A Reuters report in this morning’s Globe and Mail describes changes introduced by Morgan Stanley and their ad agency into the contracts they’re proposing to use in booking print advertising.

“Under the policy, Morgan Stanley wants publishers to tell it about any objectionable stories that will be run in their newspaper or magazine,” according to Reuters’ sources.

The clear implication is that the mighty Morgan Stanley is threatening to pull lucrative advertising from any publications running stories critical of the firm.

The Reuters piece points to coverage of the new contracts on AdAge.com, including this genuinely disturbing clause:

“In the event that objectionable editorial coverage is planned, agency must be notified as a last-minute change may be necessary. If an issue arises after-hours or a call cannot be made, immediately cancel all Morgan Stanley ads for a minimum of 48 hours.”

The request has apparently been made to a number of prominent news outlets, including The Wall Street Journal and USA Today.

As leading business newspapers, it would be very difficult for these guys not to write about Morgan Stanley, especially during the company’s ongoing battle with disgruntled former execs and shareholders.

It might be tempting to simply deny the firm the oxygen of “earned media”, but that would be almost impossible for a paper such as the WSJ to contemplate – how can the leading business newspaper in the States possibly avoid writing about Morgan Stanley, whether its good news or bad?

At the same time, any editorial board with an ounce of integrity must surely object to this kind of extortionate shake down.

Whether they intended to or not, it looks like Morgan Stanley have just introduced a clear test of editorial probity. Any newspaper that accepts paid advertising on these terms is displaying, at best, questionable integrity, IMHO.

It might seem extreme, but I think the cleanest response would be to refuse to take Morgan Stanley’s ad dollars, and continue to run whatever stories the paper sees fit to run completely free of any coercive restraint.