Wednesday 22 November 2017

Setanta blows a UK gasket as fireworks stir world of media

Laura Noonan

Laura Noonan

FROM the implosion of Communicorp's Digital Terrestrial Television bid in the spring to the implosion of radio's Independent Network News in the winter, 2009 was a year when the biggest media stories went bang, almost literally.

The explosive cacophony included the mid-year contributions from the boardroom battles at Independent News & Media, the aborted sale of Johnston Press' substantial Irish assets and the battle to salvage the €68m "revenue shortfall" at RTE.

But against a soundtrack that could rival even New York's famed July 4 fireworks, it was sports broadcaster Setanta that made the most deafening impression, as its massive UK arm went up in smoke last summer.

Having spent months wrangling with restructuring plans and denying rumours of imminent collapse, Setanta went into emergency mode towards the end of May as it ran short of cash to pay for its sports rights.

The gravity of the situation became undeniably clear on June 10, when Setanta confirmed that it had suspended new subscriptions, citing the "current circumstances".

Interest

A mooted £20m (€22.4m) rescue from Russian billionaire investor Len Blavatnik offered a brief glimmer of hope, as did potential interest from Chorus NTL owner Liberty Global, but in the end neither party stumped up the cash and Setanta UK formally fell into administration on June 23.

The Irish arm was ultimately saved after minority shareholder Denis Desmond, of MCD fame, agreed to put in more cash in exchange for a majority stake, but the UK was the engine of Setanta's rapid rise to the major leagues and its collapse left one of Ireland's biggest international media success stories decimated.

While Setanta's was the biggest and most lamented collapse of the year, there were others aplenty, most notably Independent Network News, or INN as it's known in homes the length and breadth of the country. Having spent 12 years supplying news to almost all of Ireland's local radio stations, INN's shareholders held up the white flag on the first day of October, claiming the service was "no longer financially viable".

Less than 24 hours later, INN's biggest shareholder, UTV, was touting for business for its own "news services" product, provoking fury at journalists' union the NUJ, which questioned the UK broadcaster's role in the closure of the syndicated news service.

The fireworks didn't end there, as sister company Independent Radio Sales (IRS) soon found itself in the headlines following an explosive parting of the ways with chief executive John O'Connor, who also acted as head of INN.

The battle between Mr O'Connor and INN/IRS was ultimately played out in the High Court, providing eye-watering copy about the authorisation processes for six-figure bonuses and the alleged "interrogations" in the run-up to Mr O'Connor's eventual termination for gross misconduct.

Future

Another less sexy but massively significant casualty of the year was Communicorp's Digital Terrestrial Television (DTT) bid, which ran aground in April, with profound consequences for the future of the "next generation" of Ireland's TV.

Partnering with Swedish firm Boxer, the Denis O'Brien-led broadcaster fought off stiff competition to clinch the contract for paid-for DTT back in July 2008, but less than a year later the "economic circumstances" prompted Communicorp and its partner to think again.

Their decision was a sizeable embarrassment to the broadcasting regulator, which had judged the robustness of the proposal, and a sizeable headache for RTE, which was due to launch public service DTT in tandem with Boxer/Communicorp and had already invested millions in technology for the new system.

The commercial DTT contract was swiftly re-awarded to the Eircom-led One Vision consortium, but seven months on, contracts have yet to be exchanged with either the broadcasting regulator or RTE's networks division, and if Paddy Power was offering odds on the proposal falling apart, they'd be short ones.

The same could be said for the chances of RTE's top "talent" retaining their provocatively high salaries once the national broadcaster closes in on the predicted revenue shortfall for 2010.

Having spent much of 2009 slashing and burning on wages, hospitality and programming costs, RTE's financial gurus are believed to be gearing up for a game-changing assault on the higher paid next year, despite having convinced Gerry Ryan and his better disposed colleagues to part with 10pc of their wages earlier this year.

Headline

Between all that and the creation of the Broadcasting Authority and installation of new boss Bob Collins, broadcasting was the biggest media headline grabber of the year, but the world of print was by no means quiet.

Kicking off proceedings, Johnston Press quietly put its 14 Irish titles on the market at the dawn of the year, retaining Raglan Capital to do the honours.

By May the UK publisher's tail was well and truly between its legs, after it admitted it had failed to receive "sufficiently" high bids and was pulling the titles from the market. Having spent more than €250m assembling the portfolio, the highest bid Johnston received was believed to have been well below the €40m mark.

Another print business making the news was Independent News & Media (INM), Ireland's largest newspaper group and owner of this newspaper. A boardroom battle was played out for much of the year, along with efforts to successfully restructure the group's debt.

By the end of the year, the high octane wranglings appeared to have been resolved with INM's bondholders taking a substantial stake in the plc and the phased sale of international assets, leaving the group on a firm financial footing for 2010.

Elsewhere in pressland, INM freesheet Herald AM and Irish Times/Daily Mail/Metro International's Metro agreed to combine their resources to form Metro Herald, while 'as Gaeilge' title Foinse has become part of the INM stable.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business