Sunday Tribune: A question of disclosure

2 July 2008
Vincent Browne

The Sunday Tribune publishing company, Tribune Newspapers plc, has lost a total of €49.5 million to date, according to the chairman of the company, Gordon Colleary. Almost all of these loses have occurred since Independent News and Media (IN&M), controlled by Tony O'Reilly, has been in control of the company (ie since 1991).

The company has never registered a profit during the time that IN&M have been in control and never registered a profit during any of the time that any of the current directors, bar one, have been on the board. The exception is the chairman, Gordon Colleary, who was also chairman when the company last made a profit in 1989. And yet the same board of directors continues to be re-elected year after year.

Asked (by me) at the company's AGM on 26 June, why the directors, who had failed so spectacularly, were re-elected year after year, Gordon Colleary said: “Because they present themselves before the shareholders and they've got the support of the shareholders.” Asked why he, as a shareholder, continued to support such directors, he said: “Because I have confidence in those guys.”

Asked how, possibly, he could have confidence in people who had overseen consistent losses for 18 years he said: “The position is that, this meeting is to deal with the results from the past year and as you can see in the past year and previous year, we have brought down our costs very substantially and it was the cost element that probably was our biggest difficulty and I think that what we have recorded in the accounts for this year, a cost level, which has now been reduced over three years at times when inflation is very high and I think that in itself is a very commendable effort and a success.”

He said: “I am very pleased to have on the top table, directors of a publishing company (IN&M), which is very profitable.”

When asked whether the company was in breach of a ministerial order of 1992, which prohibited Independent Newspapers from increasing its shareholding beyond 29.9 per cent in order to prevent the company gaining control of the Sunday Tribune, given that now the Independent Newspapers has total control of the Sunday Tribune – they appoint the Managing Director, they appoint the Editor – he said: “Every Managing Director has been appointed by the Board [of Tribune Newspapers plc], and I have chaired those meetings.”

Asked was it not extraordinary that every Managing Director has come from Independent Newspapers and that the editors have come from Independent Newspapers since 1995, he replied: “It may indicate that there are a lot of skills there that we have managed to persuade [to join the Tribune].” Asked what evidence there was of such of skills given the scale of the losses, he said: “I think that we have, each Sunday, 62,000 people or 67,000 people buy the newspaper.”

This was the first time it had been revealed that the circulation had dropped to such a low level. In 1989, the circulation had been over 100,000. Asked how the circulation had dropped so spectacularly, especially given the huge amounts of monies made available to the company, he said this arose from a very crowded Sunday newspaper market now, one that was far more competitive than it was in 1989. When challenged on this on the basis that in 1989 the Sunday Press, then selling in excess of 200,000, was on the market, he said The Sunday Times wasn't around then.

The question remains, what possible reason could IN&M have for continuing to support the Tribune, now to the tune of at least €45m, if it is not for an anti-competitive motive: to block the rise of The Sunday Times and The Sunday Business Post?

As it happens, the Sunday Tribune newspaper has improved significantly in quality since Noreen Hegarty became editor and she has assembled a formidable editorial team with the likes of Justine McCarthy, Michael Clifford and Shane Coleman. But the damage done to the newspaper in the years before then, by incompetent management, all recruited from IN&M, effectively has killed off the newspaper as a commercially viable proposition. Of the board of six members, IN&M now has three direct placements (Liam Healy, Andrew Donagher and the chief executive, Michael Roche). Another of the directors, Brendan Hynes, was instrumental in IN&M grabbing shares in the Tribune in 1991. So, even assuming that the other two directors, Gordon Colleary and Martin Birrane are ‘independent', IN&M has control of the board, in defiance of the 1992 ministerial directive.

In 2007 the Tribune made a loss of €2,845,000. Of this €806,000 was attributable to trading loses and redundancy costs, which were just €70,000. The chief executive, Michael Roche, recruited from IN&M, received a salary of €340,000. The average salary among all 56 staff was €59,125.

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The “ethics” legislation introduced with much self-congratulation in 1996 and 1997 by the Labour Party, while in government with Fine Gael and Democratic Left (remember them?) has proved fairly ineffectual.

In a recent statement, the Standards in Public Office Commission stated: “If one of the [Electoral Acts of 1997] was to achieve transparency in how political parties are funded and in particular how political parties and their candidates fund election campaigns, then this part of the legislation is not achieving that purpose.”

It stated that for the 1997 general election, Fianna Fáil spent €3.5m on the election campaign (that is during the period 29 April to 24 May 2007) but disclosed donations of only €661,523, just 18.1 per cent. And if you think that was bad, just look at the others.

Fine Gael spent €2.8m on the campaign during the period in question but disclosed only €191,095, just 6.8 per cent. The Labour Party was also pretty awful (no doubt it will claim this was because it got so many donations below the disclosure threshold). It spent €1.5 m on the campaign during the period but disclosed only €152,084. The Progressive Democrats (predictably) were the worst of all. It spent just over €1m but disclosed just a miserable €15,879, 1.6 per cent (perhaps not surprising since Michael McDowell advised supporters they could avoid disclosure by making donations just under the limit and having their spouses and children do the very same). The Green Party spent €554,000 and disclosed €78,068, 14.1 per cent. Sinn Féin was the best. It spent €685,000 (by far the lowest and, in fairness, that seemed to reflect their level of advertising and promotion generally) and it disclosed €230,000, 33.5 per cent.

The reality of course is much worse than these figures convey for the parties, notably Fianna Fáil, Fine Gael and the Progressive Democrats, spent very considerable sums before 29 April 2007 and when that is taken into account, the discrepancy between the amount spent and the amount disclosed is very much greater.

As the Standards in Public Office commission points out, the discrepancies are not explained by the fact that political parties receive public funds as this funding may not be used for electoral purposes.

The Commission observes: “It is obvious that political parties are soliciting donations which are below the disclosure threshold. The Standards Commission does not consider that there is anything wrong with this. However, if the purpose of the Act is to demonstrate transparency in how political parties are funded and in particular how political parties and their candidates fund election campaigns, then this part of the legislation is not achieving that purpose. In that regard, therefore, the Standards Commission reiterates its recommendation that a new approach to the general funding of political parties is required which, in keeping with Recommendation (Rec (2003)4) of the Committee of Ministers of the Council of Europe, would require political parties to furnish accounts to an independent authority. Such accounts would specify all donations received by the party and disclose details of donations over a certain value.”

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