Property advertising was ‘less than 1% of RTÉ revenues’

Property related advertising accounted for less than one per cent of overall ad revenues in RTÉ at the height of the boom economy, the Oireachtas banking inquiry has heard.

The committee heard of a clear separation between commercial and editorial operations at the broadcaster.

Advertising revenue during the peak of the boom saw just 0.9 per cent coming from the property sector, and 0.3 per cent at the lower end. The financial services sector accounted for 4.6 per cent at the peak, but generally stood at about 3 per cent.

Paul Mulligan, head of commercial operations at RTÉ said the institution had clear guidelines on keeping its content and decisions independent from vested interests.

Fintan Drury was a non-executive director of Anglo Irish Bank from 2002 to 2008 and chairman of the RTÉ Authority between 2005 and 2006. However, Mr Mulligan told the committee the broadcaster never received any advertising revenue from the bank.

Ed Mulhall, former head of news and current affairs who retired in 2012, pointed out a clear demarcation between commercial and editorial, or content, decisions.

“The inquiry has asked about the relationship between the editorial and sales functions within RTÉ. In my experience as MD of news and current affairs, there is none,” he said.

“News and current affairs was kept separate from any commercial activity. So I have no recollection of any representations or even queries from the commercial side of RTÉ on an editorial matter and none concerning the subject matter of this inquiry.”

Earlier, the former editor of the Irish Independent has said it had “no hidden agenda to try and artificially bolster” the property sector during the boom economy.

Mr O’Regan, who was editor of the daily newspaper from 2005 to 2012, said there was always a “strict separation” between the commercial and editorial aspects of the paper.

“It would be wrong to retrospectively arrive at definitive conclusions, regarding the coverage of the economy and the property market, on the basis of subsequent events, and evidence, which was not then but is now in the public domain,” he told the committee.

The “road map” for editing was ever changing and coverage of the economy and the property sector could not be conducted in an intellectual vacuum, he said.

“Editors, writers, contributors, and analysts, cannot but be influenced by the prevailing climate at a given point in time,” he explained.

The country was in an era of “unparalleled prosperity”, characterised by high employment and immigration.

“All of these factors led to a powerful so-called ‘national feel good factor’. Ongoing reporting and analysis of economic and related matters continued against this background,” he said.

“The overwhelming consensus was that despite the rapid growth of the construction industry – and the ongoing rise in house prices – the essential pillars of the economy were sound.

“The prevailing wisdom was that if a ‘property bubble’ was to emerge – the country’s still high employment figures and positive government finances – would mitigate against a serious economic downturn.”

Along these lines, Mr O’Regan said, the prevailing view was that a soft landing would follow.

Michael Doorly, the former financial director and current company secretary of Independent News & Media, the parent company of the Irish Independent, said he did not believe that newspapers could create booms.

“Demand for property is created by a mix of factors over which the media has no control: overall economic conditions; consumer confidence: ready availability of finance; income trends: demographics and rate of home formation and societal capacity for risk,” he said.

The two central revenue streams for newspapers, advertising and circulation, were vital.

“The requirement to maintain and build upon the editorial integrity of its publications underpins the INM policy of the strict and absolute separation of the editorial and commercial functions in the organisation,” Mr Doorly said.

During the boom, advertising revenues grew within the industry. The Irish Independent and the Sunday Independent increased income by an average of 6.5 per cent per year, or a total of 36 per cent, the committee was told.

Advertising and circulation revenues grew by 52 per cent and 17 per cent, respectively. Mr Doorly said this growth was not surprising in an economy where personal consumption grew at an average of almost 5 per cent a year between 2002 and 2006 and increased by 7.3 per cent in the first half of 2007.

Property advertising represented an average of 14 per cent of overall advertising income, although the level varied from a low of 11.2 per cent in 2002 to a peak of 17.2 per cent in 2006.

“On average, revenue from the property advertising stream represented just over 9 per cent of overall income over the years concerned,” Mr Doorly said.

Committee chairman Ciaran Lynch asked if either Mr Doorly’s or Mr O’Regan’s opening statements had been influenced by the “owner” of INM. Mr Doorly said they had not.

Socialist TD Joe Higgins challenged Mr O’Regan on whether he would like to revise his statement regarding there being no attempt on the part of the paper to bolster the property sector.

He cited examples of “property awards” promoted by the Irish Independent during the construction boom, quoting “glittering” ceremonies and stating that many developers featured had ultimately ended up in NAMA.

Mr O’Regan said the issue required context; the newspaper, like other publications, had run various awards in various sectors. He said the example was akin to a politician who made an historic statement and who is subsequently asked: “Did you not know what was going on?”