The return of Paddy Cosgrave as chief executive of Web Summit is a “high-risk strategy”, according to serial entrepreneur Bobby Healy, whose drone business, Manna, is backed by a fund established by Cosgrave and the other Web Summit shareholders.
Earlier this week, six months after Cosgrave stood down as chief executive because tech companies were withdrawing from the November Web Summit in response to his comments about Israel, the controversial Irish businessman announced he was returning to the helm of the business where he has an 81 per cent shareholding.
“I think Web Summit is an amazing thing, and largely down to Paddy,” says Healy. “I think the business needs a leader and Paddy knows how to lead it. Paddy can definitely do the job.” But if the companies and venture capitalists that Cosgrave offended last year don’t return to the Web Summit conferences, then the decision to come back as chief executive will be a mistake, Healy says. Hence his description of the move as “high-risk”.
Cosgrave’s expression of political views that are the polar opposite of those held by his key US customers and corporate sponsors “is a pretty dumb strategy”, says Healy, who laughed when he was asked if he was surprised at Cosgrave’s return. The future of the high-profile venture “is all in Paddy’s hands”. Healy says if Cosgrave adopts a “business as usual” approach then “I think he will run into problems”. He says he hopes that does not happen.
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Cosgrave announced his return on Monday on his X account, where he has more than 97,000 followers. His announcement came a little over a week after he posted a photograph on the same account of IRA bomb-making expert Rose Dugdale, who had just died, with the words: “Rose Dugdale was a legend. The real deal. RIP.” A few days later he posted a photograph of a young woman with previous links to Web Summit accompanied by the words: “Petty crook alert. More to come.” Nothing has been heard since about why this was published.
An interim judgment is pending on an application from the minority shareholders for discovery about Cosgrave’s online comments last year about Israel which, they allege, caused significant financial damage to the business they partly own
In the wake of Leo Varadkar’s announcement that he would be resigning as taoiseach, Cosgrave tweeted that he would be holding a press conference to “reveal why Leo Varadkar resigned”, but never did. He has also repeatedly announced he will be holding a press conference to disclose material about two minority shareholders in Web Summit with whom he is involved in a High Court dispute, but that press conference has also yet to happen. And, more recently, Cosgrave appeared to blame his difficulties on a “co-ordinated campaign” to smear him, referring to reports about supporters of Israel, who are strongly represented in the tech and venture capital community, helping the Israeli government in the social media “information war” about the Gaza conflict, with his resignation last year being cited as a win in that context.
[ Paddy Cosgrave denies his position as Web Summit CEO was ‘untenable’Opens in new window ]
In the High Court dispute with minority shareholders Daire Hickey and David Kelly, Cosgrave’s personality, his political stances, his funding of the Ditch website, and alleged attempts by him to inflict “serious political damage” on Varadkar, are among the issues being aired. An interim judgment is pending on an application from the minority shareholders for discovery about Cosgrave’s online comments last year about Israel which, they allege, caused significant financial damage to the business they partly own. The application includes the discovery of documents about the funding of the Ditch. A core matter in the case is the value of Web Summit, with values of up to €350 million being cited.
The Ditch, which has received financial support from Web Summit, posted a picture of the Palestinian flag on the day of the October 7th Hamas attack in which more than a thousand people were murdered and more than 200 kidnapped. Cosgrave, on the same day, posted a screenshot of the numbers killed in the Israeli-Palestinian conflict in the 2008-2023 period, a post that has since been deleted, according to Hickey and Kelly.
“I don’t think that the people who withdrew [from Web Summit] have forgotten what happened, that the Ditch posted the Palestinian flag on October 7th,” says Bobby Healy. “I think the sponsors will want an explanation about that. They have brands to protect, and they don’t want to be associated with a toxic brand, so it is for Paddy to make sure that the brand is not toxic.”
No one in the international scene cared when Cosgrave was taking “pot shots” at Varadkar, Healy says. But when he started to make comments about the Palestinian issue, one of those who paid attention was a US-based Israeli venture capitalist called Gil Dibner, who is well known in Silicon Valley. “Gil was the nuclear bomb that went off. He was ground zero for all Paddy’s trouble, because Gil picked it up and tweeted it and alerted everyone in Silicon Valley to what Paddy was saying.”
Others took up the issue then, Healy says, but it was Dibner “who was really angered by it. Bear in mind this was October 7th, so emotions were very high. Gil has family in Israel. The knives were very much sharpened for Paddy when that happened. I think it is people like [Dibner] that will have to forgive [Cosgrave], and Paddy will have to somehow repair those wounds.”
[ Web summit profits slump more than 90% but revenue risesOpens in new window ]
Whether Cosgrave has the personality for such a challenge is the key question. “He is a fascinating figure,” says someone who knows him but spoke on the basis of anonymity. “I think he relishes the notoriety. He is obsessed, consumed and possibly rattled by social media. He is also a very entitled kind of a guy. He puts out this story about his father being a farmer, but he went to Glenstal [a private boarding school in Co Limerick] and was the president of the Phil [the Philosophical Society at Trinity College Dublin]. I have always found him to be a pretty privileged sort of person.”
In fact, Cosgrave has described himself as a “crony”, referencing his own privilege, and posting on X at the end of 2022: “...I am of crony royalty, AND most importantly I’m wealthy to the point I don’t need to backslap. I can just call it as it is, while having a boat load of fun doing it...”
Cosgrave’s relationship with Denis O’Brien soured after O’Brien’s Digicel stopped sponsoring Web Summit, says Daire Hickey. Since then Cosgrave has conducted ‘a campaign of abuse against Mr O’Brien through his Twitter account’
Among the issues complained of by Hickey in his affidavit to the High Court, is that Cosgrave has maintained “numerous petty vendettas against business or political figures by whom he feels slighted or underappreciated, which he seeks to disguise as principled political stances”.
“Mr Cosgrave had a close relationship with [businessman Denis] O’Brien and saw him as a mentor and he would regularly recount advice that Mr O’Brien would have given him in terms of how to manage negotiations and deal with the press. He flew on a number of occasions on Mr O’Brien’s private jet to places such as Davos in Switzerland and the United States.”
Cosgrave’s relationship with O’Brien soured after O’Brien’s Digicel stopped sponsoring Web Summit, says Hickey. Since then Cosgrave has conducted “a campaign of abuse against Mr O’Brien through his Twitter account”, where Cosgrave’s connection to Web Summit is prominently displayed. The “gratuitous and abusive tone of those tweets serves to undermine the reputation of Web Summit,” Hickey says, and he is concerned this might dissuade other businesses from sponsoring the Web Summit “for fear of what might happen if the sponsorship ends”.
In his replying affidavit, Cosgrave said the suggestion that he is “motivated by vendettas, for example against people such as Leo Varadkar, I reject this entirely”. Rather, he said, he was passionate about contributing to making Ireland a better place. It would be “easy to live comfortably” but he would “end up living a life of regrets”. He said the comments in Hickey’s affidavit about O’Brien appeared designed to attract news headlines and had no bearing on the proceedings.
There is material in the minority shareholders’ affidavits about the origins of the Ditch website and links with the controversy over a confidential document leaked by Varadkar to his friend Dr Maitiú Ó Tuathail. (In November 2020 it emerged Varadkar had leaked the then National Association of General Practitioners president a copy of a confidential pay deal with a rival group, the Irish Medical Organisation, before it was published or finally signed off. Varadkar later said what he did was “not best practice”, but that it was done in order to secure the agreement of all GPs for the deal, and that he and Dr Ó Tuathail were friends “but not close friends”.)
According to Kelly, in August 2020 – at a time when Cosgrave tweeted an apology to Ó Tuathail about comments Cosgrave had made about Ó Tuathail, health policy, and Covid – Cosgrave had been in contact with Chay Bowes, a former associate of Ó Tuathail, who in turn had copies of text exchanges between Ó Tuathail and Varadkar. Cosgrave, says Kelly, recorded a two-hour phone conversation he had with Bowes in May 2020, and shared the recording with Kelly. About half an hour into the conversation with Bowes, according to Kelly, Cosgrave said: “…so I end up having a business that, you know, 99.9 per cent of the revenue comes from everywhere else in the world, I can pretty much say whatever the f*** I want, and there’s so little consequence... People outside Ireland don’t care about that stuff. It’s just totally irrelevant. And so I have that freedom, that a lot of other people just don’t have that freedom.”
[ Web Summit's chief marketing officer set to leave the groupOpens in new window ]
Bowes subsequently acted as a director of the Ditch (he has since resigned and is now a controversial figure because of his online support for Russia despite the invasion of Ukraine), while two former employees of the Web Summit went on to become reporters for the Ditch. In November last, after Cosgrave’s resignation, the Web Summit board said that, effective immediately, it would no longer provide financial support to the Ditch. A request for an interview with Cosgrave was not acceded to.
Hickey and Cosgrave were schoolboys in Glenstal together, and then students in Trinity College. ‘I looked up to Mr Cosgrave [in Trinity] and sought to follow in his footsteps,’ says Hickey
In their High Court actions, Kelly and Hickey claim that Cosgrave has run Web Summit so as to oppress their rights as shareholders (they own approximately 12 per cent and 7 per cent respectively) and want the court to order they be bought out at a proper price. This is why the valuation to be put on the business is so important. “I find it hard to reconcile on the one hand,” Cosgrave says in his affidavit, “that Mr Hickey and Mr Kelly claim that I have operated in an extremely damaging way internally to staff and externally in the media, and at the same time assert that the business may be worth €350 million after two years of the worst global pandemic in a century which has crippled and in many cases closed similar businesses.” He is vigorously contesting the claims of the minority shareholders, and countering with claims against them.
Hickey and Cosgrave were schoolboys in Glenstal together, and then students in Trinity College. “I looked up to Mr Cosgrave [in Trinity] and sought to follow in his footsteps,” says Hickey, who served as president of the Philosophical Society after Cosgrave had. Their relationship has since soured, to put it mildly. “In the course of my time working with him, I came to realise that Mr Cosgrave is a highly egocentric, manipulative, volatile and vindictive individual,” Hickey says in his affidavit. When Cosgrave is challenged, Hickey says, he “typically reacts with extraordinary vitriol”.
Kelly, in his affidavit, says it might appear to the court that at times he acted with deference towards Cosgrave, but this was because he feared that if he fell foul of him he would face a similar fate to those against whom he had “pursued personal grievances with ferocious intensity.”
Cosgrave, for his part, says Hickey and Kelly have not been oppressed and their interests had not been disregarded, and has disputed their claims about their role in the history of the business. Hickey, he says, had been involved in “significantly disreputable activity while engaged by the company as an employee and director”.
Web Summit, which is holding a conference in Brazil next week, receives a substantial amount of funding from Portugal (up to €8 million) and Qatar (reportedly €20 million) for hosting conferences in those countries. It also secures income by securing sponsorships and selling tickets. It is the latter two income streams that will be watched closely to see if Cosgrave’s October comments are having a continuing effect.
In a message to Web Summit staff on Thursday of last week, Cosgrave said: “2024 will be our biggest year ever, and by a huge, huge margin. We’ve faced near collapse multiple times. But somehow, we’ve succeeded against all odds.”
The 2022 accounts for Manders Terrace Ltd, the holding company for Web Summit, show a turnover of €52.5 million, up from €31.8 million in 2021, and a pretax profit of €326,489, down from €4.3 million. The group had an average of 239 staff during the year, and Manders had five directors, one of whom was Cosgrave. Directors’ remuneration was €3.6 million. A director’s loan during the year of €1.1 million was repaid after year’s end. During 2022, Cosgrave and his wife, Faye Dinsmore, bought a substantial Georgian property and lands at Rossnowlagh, Co Donegal. The folio for the property indicates it is not mortgaged.
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