Ex-editor says ‘Irish Times’ not compromised by property advertising

Editorial standards at The Irish Times in the years leading up to the financial crash in 2008 were not compromised by revenue from property advertising, former editor Geraldine Kennedy told the Oireachtas Banking Inquiry.

“The same editorial standards applied in the property supplements as elsewhere in the newspaper,” Ms Kennedy said. “There was no trade-off between editorial and advertising. Advertising features were clearly signposted. Advertisers did not write editorial copy.”

Ms Kennedy added that she was “constantly getting complaints” from Government politicians and opposition deputies about articles that appeared in the newspaper, but this never compromised the independence of its coverage.

Ms Kennedy said it would have been "odd" if she had not met the Taoiseach of the day to talk about policy issues, But there was "no pressure" placed on her during these meetings to change the newspaper's editorial coverage. "I wasn't bullied by Charlie Haughey when in my 20s so I wasn't going to be bullied by lesser politicians in my 50s," she said.

Ms Kennedy said that having recently reviewed editorial policy and the newspaper’s approach to reporting the property boom in the run-up to the banking crisis, she was not sure “what we could have done differently” to “predict the magnitude of the fall”. “We reported the news forensically. We challenged the consensus and canvassed all views and published them.”

Ms Kennedy noted that The Irish Times was the only newspaper to publish the article in December 2006 by Morgan Kelly, professor of economics in UCD, predicting there would be a property crash, with prices falling by between 40 per cent and 60 per cent.

Estate agents

Ms Kennedy, who was editor of The Irish Times between 2002 and 2011, told the committee how, in late 2007, the paper complained to the professional bodies of auctioneers and valuers that some estate agents were providing misleading selling prices to its property supplements. Ms Kennedy said the introduction of the national property register in 2012 was a consequence of this discovery in The Irish Times.

Maeve Donovan, who was managing director at The Irish Times for eight years up to her retirement in 2010, said the company's business model was funded by a combination of cover price, subscription revenue, print and digital advertising income, and revenue from printing external publications.

“The ratio of advertising to circulation revenue was typically 60-40 on average,” she explained. Ms Donovan described property as a “key pillar” of the newspaper’s publishing revenue, and a “driver” of readership.

At its peak, property advertising amounted to 17 per cent of total revenues, she said. This amounted to €10 million in 2002, rising to €22 million by 2006.

Ms Kennedy said advertising revenues helped to fund the €30 million a year cost of the company’s editorial operation, and helped to fund the cost of running a network of correspondents in foreign postings.

MyHome.ie

Ms Donovan said The Irish Times Ltd took part in two notable property transactions in the years leading up to the financial crash – the purchase of MyHome.ie, and the sale of its former offices at D'Olier Street/Fleet Street in 2007 for €29.1 million. In spite of developing several digital platforms for property, including Ireland.com/property, Irishtimesproperty.com and Nicemove.ie, none proved to be "viable competition" for MyHome.ie.

Ms Donovan said MyHome. ie cost The Irish Times €40 million to acquire in 2007. Additional earn-out payments for the sellers of up to €10 million never arose as the economic crash meant the financial targets that would have triggered them were never met.

Ms Kennedy said she had “reservations” about the purchase price of MyHome.ie at the time of the deal, but was not opposed to diversification.

When asked if she now regretted this purchase, Ms Donovan said: “I wish to God we’d paid less, but I’m very glad today we got it.” She acknowledged that the “bulk” of the purchase price had been written down in the company’s accounts, but said it was always a long-term strategic play to diversify revenues towards digital media.

MyHome.ie remained a "key strategic asset" for The Irish Times and "trades profitably", Ms Donovan added. "The property market will be with us, for good or bad, for years to come."