Yeah people think journos just make shit up, but the top ones (in anything politics, sport, shit video games) know people. They don't make shit up. You don't become a political editor or senior journalist by breaking one of the cardinal rules of reporting
Even though I know no journalists, I would tend to agree. It's wishful thinking that the media makes this stuff up.
Do they exaggerate? Sometimes, though that's more likely a function of the source of the information (ie informal media briefing, leaks, etc). They also get things wrong. Have you ever read a story about something you know quite well only to spot a few errors in the text?
"Tom Baker was the Doctor from 1974-1981. Don't these people know anything?"
"The Atari 800 had two cartridge slots, dammit. Where do they get these luddites?"
"It's MISTER Spock. Doctor Spock was the guy who wrote that parenting book. Sheesh?"
"Purple and Green is in? Puh-lease!"