in the process.

"I understand that the club is trying to right itself, but they're going about it the wrong way,” he said. “Taking my staff into consideration, I had no choice but to take action."

According to a person concerned, some in the club's management consulted with labor law specialists before going ahead with the demotions as part of the restructuring plan.

In early February, 2012, the seven plaintiffs agreed to settle the lawsuit for uniform payments of 150,000 yen each and other conditions. However, the club's labor union is now raising criticism about other work-related problems, and if the relationship between labor and management continues to worsen, it could hamper the club's efforts to rebuild itself.

On condition for becoming a public-interest corporation is to have more than 50 percent of expenditures allocated to nonprofit activities. Of the club's estimated total outlays of 800 million yen, more than half are currently consumed by its restaurant business, which cannot exactly be said to be for the public's benefit. This means the FCCJ does not fulfill the requirement under its current setup.

Taking into consideration the burden of the restaurant's costs as well, the club's directors have considered ridding themselves of the business and outsourcing its operations. It is difficult to determine whether such action would proceed smoothly.

The club still has reason to exist

The FCCJ’s management has also been a problem. In 2009, a new American general manager was criticized for, among other things, the way expenses were managed. He resigned only one year after taking the post. A few years earlier, former president, who was expelled from the club, petitioned the courts for a temporary injunction to get his old position back.

The club was forced to spend a lot of money to deal with these "scandals," sources said.

Many people point to the club's governance in explaining why the management troubles have not been rectified.

The club's membership comprises around 2,100 people. The makeup primarily consists of about 300 regular members who are correspondents working full-time for foreign-based media organizations and Japanese journalists who have experience working as foreign correspondents abroad, and approximately 1,500 associate members who are not reporters but are professionals in the business community.

Additionally, there are about 100 regular employees, such as the chef mentioned earlier, who are responsible for day-to-day operations in areas such as the restaurants and reception. The general manager is in charge of them.

A board of directors composed of 10 people chosen by and from among the regular membership and led by a president is responsible for overseeing the general manager who is responsible for execution and implementation of the operations.

However, insiders say the leadership has long been unable to properly manage the club.

The foreign correspondents are busy writing stories and flying about Japan on assignment, and they are not management professionals to begin with. Since many of them get transferred after a few years, they become lax toward their board responsibilities.

"Monitoring of management is dysfunctional, and things like compensation levels for employees have not been checked," said one of the club's executives.

Current President George Baumgartner, a reporter with Swiss Radio and Television, said members of the board, revamped a year and a half ago, intend to proceed with reforms aimed at turning the club into a public-interest corporation.

Although the club is facing a host of challenges, the voices extolling the significance of its existence are firmly rooted.

Last November, Fackler of The New York Times was at Tokyo Electric Power Co.’s Fukushima No. 1 nuclear power plant, which was crippled by the tsunami last March. It was the first time since the Great East Japan Earthquake that the government and TEPCO had opened the site to the media.

Although more than 30 members of the Japanese press were in attendance, only four people represented foreign-based media organizations. One of them was Fackler, and he was the only writer among the small group.

"If journalists from other countries such as Germany were present, reports could be made from more diverse perspectives. The FCCJ is helpful when requesting that the government improve its support for media coverage," he said.

“Foreign Correspondents in Japan,” a book published by the club more than 10 years ago to commemorate its 50th anniversary, puts it this way: "With the advance of the digital revolution, the club's necessity has diminished for young correspondents. However, in order to preserve the tradition of the freedom of the press, participation by the next generation of journalists is essential."

With its membership aging, will the club be able to protect its good traditions and continue in a style suited for today? Little time is left for rebuilding.

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More than 200 foreign and domestic media representatives packed the FCCJ last November, when Michael Woodford, the ousted CEO and president of Olympus Corp., had a news conference. (Asahi Shimbun file photo)

More than 200 foreign and domestic media representatives packed the FCCJ last November, when Michael Woodford, the ousted CEO and president of Olympus Corp., had a news conference. (Asahi Shimbun file photo)

  • More than 200 foreign and domestic media representatives packed the FCCJ last November, when Michael Woodford, the ousted CEO and president of Olympus Corp., had a news conference. (Asahi Shimbun file photo)

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