I had exactly that argument with several of my bosses, mainly in the context of reporting progress on engineering projects. My preference was "bad news first" - not trying to minimise how bad it could be. That way you get several reports after that painful one where you can say "look - it's not going to be as bad as we thought", and leave the customer with a stronger memory of that good news and only a fading memory of what went wrong.
But it does seem we are in a minority on this one, and I never won the argument. Pretty well everywhere, the good news gets exaggerated and admission of failure gets suppressed. There is a whole industry of advertising and PR▸ built on doing it. Of course politicians are if among the worst. And journalists - not a blame issue, but headlines are always written promising a "bigger" story than the real one.
In big projects, the same thing happens internally. In extreme cases, top management may set up a reporting system that so penalises bad news it never gets any - as in Crossrail, or the Jubilee Line extension before that.
And isn't this all related to the concept of delayed gratification - as in that mean psychological test done on kids?
Projects small or large have a P / political control who control or influence the funding and need to agree to the project, from the small jobs at home to the grand schemes like
HS2▸ .
The funder and or those who need to agree if you give them the bad news before you start you may never get started .................. certainly works for me a home when it comes to redecorating
Projects always want to start on a point of realistic optimism what gets frustrating is when its clear things are going off track and a senior in the project decides to supress the news to those outside the project hoping things will recover and they never do