Ralph,
Since I've been responsible in the past for putting out investor-relations press releases for several different companies, perhaps it would be useful if I were to outline the effort needed to produce a press release, and the costs associated with it:
1. Somebody has to write the press release itself, a task which includes developing the idea/story for the release, collecting the necessary information from whomever in the company is the "point person" on the particular project, and actually drafting the release. In my personal experience, this can take from half a day to a day to do.
2. Then the release needs to be reviewed internally. This usually involves running it by the afore-mentioned "point person", and often one or two other people, and then rewriting it as needed. This takes 1-2 more hours.
3. Corporate counsel must review it, especially if it relates to IR. Invariably, this requires faxing it to them and 1-3 lengthy phone calls. This takes an additional 1-2 hours.
4. Then it must be distributed. There are two (or more) services which do this (PRnewswire and BusinessWire), and they will generally charge a company from $250 to $750 to distribute it. Without their help, it has almost no chance of making it onto the major newswires, which almost never pick up material which is faxed directly to them.
5. Then, a company invariably obligates itself to send out press releases, either by fax or by mail, to a list of entities, which may include The Napeague Letter, various brokers and analysts, individual investors, nice ladies who the chairman met at a cocktail party two years ago, etc. More time spent and more costs incurred.
6. Of course, I am assuming that this press release is produced internally. If a company hires an outside PR firm to do this, it could cost from $15,000 to $25,000 per quarter, not including the 15% markup which they will add to the charges from BusinessWire.
Net-net, I always figured that it cost my employer between $2,500 and $5,000 to put out a press release, and frequently they have no identifiable impact on the market for the company's stock. Or to put it into specific terms, a couple of TASA press releases each quarter could reduce EPS by $.01.
As a result, I don't worry when I don't see a press release for a while, and I become really worried when I see too many of them....
Bob Davis
The Napeague Letter
napeague.com |
