They say a week is a long time in politics; well certainly, two months can be an eternity in media. Just over two months ago, there was a blogpost on here examining the finances of media companies operating in the State and suggesting that they would need an imminent bailout.
Since then, the Thomas Crosbie group has passed through a pre-pack receivership and the future of the Sunday Business Post, now in examinership, remains uncertain as it seeks new investors. The logical tie-up between the SBP and the Irish Times – which doesn’t have a Sunday edition – looked inevitable but this weekend, Tom Lyons is reporting that the Irish Times investment bid might be doomed with its partner, Landmark Enterprises going cool on the enterprise. Minister for Finance Michael Noonan refused to tell us how much had been written off in the receivership/examinership but it was reported that AIB was owed €28m and the betting on here is the debt forgiveness is in excess of €10m.
On Friday last, we had a muddied statement from Independent News and Media which indicated debt forgiveness of €138m from banks including AIB and Bank of Ireland. Funny, not a word about the debt write-off or the atrocious results for 2012, in today’s Sunday Independent. Anne Harris the Sunday Independent editor looks like a rank hypocrite after the criticism the Sindo meted out to rivals which had last year suffered poor results.
We finally found out during the week why RTE has been soft-soaping us with its tendentious interpretation of the “independent” report from PwC: RTE is set to unveil a deficit of “in excess of €60m” for 2012 and worryingly there was no word on the pension which incurred a loss by itself of €50m in 2011. Unlike private sector media groups that took bets on new enterprises during the boom and funded the bets with other people’s money, RTE didn’t, and its losses are down to a pathetic and incompetent management that has been unable to cut its coat according to its cloth – it pays obscene salaries at one end of the spectrum, and in general looks like a financial basketcase waiting to implode. It is now whinging that Sky is taking €380m of revenue in the Irish market leaving just €420m per annum for RTE, TV3, TG4. It’s called “competition” duckies, and you’ll just need to suck it up.
Meanwhile over at TV3, intensive discussions are presumed to be taking place right now with the Special Liquidator of IBRC to refinance €125m of loans, in a business which is widely believed to be worth only €15m. There has been speculation that a buyer is weighing up a bid for TV3 and that potential buyer is..
UTV has shown that it is the healthiest media group operating on the island of Ireland, or at least the healthiest media group that provides separate accounting for the island. We have preliminary results for 2012 – see above – which indicate the company is healthy enough to actually pay a dividend. Dividend? Yes, we have gotten so used to deficits, losses, bailouts and debt forgiveness, we forget that private companies exist to make a profit for their shareholders.
News International which publishes the Sunday Times and the Sun may be profitable but we don’t have separate accounting. Sky, according to RTE, has Irish revenue of €382m per annum which is presumably profitable. The Irish Daily Mail reported revenues of €19m in 2012 and profit of just over €1m last week.
It is surprising on here that the Irish Times is not suffering more but its main folly during the boom, the purchase of MyHome.ie has largely been written down to a negligible value in the Irish Times accounts. Mind you, the group still thinks its premises are worth €32m and there is a nasty pension liability of €44m and in 2011, the last year for which annual accounts are available, the group made a full recognized loss of €23m, though €21m of that was related its pension obligations. Last October, 2012 Tourism Ireland which comes under the auspices of Minister Varadkar on this side of the Border and Minister Arlene Foster in Northern Ireland paid a stonking €495,000 to the Irish Times for the Ireland.com domain name. Because the Irish Times isn’t burdened with unwisely-acquired enterprises and borrowings, it has been able to adjust to the challenging reality quicker than its rivals on Talbot Street, but if IN&M successfully completes its restructuring, then IN&M’s core business will be financially healthier than the Irish Times’s.
Johnston Press, a British newspaper publisher, which publishes a number of regional newspapers including the Limerick Leader is just as indebted as IN&M and last year turned in a loss before tax of GBP 6.8m (€8m).
Denis O’Brien’s Communicorp continues to teeter on the wrong side of profitability but it is disposing of overseas radio stations and is close to break-even on its operations where shoe-string budgets and obsessional cost control have borne results, though it still is stumbling along under massive debt.
What do the next two months hold for the Irish media landscape? Who knows but here is what the crystal ball on here is suggesting – the print media think their offerings are good enough to allow a limited paywall but the luvvies may be in for a dose of reality when push comes to shove. The Herald, which has become a morning newspaper this year, looks doomed and will either merge with the Independent or the Irish Daily Star. The Independent looks set for a merger with the Sunday Independent. And will the Belfast Telegraph move closer to the Independent? It seems unimaginable that the Sunday Business Post won’t end up with the Irish Times despite the apparent cooling of Landmark’s pursuit of a bid to rescue the title out of examinership. RTE will post a gigantic loss and communications minister Pat Rabbitte will try to put the legislative machinery in place for a broadcast charge, which when collected with the household charge should make an additional €30m available which RTE will need to curtail its deficit. UTV may take control of TV3 which will be no bad thing for viewers. It’s hard to see the regional newspapers surviving in their present numbers. But, this is all in the realm of the crystal ball.