July 2007 Archive
My daughter had to undergo withdrawal last week while at the AAU Junior Olympic Inline Hockey Games in Taylor, Mich.
No Gatorade.
Well, there was Powerade, an apparently inferior drink made by Coke. (Note to Coke: please take notice of the word apparently in the preceding opinion, which is not held by me, but by a seventeen-year-old. Don’t sue.) She further stated that Powerade “tasted like it clumped in my throat.” (Again, Coke: it’s a quote. It’s not me.) She also made some other comments, but I told her not to use that language and we bought Dasani bottled water for the rest of her games. (Satisfied, Mr. Isdell?)
Although presumably Pepsi is gratified by at least one young athlete’s loyalty, it hasn’t been resting on its laurels. The company announced that it was coming out with a low-calorie version of Gatorade later this year, for the less-active athlete or for athletes to drink in between bouts of exercise.
Interestingly enough, Coke already has a low-cal version of Powerade. And according to Slate, the two companies have already sued and settled over competing claims regarding Coke’s ad for Powerade Option vs Gatorade. So why would Pepsi put out its own lite product after successfully pointing out that you want high(er) calories in a sport drink?
Because diet anything is good: If they could make diet water, they could. Because there is so much competition in the sports and fitness drinks industry that only by dividing your brand into smaller and smaller segments do you have a hope of retaining market share and brand loyalty. With a recent health report stating a strong link to soda and heart disease, both Pepsi and Coke and their eponymous soft drinks are under the gun and both are seeking to boost sales of non-carbonated beverages.
So pretty soon my daughter will have more Gatorade options to choose from — not just red, orange, green, yellow (her favorite), and blue but diet and regular. I’m betting she’ll stick with the original formulation though. Who can check an offenseman into the boards on less than 50 calories a serving?*
* Technically, there’s no checking in inline hockey. Right.
After months of semi-calm cooperation with Viacom after the media giant filed a $1 billion lawsuit over copyright infringement, Google CEO Eric Schmidt defends YouTube by taking a jab at one of Viacom’s revenue streams — the lawsuit. Schmidt points out that the company is built on a history of lawsuits, noting that the company’s CEO, Philippe Dauman, had previously been its general counsel for 20 years.
To be honest, I was expecting something more comical from a CEO who could easily steal punch lines from his own products. Comedy Central’s Daily Show (owned by Viacom through MTV) does a better job of mocking its parent’s lawsuit-happy ways.
There has been much wailing and gnashing of teeth over the much-publicized droop in the residential real estate market. Existing home sales are down. Unsold new homes sit empty. In 2006 builders of manufactured homes delivered their fewest shipments since the Kennedy administration. Subprime residential lenders are going down the tubes and taking the rest of the economy with them. The bubble has burst
With considerably less fanfare, commercial real estate remains a hot commodity. Earlier this year The Blackstone Group made what was briefly the largest private equity buyout ever when it plunked down almost $40 billion for Equity Office Properties Trust, which once owned the most real estate in the US behind the government and God. And Blackstone had to fend off Vornado Real Estate Trust to do so. Since the deal closed, the company has found no shortage of takers as it divvies up some of Equity Office’s former properties. On top of that, Blackstone announced a $26 billion deal to buy Hilton Hotels earlier this month.
Your house may still be on the market, but investors and speculators continue to trade office space, hotels, and even humble community centers (strip malls to you and me) like scrip.
We interrupt our continuing coverage of the tragic deaths in Harry Potter and the Deathly Hallows to pause for news on another, earlier consumer mania: sales of the iPhone. Apple reported its 3Q07 results this afternoon. The figures include only two days of sales for the new smart phone: June 29 and 30. Apple said it expects to sell 1 million iPhones by the end of the current quarter on Sept. 30.
Meanwhile, AT&T yesterday reported signing up 146,000 iPhone customers at the end of its June 30 quarter, which sent its stock and Apple’s equities tumbling. Earlier news reports put the opening-weekend sales of the iPhone at an estimated 500,000-700,000, which apparently indicates that: A) maybe AT&T and Apple didn’t actually sell that many iPhones during the opening weekend, or B) perhaps the news reports of widespread problems in activating iPhones through iTunes were spot-on.
Apple’s stock recovered nicely today, however, indicating that investors believe the activation-problems storyline rather than conceding the power of Steve Jobs’ heralded reality distortion field.
Apple reported selling 270,000 iPhones in two days at the end of the quarter, as well as shipping a record 1.76 million Macs during the quarter and selling 9.8 million iPods.
Ben Franklin maintained that death and taxes are life’s only certainties, but he’d have to revise that thesis to take not-for-profit hospitals into account. They’ve rather successfully avoided half of the axiom for years, escaping federal and state taxes in return for reinvestment in their communities, often in the form of free medical care for the poor.
The IRS (no doubt a fan of Franklin’s truism) has sounded a warning bell for the industry, issuing a report last week questioning whether communities are getting their money’s worth out of that deal. The report will likely buoy the efforts of Senator Chuck Grassley, an Iowa Republican, to strengthen oversight on not-for-profits and the amount of charity care they provide.
Grassley and the IRS are joined by state regulators and local governments, who have also increased scrutiny in recent years. Illinois regulators actually revoked the property tax exemptions of Provena Health and Carle Foundation Hospital, claiming that the hospitals didn’t provide enough charity care. (Provena regained its tax-exempt status on appeal just last Friday.)
But the questions remain: Why aren’t not-for-profit hospitals spending more on charity care? And how much is enough to justify their drain on tax coffers?
Maggie Mahar at the Health Care Blog provides excellent context on this issue, pointing to some industry realities that have led to the current state of affairs. Among other things, she points to the role location plays in determining demand for charity care and the competitive pressures that have led not-for-profits to invest in high-margin services like bariatric surgery. She also reminds us that charity care is not the only way hospitals reinvest in their communities.
Her conclusion? Not-for-profit hospitals should be held accountable to their charitable mission, but audits should take local circumstances into account. Sounds reasonable to me, though it remains to be seen how that balance can be struck. In the meantime, not-for-profits should start getting their shoeboxes full of receipts ready for the inevitable audits to come.