Crikey readers come out swinging
Normally I think Crikey is spot on, but I’m a bit bemused by this story. You suggest that because pharmaceutical companies are making a lot of money that this supports the idea that they are “ripping us off”. But I’m not so sure this is right. From my understanding the industry is in a ‘crash or crash through’ situation. Unlike the good old days where the landscape was littered with “magic bullets’ the average costs of a new drug is $US500 million. The solutions society demands are complex and expensive. It seems reasonable that companies get a return commensurate with the risk of R&D. I also don’t think that profitability is a bad thing. The world has recently experimented with political systems that don’t value profit and I think we all agree the results are, er disappointing.
I’m also very suspicious of articles, like the one you reproduce, that make references to “numerous studies”, “another study” without naming one. I also know that the samples that the article is very critical of have been regularly distributed to *me* by my doctor. I’m trying really hard to figure out why something that has saved me a reasonable sum of money over the years is a bad thing.
In the course of my work as a market researcher I’ve recently worked on a project where I spoke to many of the big pharmaceutical companies and I’m not at all sure that the picture you suggest is accurate.
I’m also not sure what this has to do with globalisation. If you want to really get stuck into globalisation perhaps you could look at the cunning distribution of US spelling by the major software manufacturers. Even with “Australian English” US spelling abounds.
Regards, Neil Stollznow
Crikey: Did you notice the 5 pharmaceutical companies in the Fortune 500 top 20 for return on revenue. Eli Lilley made a handy 27.2c on every $ sold last year. Not bad at all. No sector is performing better. And don’t they love it when govts subsidise their products. Have you followed the debate in Sth Africa of late which the industry has finally backed out of in the face of public and govt outrage. Remember the vitamins cartel that got smashed last year. Even fans of globalisation recognise it has its excesses and the pharmaceutical industry is one such example.
The BHP caravan has moved on
Get over it – I couldn’t follow your figures and I doubt whether any normal person could. Most of the shareholders who didn’t express their vote specifically, didn’t care.
It’s a bit like any election, there’s a large percentage of apathetic people involved.
I heard you on 3LO – wouldn’t miss it – but I think you are wrong on this one. The shares of both companies have risen but you argue that because Billiton has risen more (in percentage terms) that somehow represents a transfer of value from BHP to Billiton – how come?
BHP is at all time highs and rising even further. I am holding BHP calls and making money. This is a win-win for both companies. No-one believes that BHP could swing this deal without paying some premium. You can argue that they paid too much but stop grabbing the extreme position of it being $5 billion – who knows what the correct assumptions are on exchange rates and half a dozen commodities? As if you could possibly hope to get consensus on all of these items. Put it in perspective – the previous management lost $3b on Magma (or similar) and that was real money, not theoretical.
In the end the vote was in favour whichever way you cut it and chairmen always get proxies given to them by shareholders who either don’t care, don’t know enough about it, or trust the chairman with their vote..
It’s a great deal for BHP, the option was to stay still (dangerous if not fatal) or grow organically (new mines, at what cost and in what time frame?) or do some magic takeovers (ditto)
Move on, this caravan has passed.
Crikey: Deutsche Bank is saying the merger means they’ve lowered their BHP price target from $28 to $26. A transfer of $5 billion in value is bad no matter what the share price is doing because it would have been doing even more. Methinks Malcolm is in the category of shareholders that never complain as long as they are making money. This was the biggest vote in corporate history and we have a right to see a proper breakdown of the figures. That said, appreciate caravan has moved on.
Gutnick not the only bad President
You say that if Joe Gutnick falls “Technicality” John Elliott is the last remaining AFL club president who is not fit to hold the position. Graeme McMahon is fast becoming a member of that odious class.
The disgraceful decision to lock out AFL members and other football supporters from this Saturday’s game (with the connivance of the AFL) confirms what many people thought when Docklands was mooted. The stadium is a cynical exercise in making money out of football by locking people out. The sad thing is that the financial and football press failed to make any objective comment at the time, and accepted the AFL and Docklands line hook line and sinker. There may have been an excuse for Seven and The Hun given their financial interests in Docklands, but the ABC, The Age and 3AW were very remiss in their uncritical attitude, with The Age going to the extent of publishing several separate full page items of flackery verbatim.
The winners out of Docklands appear to be Essendon (who run most of the souvenir stalls) and the AFL (who retain members’ subscriptions without any obligation to use them to keep Waverley Park up to scratch).
The losers are AFL members (who have a reserve holding 20,000 plus at the MCG, and had a similar sized reserve at Waverley) and happily the investors whose basic arithmetic was so poor that they could not see that the cash flows required to finance the $450,000,000 stadium and return them a profit were extremely unlikely to be achieved.
I have anecdotal evidence that the AFL employed professional canvassers to get AFL members to renew long after the expiry date. Given the treatment of AFL members at last year’s grand final where the Medallion Club members were given preference over long standing AFL members for entry to the reserve resulting in many members being locked out it is not surprising that AFL members are reconsidering the value of their membership.
Given he experience of AFL members with the replacement of Waverley by Docklands, many MCC members have concerns that the proposed rebuilding of the Olympic, Pavilion and Ponsford stands at the MCG will disadvantage them in several ways.
It has already been suggested that subscriptions will increase markedly (say doubled over five years), that a special reserve will be set up a la medallion club, and that the capacity of the ground may be less than currently (having been reduced from 121,000 to 95,000 over the last 30 years by replacing much of the standing room with corporate facilities). This suspicion is well founded, given that the stated capacity at Docklands (54,000) has never been achieved. The biggest crowd recorded at the ground is just over 47,000 and observers at the ground could not see where any more people would fit in. There are about 800-1000 obscured view seats.
Fortunately the Melbourne Cricket Club, unlike the AFL, is in theory answerable to its members, and a challenge to retiring committee members may put things on the right track.
One MCC committee member has an obvious conflict of interest- Mr Daryl Jackson’s firm of architects is pitching for the contract. This same firm is responsible for Docklands.
Crikey: All very good points. The only point I would add is that Eddie McGuire is also on the “unsuitable” list for all his various conflicts of interest.
Pratt jibe a low blow
I think it was not of your usual standard to mention that Dick Pratt has a mistress and lovechild. Just not relevant really (disclosure: the Pratt Foundation has been very good to me and my family without any fanfare, publicity or conspicuous acknowledgement)
All the best, Andrew
Crikey: Agree it was gratuitous and have toned it down. Heck, last year we said the guy had Parkinson’s when he didn’t. Dick is one of the nicer and more honorable guys on the Rich List and everyone has the odd skeleton rattling around.
Disclose sources of stories
I’ve just started reading your flack-hack pr piece and am breaking, mid-read, to reveal my incipient idea for raising media standards and restoring media credibility:
A code whereby the source of every news piece is disclosed i.e.the genesis of the story must be attributed. What caused the story to start?. Did it start life as a media release from a pr company, a media release issued by ???, the story was the reporter’s idea, anonymous news tip, editor’s idea, public announcement, ripped off from another media source’s work etc.
In this era of accountability, why not? I know journos may bristle and utter the red herring about revealing sources but that would be absurd – this code would preclude the actual naming and not threaen any sources at all. Tthe only threat may be to the news organisation’s work ethic or ethics.
We just want to know where the media outlet gets its ideas. Journos love to pride themselves on their integrity but now we all know how the news machinery operates in today’s world of influence and favours, how can they take the same pride without being open about where the story came from?
May I suggest that a news organisation bold enough to do this may find a lucrative niche market?
Crikey: What an excellent idea. Suspect the results would be frightening. And now that our shock jocks are disclosing their register of interests, shouldn’t newspapers do the same? Does McCrann get paid by Packer to go on Business Sunday, what does Mike Sheahan get from Nine?
Bring on the CFMEU Royal Commission
As an employer in the WA building industry I enjoyed the mad monk threatening a Royal Commission into the building unions. If I was Fatty Reynolds I would be saying “please don’t throw me in the vegetable patch Tony”.
Howard has obviously reminded Abbott that the last Royal Commission into unions, the Painters and Dockers, exposed the bottom of the harbour schemes by the big end of town.
This RC might well ask Fatty and other officials where the million dollars of BLF money in the account went after it left Melbourne many years ago. I certainly hope none of it ended up in the Coolbellup Hotel that Reynolds owns. (Editor’s note: this is the sort of stuff Fatty’s enemies put about but we have no knowledge that it is true and regard him as a thoroughly upstanding fellow.) They might also ask about details of Reynolds partnership in the Hotel with a Multiplex director and whether Multiplex who donate generously to political parties might have expedited the BLFs powerful position with deals that have disadvantaged other builders.
I would suggest to Reynolds that he call Harold Clough as a character witness for the unions. Harold is a stalwart of the WA Liberal Party, director of West Australian Newspapers and major builder in Australia and SE Asia, including contracts at the Freeport mine in Irian Jaya.
He was interviewed by Liam Bartlett on ABC radio in Perth last year on his “folksy” Australian Story segment and when asked if he had ever seen any corruption in the building industry replied “never”!
See ya, anon
Crikey: It would be a great Royal Commission so let’s hope they get on with it.
PR exposure most welcome
Some interesting points come out of ‘Everything you wanted to know about the evils of PR’ (20/5), and the attention paid to these issues/relationships etc. by Crikey is certainly welcome. However, Frank Flack is unable to provide any insights that were not already available to anyone who has seen ‘The Sweet Smell of Success’, an American film of the late 50’s . In the film Tony Curtis plays a press agent whose charm and desperate ambition to mix it with the really powerful involves him in a complicated set of patron client relationships from which he is ultimately unable to be released. While ‘the evils of PR’ article demonstrates the extent to which the PR system or mentality has spread from politics and entertainment into almost every sphere of business and life, it fails to provide any analysis or insight that goes the beyond the always worthy but somewhat uninspired advice to look out for who is benefiting and who is suffering as a consequence of a particular item.
For those of us not directly involved in the flack/hack world some further analysis of the manner by which flacks have made themselves an apparently indispensible part of the functioning of business and finance would be appreciated. That is, how has the exchange of information become so fully implicated within the system of exchange that is the ‘market’. Are Flacks needed to mediate certain messages and thus involved in a system of reciprocity that has some grounding in an ethical conception of the public domain? Or, is PR a system of information provision and control that has been from its outset based on blackmail, where information never exceeds its role as token or item of exchange within a competitive game whose only goal is the accumulation of more tokens and thus a higher position in the game?
I remain an interested reader but diagrams between different actors (flaks, hacks and leaders) can only take the discussion so far. Please explain!
Crikey: We’ll certainly do our best to explain how this flack/hack cycle works in coming weeks.
PR is organised lying
Former English journalist Malcolm Muggeridge (long dead) once called the PR industry nothing more than “organised lying”.
Hard to beat that for a description really. If you want to read a dissenter, get hold of some of his stuff. He was brilliant.
Crikey: And who was it who said the advertising industry was the greatest waste of human talent. They’re a bunch of manipulators too you know.