There is an extraordinary editorial in today’s Telegraph. It attacks Pacific Brands’ use of a PR company in handling its current crisis. Taking a guess that the fee is $50,000 a month, it says:

The same company that claims it has to move operations off shore to continue making a profit is evidently making such a profit already that it can afford truly gigantic PR bills. A PR company at this point might advise Pacific Brands to stop employing the services of a PR company.

No. You idiots. It wouldn’t.

But the last couple of weeks have seen Sydney’s Daily and Sunday Telegraph wage a populist, attention-grabbing campaign, which may turn out to be one of the most ill-advised stunts in Australian media history.

The newspaper’s coverage of Pacific Brands has plunged the company into a deep PR crisis which it will struggle to bounce back from.

Now some of it is the company’s fault. Although it had limited options, it clearly hadn’t covered all of its bases with its announcement that it was ending its Australian manufacturing. So the shock of that was always going to create damaging headlines. There’s only one way that mass Australian job losses is going to be written.

But things got particularly bad for the company when the Telegraph seized upon the issue of CEO Sue Morphet’s salary. A promotion from boss of the underwear and hosiery division to CEO saw her income rise dramatically — although not exactly into Sol Trujillo territory.

But it was enough to create headlines about her being given a giant pay rise while chopping jobs.

The backlash then shifted onto individual celebrities who act as spokesmen for specific brands within the portfolio. Among those being put under pressure were Pat Rafter and (daughter-in-law of the Tele’s owner) Sarah Murdoch.

And at the weekend, the Telegraph got another scalp when Pacific Brands was forced to scale back its Bonds sponsorship of the Melbourne Fashion Carnival.

It’s hard to think of another example when a brand has found its reputation being shredded in such a way. Possibly James Hardie, although in this case nobody has died of asbestosis.

It would be naive to attack the Telegraph merely because it is making an idiotic case — although it is, by the way. (It appears to be offended that the company is continuing to market its products, equating PR fees, sponsorship and advertising as spin, rather than the engine that drives sales. There’s either a deliberate or a childish failure to understand that if you don’t market your product, it doesn’t sell.)

But depressing as some may find it, the Telegraph is not in the business of being right. It is more in the business of entertaining than it is in educating and informing. That’s tabloid life. The most successful tabloid editor of all time, Kelvin McKenzie of The Sun in the UK (a stablemate of The Telegraph as it happens) was never accused of a slavish commitment to accuracy.

And if you had any doubts on the Telegraph’s approach, then last night’s Media Watch offered an excellent example of the Tele’s commitment to whipping up a yarn.

But let’s skip the journalistic hand-wringing. This fight is bad business for the paper. This is why I think the Telegraph is on a disastrous course. Whether it has declared it or not, its end game seems to be to destroy the reputation of Pacific Brands. In a free press, fair comment goes a long way, so it’s perfectly at liberty to run ill-informed stuff like today’s editorial. Particularly when politicians are pandering to it.

But what happens if it gets its way? Pacific Brands is still a company that will employ 5000 Australians. As well as Bonds, it owns great brands like Holeproof, Berlei, King Gee and Stubbies, to name but a few. Readers are fickle. Will they really thank the Tele for leading the witch hunt which will ultimately do a great deal of damage to the company?

And let’s be blunt. It’s bad business for another reason. Pacific Brands spends $35m a year on marketing. A fair chunk on that will have gone to News Ltd in the past. If it survives (and I think it will), the company is not going to take a view that its job is to subsidise press freedom.

The only question will be whether it withdraws its support just from the Tele, or from News Ltd as a whole. However, it is interesting to note that sister title The Australian has taken a much more temperate approach.

From where I sit, The Tele has gone mad.

Peter Fray

Help us keep up the fight

Get Crikey for just $1 a week and support our journalists’ important work of uncovering the hypocrisies that infest our corridors of power.

If you haven’t joined us yet, subscribe today and get your first 12 weeks for $12.

Cancel anytime.

Peter Fray
Editor-in-chief of Crikey