November 29, 2006
As an IR professional for nearly 10 years who has consulted for dozens of public companies, I find PR Newswire and BusinessWire's criticism of NASDAQ's proposal to be a thinly veiled case of "sour grapes" and a self-serving attempt to prevent honest, free market competition.
Both are highly reputable and successful global wire services that have built their success, in part, on bundling their services with other providers of services to publicly traded companies. For example, PR Newswire (PRN) for numerous years was the only provider of free news releases for CCBN's clients (prior to its acquisition by Thomson Financial) and I used this benefit even for clients who otherwise had their news releases distributed through other wire services. More often than not, the clients made no change in their service as a result of getting freebie. Today CCBN's clients can choose either to have a free PRN or free BW advisory release sent out -- or they can use their own wire service.
The NASDAQ proposal does not prohibit or limit its client companies from using other wire services or other IR service providers nor does it require companies to "pay double" for these services if they wish to use their own provider (I don't know where this argument is coming from -- to me it sounds like funny math). For the vast majority of companies the proposed rate hike for NASDAQ companies is comparable to rates for other markets.
Instead, like any other smart service based company, NASDAQ is trying to provide its clients with added incentive to remain on their exchange by providing value-added, complimentary services. Much like CCBN Thomson does with its offers of free PRN and BW advisory releases.
At the end of the day, if PRN and BW continue to deliver competitive pricing, quality service and products, then they should have nothing to worry about.
I support NASDAQ's attempt to provide value-added, complimentary services to its customers. Adoption of this proposal will encourage greater competition, better pricing and better service in the market for IR services.