Dev's Paper in crisis

Despite the recent agreement with the unions and the return to work, the Irish Press Group faces serious problems

In 1982 Dr Eamon de Valera took charge of the Irish Press Group of newspapers, following in the foottsteps of his father and grandfather. It was a tough time for Irish newsspapers and for the Press Group in particular.

VAT went up to 23%, newsprint became more expensive and the tradiitionally high labour content in newsspaper production was more costly. People started reading cheaper British tabloids or stopped buying papers altoogether. Money was scarce.

Advertising agencies became more choosey about where they placed their ads. They became much more specific about the types of people they wanted to sell their wares to and they were becoming increasingly attracted to television and radio as advertising media.

The papers had to start hustling.

Sales were down and revenue was tumbling. The three national newsspapers were suffering but the Press was suffering the most. Since 1981 the Press Group has lost approximately £5 million and Dr de Valera has preedicted substantial losses for this year as well. If it wasn't for the Reuters shareholding which gave the group a financial boost the Press as we know it mightn't have survived the past five years.

But then the Press as we know it is a rather confusing entity. Is it the republican paper advocating an "Irish Ireland" that was envisaged when it was set up or is it a modern business striving for maximum profit? If it's a mixture of both how do these two aims relate? What is the role of the de Valera family in the company?

Back in 1927 it was felt that anoother national paper was needed. Other Irish papers were hostile to the republican movement and there was. clearly a need for a daily paper to innform and support this constituency. The intention to set up such a new paper was announced at the Fianna Fail Ard Fheis that year. The estimated capital of £200,000 was to be raised half in Ireland and half in America.

In December de Valera headed off to America for a two-month funddraising tour. This was followed by a tour of Ireland and another tour of America. It seems that the second tour of America was necessary because of the delay in getting funds from that country. There was an economic depression and the minimum subscripption of 500 dollars was proving diffiicult to raise.

A decade earlier de Valera had raised five million dollars for the republican movement in America. About half of this money found its way back to Ireeland and the other half lay in Ameriican banks. After the treaty there was a long legal battle between the pro and anti treaty factions as to who actually owned this money. An Ameriican judge eventually decided that the money didn't belong to either of them and that it was to be returned to the original subscribers. De Valera suggessted that some of these might simply transfer their su bscriptions to his fund to set up a republican paper.

It is not clear how many took up this offer but there were enough and the Irish Press Corporation was set up in America to handle this money and invest it in the Irish Press Limited in Dublin. De Valera was trustee and reppresentative of this corporation on the Irish Press Board and between this and his own shareholding he held a conntrolling interest in the Irish Press Limited. De Valera was of course leader of the Fianna Fail party at the time and very few people would have distinguished between his role as leader and as Editor in Chief. Most saw his controlling interest in the newspaper company as a safeguard, something that would ensure its fidelity to the cause.

Both his roles were seen as being important to the republican cause and indeed de Valera said that if he had to choose between leading the party and running the paper he would choose the latter.

It is important that although the Press Group had strong links with the Fianna Fail party - Sean Lemass, Erskine Childers and Cearbhall 0 Dalaigh all worked there for instance - the control of the company reemained with the de Valera family. Dr Noel Browne has been very critical of this: "The Irish Press was funded by one pound notes collected from rank and file republican supporters of the party. It was the intention that it should become a national newspaper and certainly not the political playything and enormous financial asset of the de Valera family which it later became."

Although as early as its first ediitorial the Irish Press announced:

"We are not the organ of an indiviidual, or a group, or a party," the supporters of the paper and partiicularly its shareholders have felt otherwise. Slavish support to party policy is not expected but neither are hasty political obituaries such as the one on Charles J. Haughey the day before he was expected to lose the party leadership - he didn't.

When Dr Eamon de Valera succeeeded his father as Controlling Director, Managing Director and Editor in Chief of the Press Group the company faced severe problems. Losses for 1981 were £881,000 and things looked set to get worse. His grandfather was noted for his business acumen as well as his political ability. Dr de Valera was going to get a chance to prove his similarity in the former if not the latter characteristic.

The Irish Press faced two main problems: the production costs of the paper were too high and the revenue coming in wasn't adequate. There wasn't much that could be done about newsprint and other material costs but things could be reorganised internally in such a way as to make maximum use of the resources that were availlable. In the newspaper industry reveenue comes from two major sources, cover prices and advertising. You don't necessarily have to sell a lot to be successful in advertising terms but it is important that you sell to the right people.

In early 1983 a corporate plan was produced and the company emmbarked on a programme designed to bring down production costs. This involved rationalisation and the introoduction of new technology. Rationaliisation was to take place mainly in areas like the paper's dispatch section and in the clerical department. It would lead to significant redundanncies. The introduction of new techhnology was intended to speed up production and to make it less costly, it is also believed that new technology gives you greater flexibility in designning your paper. It also leads to a loss of printers' jobs.

Donal Flinn, a former managing partner with the accountancy firm Coopers and Lybrand, the Press' auditors joined the company as Chairman of the Board of Directors in 1983. Sean Mac Hale, another exxperienced businessman, joined as well. Outside viewers looked on this move as an indication that Dr de Valera intended to deal firmly with the probblems which faced the company.

Flinn, who was believed to have drafted the corporate plan, was also associated with such big business names as Fitzwilton, the Smurfit Group and Barclay's Bank. Mac Hale was Chairman of NET and was a business consultant. Both were connsidered to have the pragmatic hard nosed business and managerial skills needed to get the Press Group making money again.

Flinn met the staff in November 1983 in Liberty Hall. He argued that the best way to safeguard jobs was to make sure the company survived and that the best way to ensure that was to cooperate with the implementation of the corporate plan.

Things didn't proceed as he had planned. The following February the company threatened to close down the papers if agreements on various eleements of the plan weren't reached by May of that year. Workers were told that the company was "balanced on the edge of a precipice."

Before the May decline the closeedown was averted, with the staff agreeing to cooperate with the rationaalisation plan which included the sheddding of some 230 jobs, about a quarter of the work force. It was reported that eighty-five of these redundancies were directly attributable to the introoduction of new technology.

A deadline of April 29 1985 was set for the changeover to new techhnology. Staff were trained on a rota basis for some months before this.

As the deadline approached it beecame apparent that it wasn't going to be met. Colm Traynor, the General Manager of the Press Group, met with staff in Liberty Hall on April 16. The deadline was extended and a hectic round of meetings ensued between the Press management and the unions involved. The company claim that they SUbsequently reached effective agreements with all the unions except the Irish Print Union.

The Irish Print Union is probably the single union with the most to lose from new technology since the logical development of this technology is to do away with most of its members' jobs.

Whenever new technology is introoduced into a print works, the IPU demand a special photo composition rate which amounts to a 15% increase in wages. They demanded this from the Press. There were also problems about demarcation. Other unions claimed to have the right to carry out certain functions under the new sysstem but the IPU claimed these funcctions for itself. Negotiations went on and the deadline was extended. The company then formed the opinion that agreement was unlikely and deciided to close down operations. This they did on May 19.

The Labour Court became innvolved, as did the Irish Congress of Trade Unions, and the effective lockkout continued.

Donal Flinn had meanwhile resigned from the board to be followed shortly afterwards by Sean Mac Hale. In the company's annual report this year it is reported vaguely that Flinn resigned in April "following differences with the Controlling Director on company policy." The report goes on to say that Mac Hale left "following a disagreeement over a separate matter concerning the Boards business strategy in relation to the company's problems." Elio Malocco was co-opted onto the board at the same. time they left. Malocco is married to Jane de Valera, a sister of SHe de Valera. To some it looked like a case of throwing out the new to bring back the old. One shareeholder asked at the company's annual general meeting: "After the board's brief flirtation with the private sector has the board now decided to return to nepotism?"

It is believed that Flinn favoured a rights issue - the sale of new shares in the company - as a means of raising funds. This would have lessened the need to go to outside sources for commpany funding but it would also have had the effect of diluting the de Valera shareholding and it is thought that this wasn't acceptable since it might ultiimately prise the group from de Valera control. A boardroom battle is alleged to have occurred over the adoption of this scheme.

Flinn lost. The appointment of Malocco is seen as a consolidation of family interests in the company after it overcame the threat posed by the Flinn strategy.

It is also said that Flinn favoured a tougher approach on new technology. It is believed that he felt the Press should insist on the introduction of what's known as "direct input" immmediately. This would have involved journalists keying their stories directly into computer terminals. People taking in classified ads would do the same. This system is quite common in counntries like the United States and Ausstralia and it means that a paper can function with virtually no printing staff.

If the company were to pursue such a policy and succeed there would obviously be a marked saving in labour costs. Some felt that since they had closed down the papers in May anyyway the Press might as well go for broke and demand "direct input". Others in the company did not feel that this was a realistic option, pointting to the massive industrial disrupption that would follow such a move.

The Press Group had in fact agreed not to discuss "direct input" until feur years after the introduction of new technology. This agreement was made as long ago as 1982 and it was a pre-condition to the union's even entering into negotiations on the introduction of new technology.

The IPU was very conscious of other newspaper managements' interest in what happened in the Press. If direct input was allowed there it would effectively mean the end of their jobs in other papers as well. In fact the Press have an agreement with the union that if direct input is introoduced into another paper in Dublin they can go ahead and introduce it into their own production system.

For their part the union say that if that strategy had been pursued by the company they would have done everyything possible to stop them printing. Management in the Press claim that pushing for direct input at that time would only have been successful if the other unions in the company deciided to cooperate with its introduction ignoring the IPU objections.

Even if the other unions agreed to do this there would still have been massive problems. There would probbably have been an all out ICTU picket on the Press' buildings and movement of goods in and out would be very difficult. Newsprint might have been blacked at the docks and telephone and telex lines could be cut, in short, production of a newspaper would be practically impossible. As it was, "direct input" wasn't an issue in the company's discussions with the IPU during the shut down.

While these discussions were still going on the company sent a letter to its employees in which they said that unless agreement was reached by a certain date the company would "cease trading in its present form". Agreement was reached before the specified date.

From the company's point of view the agreement was very favourable. The 15% wage rise is to be discussed again when the company is making profits. Claims for a 32-hour working week and for six weeks' annual holiidays have similarly been deferred. 110 members of the IPU are expected to be employed when all three Press papers come back into production. Before the shut down there were about 150 members employed. If any of these printers want to opt for voluntary redundancy they can do so at the rate of £700 for every year of service, a rate which is quite favourrable to the company.

If enough printers do not accept the redundancy deal to bring their num ber down to 110 then the commpany will still only employ that nummber, using a rota system to share the work out amongst the pool of printers available. Bernard Rorke of the IPU says that it's not a good settlement for his union but that's the case beecause of the state of the company:

"You 're conscious that you're dealing with a company that's making trernendous losses."

The demarcation disputes were settled through the ICTU. In the case of the IPU's dispute with the NUJ about the marking up of copy it was eventually agreed that journalists would continue marking it up as before and that the printers would put the commputer codes on afterwards.

The effective achievement of forty redundancies is obviously going to save the company money but the implicaations of the new technology for prinnters' work practises is also significant. Using these new production systems it's believed that there should be virrtually no need for overtime in the future. This should represent a signifiicant saving in production costs. Using the old production methods and work practises it was said that a printer could make around £900 a week, from working overtime.

It still remains to be seen if the company can use the new technology effectively. There have been consii. derable production delays since the Evening Press and Sunday Press came back on the streets. For instance the first issue of the Evening Press to be published after the shut down came out three hours late.

The basic problem in this area is an unfamiliarity with the keyboards innvolved and some claim this is commpounded by inadequate training. The keyboards used in the old system are quite different from those employed in the new one, and those operating the new machines have not only to learn how to do it the new way but they've also to unlearn the old way. This is a common problem wherever new technology is introduced. When new technology was introduced into the Irish Times they experienced simiilar delays.

The Press managernen t say that as time goes on things are getting better, production is speeding up and the papers' appearances are improving. Both the company and its employees are getting used to the new machines. Management say they expect to reduce the numbers employed in the printing en'd of the operation to about eightyynine when things are running as effiiciently as they should be. The IPU say that the company will probably find that they'll need more than the initial 110 to produce their papers, indeed the company has had to bring printers in at night for advance setting, something they hadn't planned to do. The IPU say they haven't heard about plans to reduce the numbers to eightyynine. This could be a cause of conflict in the future.

It remains to be seen whether or not the new technology and allied reedundancies will make much of a differenee to the Press Group's producction costs. They've got the new techhnology at comparatively little cost, they've effectively got about forty redundancies and they've brought back two of their three titles. The Irish Press is due back on August 12 and it won't be until about three months after this that the strategy can be pronounced a success or failure. As one commentator put it: "The jury's out on this one."

Lack of revenue from sales of newsspapers and ads is the other major problem. Selling newspapers, like sellling anything is a sophisticated business, and it's a business that the Press Group have ignored for too long. Some people working in the Press feel that the commpany's management have spent too much time concentrating on the prooduction side of the paper and the problems associated with that at the expense of the business of selling newspapers. Outside observers say that compared with the other newspapers the Press have been extremely lazy and perhaps arrogant in their approach. Some felt that there was an attitude that the papers would just sell on their own.

Colm Traynor, the Press Group's general manager points out that probblems with the old production system actually caused direct losses of circuulation, the papers simply weren't getting out on time. The Evening Press for example was consistently late with its country edition and often missed valuable lunchtime sales in Dublin. Traynor says that it makes sense to sort out your production both in terms of efficiency and cost before you tackle the marketing of your papers. This presumably means that they will now consider the business of what they're selling and to whom they are selling it.

A newspaper is no longer assured of sales simply by appearing on the news stands. Radio and television are undermining the traditional role of the newspaper in providing up to date news, programmes like 'Morning Ireeland' for instance are difficult to commpete with on that basis. What has to be sold now is a daily package conntaining news stories. Other features are built into this package to enhance its marketa bility. Long running series which can be advertised easily, business pages, news analysis pages, profiles and columnists are just some of the commponents that are used to successfully market a newspaper.

Before a company embarks on this exercise it should be clear about who it is trying to sell its paper to and why. For instance the Irish Times sells to a particularly affluent section of Irish society, this enhances the paper's appeal to people who want to adverrtise relatively expensive products, such as cigars, brandy or computers. The Times holds onto this readership by including comprehensive arts and business coverage in its package.

This kind of packaging is partiicularly important not just in commpeting with radio and television to sell newspapers but it's also very immportant if a paper is going to compete with them for advertising. Television particularly has been eating into newsspaper advertising revenue for the past few years.

From an advertising point of view television is a particularly attractive medium. Viewers tend to absorb more when they are presented with sight and sound. Television is much more intimate than newspapers and it is easier for an advertiser using it to ennhance his product with certain emootional benefits. The cost is often connsidered reasonable, particularly in the case of an Irish subsidiary of a foreign company.

In that case what often happens is that the Irish company will use an ad made by its foreign parent company. This generally just involves the expense of getting a member of Irish Equity to re-dub the voice over. Bringing in foreign ads is becoming so common that it is usual now for a creative director in, for example Britain, to ensure that the ad being filmed can be used in both Ireland and Britain, even to the extent of getting someone who is a member of both Irish and English Equity to do the voice over, thus avoiding the expense of re-dubbing,

Television also provides a massive audience to an advertiser, for example it is believed that there are about half a million television sets tuned into the 'Late Late Show' on any Saturday night. It has been estimated that teleevision has increased its share of adverrtising expenditure by about 6% since 1980 and that national newspapers have dropped their share by about 9%.

Sean McGlynn joined the Press about a year ago specifically to look after the marketing end of the company's business. He has spent most of his time on the Evening Press and has had quite a success with its "Sells more. Tells more" campaign. But the evening paper is the one with the least amount of pro blems.

Although it has dropped about a quarter of its circulation since 1980' it still outsells the Herald and has a slightly more affluent readership. The Sunday Press has also dropped its cirrculation by about a quarter since 1980 and it has been passed out by the Sunday World as the biggest selling newspaper in the country. It 'is still a reasonably healthy paper with certain attractions for advertisers. If its drop in circulation continues however it will be eclipsed by the Sunday Independent which also has a mass market appeal but which has a more affluent urban readership.

The Irish Press itself is the paper with the most probblems. Its circulation has not fallen as much as its two sister papers over the past five years but with a circulation of 89,000 that's nothing to feel smug about. The Irish Times may have a circulaation a few thousand below this but the proportion of desirable consumers amongst its readers is far higher. The Irish Independent with sales of 155,000 is obviously more attractive to someone who is trying to sell something to a wider market, like certain brands of cigarettes, cars and beers. There is also the feelling amongst ad agency people that the readership of the Irish Press is both elderly and rural and the best consumers are young and urban.

Colm Traynor decries what he calls the "myths" about the Irish Press. He says, "It's not the dead paper a lot of people would have you believe." He says that the paper's share of young urrban affluent readers is going up and the signs are "proomising". However, when you look at last year's newspaper readership survey, you see Ithat the Irish Press has the highest proportion of rural readers and the lowest prooportion of prosperous readers.

It has a higher proportion of young readers than the Irish Independent but because of the comparative sizes of their readerships the Independent still has more young readers (311,000 as opposed to 190,000).

Advertising agencies say there's often no good reason for advertising with the Irish Press. They say that you can get at that audience more effecctively through other routes, such as the Sunday Press, the Farmers Journal or RTE Radio One. They also commplain of a lack of aggressiveness on the part of Press advertising sales people. One person said that the Press sales person would generally try the "any chance of that ad" approach rather than come in and point out why they should get the ad, why it's in the ad agency's interests to give it to them. In the Press, advertising reps feel frusstrated about the difficulty of selling ads - one claimed that a certain car manufacturer would not take a free ad in the Irish Press.

Journalists in the Press complain about a lack of direction and many openly admit they don't know who they are writing their material for. Those who try to get the whole question discussed become frustrated and wonder if management will show the same resolution when dealing with this problem as they seem to have shown with production costs. One person inside the Press said that the morning paper needs to be totally reepackaged, that a "crisis strategy" was needed. Another complained that in this area there was no management, "it's like a bike freewheeling downnhill."

With the Irish Times at the top end of the market and the Irish Indepenndent in the upper-middle range there is clearly a gap for the Irish Press as a middle range popular newspaper. Acccording to Colm Traynor the paper should attract more young urban readers. He also says they need to get more women readers. The option of turning the Press into a tabloid hasn't been ruled out but will be considered when they decide exactly what they are going to do with the paper.

The important thing is that they do decide what they are going to do with the Irish Press and that they make that decision soon. The group's other two titles could bear scrutiny as well, particularly in light of their tumbling circulations.

In 1929 Eamon de Valera commplained about the rising circulation of British papers in Ireland: "The result is that the circulation in Ireland of British newspapers such as the Daily Mail, the Daily Express, and Daily Chronicle has been rapidly increasing. The whole thought and philosophy behind these newspapers is entirely alien. Everyone who is interested in preserving our national individuality is alarmed at the prospect of a further increase in their circulation, and it is realised that the only effective remedy is to provide an alternative ~ produce an Irish paper which the Irish people will spontaaneously support because it stands for Ireland and Irish interests, and is reppresentative of their own thoughts and ideals. "

It is estimated that the Daily Mirror alone sells about eighty thousand copies in this country, almost as many as the Irish Press. The problem is that readers will not "spontaneously suppport" a paper any more. Those days are gone. Nowadays you've got to sell it to them. •