'Times' losses behind merger of freesheets
Sunday March 08 2009
The Irish Times's mounting multi-million losses are the primary reasons behind the move to merge the Metro and Herald AM freesheets, the Sunday Independent has learned.
Having endured 45 per cent of an €11m loss on the Metro, and with its readership of 90,000 trailing significantly behind that of the Herald AM (100,000), combined with the mounting losses in the company which led them to lay off 60 of its staff, the Irish Times has raised the white flag and said enough is enough.
When the deal goes through, it will be the first cooperation between the Irish Times and Independent Newspapers in history.
Both freesheet titles were launched in late 2005 but both have been massive loss-makers for their parent companies due to high operating costs and poor advertising.
The Irish Times has seen its circulation fall in the latest figures and made a loss in 2008, and has forecast losses of some €13m this year.
In addition to its Metro losses, the Irish Times has also lost considerably in its 50 per cent investment in The Gloss magazine. According to the latest available figures, The Gloss lost €741,537 in 2007.
But the greatest calamity of them all has to be the €50m in total the Irish Times spent on buying the property website MyHome.ie at the height of the property boom. Now valued at a fraction of that, such a spend has left the newspaper badly exposed to the property crash and the wider recession.
There has been an ongoing tension between the paper's editor, Geraldine Kennedy, and managing director Maeve Donovan over the direction of the Irish Times as a company.
Some sources believe that business decisions taken to end the company's reliance on its core, the Irish Times newspaper, have been financially disastrous.
Despite the criticism of the Irish Times's commercial calamities, Ms Donovan and Kennedy will still receive a basic salary of in excess of €380,000 this year.
While their bonuses this year will not be paid, in addition to their salary they receive generous executive pension funding of about 20 per cent, motor vehicles, travel allowances, and top-of-the-range health insurance. Their total packages are worth over half a million each.
Responding to the criticism and speaking to the Sunday Independent previously, Ms Donovan said: "People here [staff] are sensible people, they understand how difficult the situation is. I don't regret purchasing MyHome.ie and we are doing our best in a very tough industry. We're going through an international financial crisis and a time when newspaper circulations are declining. The two coming together makes things very tough."
- DANIEL McCONNELL CHIEF REPORTER
