The terminals are the real business at Bloomberg. (Peter Foley/Bloomberg)

Things are getting real for news organizations that are doing aggressive reporting on China's leadership. It now appears possible that visas will not be renewed for Bloomberg News and New York Times reporters in China, which would mean neither would be able to continue reporting from the world's most populous nation. Vice-president Biden raised the concerns with China's leadership this week, reports David Nakamura. Last week we looked at the tensions between journalism, commerce, and China's aversion to free speech.

Bloomberg News has spent the past two decades becoming one of the world's biggest media organizations. It has 2,400 journalists in 73 countries, a respected wire service, a global TV network, a 1-million circulation magazine. It has a scale and reach that most news outlets can watch with envy.

But the success of Bloomberg News has, to a first approximation, nothing to do with the wild profitability of Bloomberg LP, which is driven by financial data terminals. And that revenue stream is endangered by aggressive reporting by the news operation. It is a story that has some important lessons in the economics of media — lessons that matter a great deal for anyone who believes that journalism plays a unique and important role in society.

Bloomberg News, according to reporting by the New York Times and Financial Times, was on the verge of publishing an investigative report about ties between a Chinese billionaire and the nation's political leaders, only to have editors in New York get cold feet. (Bloomberg executives have denied that they held the stories out of pressure, saying the stories were just not yet ready for publication). The risk for Bloomberg: that aggressive coverage of Chinese leadership will essentially freeze the company's prospects for selling financial terminals (at more than $20,000 a year each) in the fast-growing Chinese market.

Here's the problem the company faces, summed up in one anonymous quote from a former senior executive. “If you have a $9 billion company that is about to be crippled by a news division that loses $100 million a year, shouldn’t you take a breath and think about the implications of what you are doing?” the former executive told the Times.

There's nothing new about the editorial goals of a news organization coming into conflict with what is best for the business, of course. The Washington Post's tough coverage of the Nixon administration's Watergate involvement endangered the company's broadcast licenses. Countless newspapers have faced pressure from major advertisers to soften coverage of this or that.

Deflating though it may be to journalists' egos to hear, in most media businesses, the articles and photographs we so lovingly put together aren't the product, in any meaningful economic sense. In business terms, the print Washington Post is a vehicle for delivery of department store ads and (in the pre-Craigslist era) classified ads for cars and available jobs and everything else under the sun. You may buy a copy of Vanity Fair to read the latest article by Michael Lewis, but its real business is as a vehicle for ads for Louis Vuitton handbags and Cartier watches. Similarly, Bloomberg's real business is selling data terminals that are second-to-none in helping bond traders and other financial professionals make money.

But there is a huge disconnect between the economic model on which virtually all media is based and the popular perception. The power that comes from the printing press (real or virtual) means that the machinations of news organizations are more interesting and important than the scale of their businesses would suggest. Consider that when it was announced that Jeff Bezos would buy this newspaper, the story made the front page of the Wall Street Journal. It is hard to imagine that news of a mid-cap company selling one of its divisions to a private investor for $250 million would make the front of the Journal if it were in any other industry.

The news business, in other words, has an impact on the world that goes far beyond its economic contribution. Every Pulitzer-winning triumph gets toasted, every embarrassing mistake pilloried. And a tough story about political corruption can get a company banned from the world's most populous nation.

The irony is that it is precisely this influence, so outsized relative to the scale of the businesses involved, that make rich guys interested in buying media outlets (the "vanity moguls" as Jack Shafer memorably calls them). Michael Bloomberg may be the ultimate vanity mogul, building Bloomberg News into a much larger organization than the raw economics of the terminal business would suggest is warranted.

What makes the China coverage controversy so hard for Bloomberg the company (and, ultimately, its founder) is that it pits the imperatives of the company against each other.

To maximize influence, Bloomberg the news organization needs a reputation as being fearless, independent and willing to follow the facts where they lead, whatever the financial consequences. Admirably, Bloomberg View has done exactly that with a series of attacks on the too-big-to-fail banks that also happen to be among the biggest customers of the Bloomberg terminal business. But the economic rise of China is arguably the most important story of our time, and for a media organization that wants to truly cover the world, corruption among the nation's leaders is a tremendously important story.

Yet to maximize the value of the business, Bloomberg the company needs to not do anything that will make the quasi-authoritarian government of the world's second-largest economy angry.

One answer to the tension would be to separate the two arms into separate enterprises, though that would conflict with everything about how the company has built its business to date. The news service is deeply entwined with the financial data business in ways that would be difficult or impossible to unravel.

Which means that the decision facing the senior officials of the company (including its founder, soon to exit the New York mayor's office) is a more fundamental one. Which matters to them more, influence or money?

Disclosures: Where to start? The writer of this piece once wrote a freelance piece for Bloomberg BusinessWeek, and has appeared on Bloomberg Television. The editor of this blog has a column with Bloomberg View. And The Washington Post has a partnership with Bloomberg for its news service. Welcome to the incestuous world of media.