At the end of August 2012, the Irish Examiner reported that the Broadcasting Authority of Ireland (BAI) had written to Denis O’Brien’s Communicorp radio operation asking for an update on Denis O’Brien’s control of Independent News and Media (INM), the largest private media group in Ireland which publishes the (Irish) Independent, the Sunday Independent, the Evening Herald, Sunday World as well as provincial titles and in Northern Ireland, it publishes the Belfast Telegraph and Sunday Life. In July 2012, the BAI had previously concluded that Denis O’Brien “does not control IN&M. Rather he has a substantial interest in the Company, as that term is defined in the Policy. In this regard, the Authority was not obliged to review Mr. O’Brien’s interests in the context of an undue amount of communications media”, and the latest intervention by the BAI at the end of August 2012 was aimed at testing if this was still the case after the intervening appointment of Denis’s associate Leslie Buckley to the role of chairman at INM .
It seems that the 60 days expires about now, and the BAI ruminations will be closely studied, especially by those concerned or alarmed at Denis O’Brien’s growing control of Irish media, particularly in light of the adverse findings in the Moriarty Tribunal and a pattern of editorial interference by Denis or his associates, suggested by communication with Gavin O’Reilly and former chairman, James Osborne and attempted editorial interventions against Sam Smyth and to a much lesser extent, allegedly against Eamon Dunphy. The nation’s favourite curmudgeonly journalist Vincent Browne has also recently been on the receiving end of unpleasant correspondence from Denis. Sam Smyth has seen his contract terminated at Communicorp’s Talk Radio and it seems that Sam’s last article in the Independent was on 25th May 2012 – Vincent Browne claims that Sam has been ostracised. All of this comes after Sam Smyth’s writings about the Moriarty Tribunal, the adverse findings from which are disputed by Denis.
Today in Court 3 at the High Court today, Ms Justice Laffoy presided over a disjointed hearing where it was obvious both sides were engaged in intermittent discussions outside the courtroom aimed at a settlement. It was the third day in the case taken by IN&M’s director of corporate affairs and content management since 2010, Karl Brophy against what is now his former employer after IN&M tried to terminate his contract in April 2012, immediately after Gavin O’Reilly stood down as CEO amid frictions between Denis O’Brien and the O’Reilly family. Karl had been recruited in 2010 by IN&M – way back in 1998 when Karl was a political journalist, he had penned an article in the Irish Daily Mirror which resulted in a defamation action by Denis O’Brien where Denis received €750,000 compensation.
Today the current IN&M CEO, Vincent Crowley took to the witness stand and alas was only part-way through his evidence when a settlement was announced, so there was no cross-examination. In his 90 minutes of evidence, he painted a distressed picture of IN&M with falling circulation and advertising in its main market, the Republic of Ireland. Vincent was the former Chief Operating Officer (COO) of the company, and said today that he had two meetings with Denis O’Brien prior to his elevation to the main management role at the group on 19th April, 2012. He described his former role as “fluid” and it seems that his vacated role of COO is not being filled at the group.
The outlook at IN&M doesn’t look great. Vincent said that he originally planned to spend €40,000 on public relations in 2013, presumably most of it with Murray Consultants but he has since revised that up to €80-100,000 given the detailed discussions with the banks, continued cost cutting and dealing with pension issues. Evidence presented to the court included deliberations by Vincent Crowley on assuming the CEO role in April on several terminations; three were indicated to the court – his own COO role, Karl’s and the role of group treasurer – but there was also a redacted name which apparently is an exec who was spared. It also seems that the former CEO Gavin O’Reilly had considered making Vincent Crowley redundant. You’d have to wonder if anyone is safe at IN&M! Vincent described the position of the company when he assumed the CEO role as “perilous”. The stock price of INM is 10c today valuing the company at €52m, a shadow of its former billion euro plus valuation, and given the group is balance sheet insolvent to the tune of over €200m, you’d wonder if it is perhaps overvalued even at €50m.
As regards the Denis O’Brien angle in this present court case, it seems that a perceived attempt by Karl Brophy to unearth details of Denis O’Brien’s borrowings at Anglo and to bring those details into the public domain was a source of tension at INM, on account of Denis being a tax-exile who was being financially supported with loans by a bank 100%-owned by the taxpayer. Of course Denis’s spokesman has previously stressed that Denis pays tax in Ireland on income earned here, though we have not seen that tax quantified. There were also concerns at alleged leaks related to Sam Smyth and Eamon Dunphy, but it seems the main source of friction was Denis’s borrowings with Anglo, something which echoes claims made by former chairman James Osborne in a recent interview with the Sunday Independent’s editor Anne Harris. It’s not clear why this should be regarded as Krytonite by Denis, as it seems he has reduced his borrowings at Anglo and no-one has suggested his loans aren’t performing. INM argued in the case that Karl was terminated for cost savings reasons.
Karl was joined today in court by former CEO Gavin O’Reilly who sat beside him, and apparently the pair looked as if they had some fight left in them still. This evening, Karl has said on Twitter that he has no plans for the future “yet” and that he is no longer an employee of IN&M “as of today”. Gavin O’Reilly is understood to be busy with his hotel interests at present.
The settlement statement read to the court said that IN&M makes no allegation of wrongdoing against Karl Brophy and also that the decision to terminate Karl’s employment was the CEO’s, Vincent Crowley’s and that specifically, Denis O’Brien had “no hand” in the decision. Other details of the settlement are unlikely to make it into the press, but it seems that Karl’s contract provided for a 2-year severance which would amount to €600,000 in light of his reported €300,000-a-year salary.
NAMA Wine Lake 