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Ireland's political and cultural magazine
— April – May 2013
media
I
RISH media markets are among the most
concentrated in the OECD. The dominant
position of Independent News and Media
(INM) has long been a feature of the national
newspaper market and even with the loss of the
Star on Sunday and the Sunday Tribune, INM
titles still account for over % of all daily and
Sunday national newspaper sales in Ireland.
However, since , the local/regional radio
and press sectors have experience dramatic
concentration. In , there was virtually no
cross-ownership in the commercial radio sector.
Now, of the national, regional and local radio
stations are part of media groups. Just three -
Denis O’Brien’s Communicorp, Thomas Crosbie
Holdings (TCH)/Landmark and UTV Media - own
seventeen stations between them. In the
bulk of the country’s regional and local newspa-
pers were family- or privately-owned with only
one regional group of any significance - owned by
INM. As of , there were fewer than fam-
ily/private local newspapers left, the rest absorbed
by the likes of the Johnson Press, TCH, the Alpha
Group, and the Celtic Media Group.
That media markets ‘naturally’ tend towards
oligopoly is financially logical. The production of
all media texts – newspapers, television and radio
shows or films – is characterised by economies of
scope. As reproducing media texts costs a frac-
tion of producing the first copy, there is a strong
incentive to produce and sell as many copies as
possible. Similarly, having produced content for
one medium, there is a logic to re-purposing that
content for other media. This logic finds expres-
sion in a tendency for media firms to operate at
scale across media sectors, leading to the emer-
gence of large-scale media conglomerates.
TCH’s active pursuit of additional media out-
lets since not only exemplified this logic
but also illustrated its potential pitfalls. From
having no broadcasting holdings in , TCH
acquired, or invested in, FM, Beat FM, Red FM,
Midwest Radio and WLR FM between and
. The four print titles owned by TCH in
swelled to by the end of . Funding
these acquisitions meant servicing long-term
debt which rose to €m by , from effective
debtlessness in . However, the economic
crash slashed radio and print media revenues:
spending on radio advertising in Ireland dropped
by % between and . The figure
for newspapers was even worse: between
and press advertising expenditure more
than halved. This prompted TCH to sell-off the
Newry and Down Democrat paper to John Taylor’s
Alpha Newspapers and the Sligo Weekender to
Datascope Ltd in . A year later, in ,
TCH shutdown the Kerry-based Kingdom news-
paper (the acquisition of which marked
the start of the acquisition trail). However, even
this couldn’t prevent the radical restructuring of
the group and the placing of the Sunday Business
Post into receivership.
INM’s travails parallels those of TCH, albeit
on a much larger scale. The acquisition of the
London-based Independent newspaper in
for €m, drained its resources so INM sold
it (and €m of accumulated debt) for £ to
Alexander Lebedev in . Other investments
proved more successful but the decline of INM’s
core Irish business forced the group to sell off its
Indian and South African investments in a bid to
meet its debt obligations. Even this has not been
enough to tackle fully the €m debt, with the
result that INM is essentially seeking some kind of
partial write-off or debt-for-equity swap arrange-
ment from its lenders.
However, the recent existential crisis for TCH
and INM has temporarily obscured the longer-
term political concerns raised by the scaling up of
media firms. In a nutshell: given that newspapers,
television, radio and other media firms reflect
or construct reality, how wise is it to allow such
power to be concentrated in the hands of a hand-
ful of media corporations which may have their
own views on that reality?
For decades in Ireland, the concern that a
media group might exploit its dominant position
Media ownership
concentrated and
under-regulated
INM titles still account for over 40% of all national
newspaper sales and just three groups own 23 of our
37 radio stations
roderic flynn
21,000
Irish Times
Irish
Independent
Irish Examiner
Irish
Daily Star
Irish Sun
Irish
Daily Mirror
Irish
Daily Mail
Evening
Herald
Sunday
Independent
Sunday
World
Sunday
Business Post
Sunday Times
Irish Sunday
Mirror
Irish Mail
on Sunday
42,000
63,000
84,000
105,000
96,144
Down 8.1%
2011
88,356
2012
131,197
Down 5.5%
2011
123,981
2012
42,080
Down 6%
2011
39,555
2012
74 ,793
Down 11.1%
2011
66,491
2012
72,371
Down 8.8%
2011
66,823
2012
61,999
Down 8.3%
2011
56,872
2012
50,328
Down 0.2%
2011
50,207
2012
62,448
Down 5.8%
2011
58,826
2012
250,724
Down 5.4%
2011
237,185
2012
251,321
Down 13.6%
2011
217,141
2012
43,125
Down 8.6%
2011
39,416
2012
105,066
Down 6.6%
2011
98,132
2012
61,362
Down 31.7%
2011
41,910
2012
115,186
Down 14.5%
2011
98,484
2012
126,000
147,000
168,000
189,000
200,000
221,000
242,000
263,000
Irish Newspaper Sales
2011 2012
Much of the difculty with
the current regulatory
framework lies in its over-
economistic orientation
and its unwillingness to
acknowledge the inherently
political nature of the media
for its own ends focused on Tony O’Reilly and
his prominent position across the Irish media.
However, with the arrival of Denis O’Brien as the
largest shareholder in INM from (and the
concomitant ousting of the O’Reilly family from
its hitherto dominant position), it is the former
Digifone chairman who has come to symbol-
ise concentration of media power in Ireland. In
addition to his INM stake, O’Brien’s Irish radio
holdings account for % of combined local,
regional and national audiences, a market share
second only to RTÉ Radio. There are examples
of other countries in which the dominance of
individual media groups exceeds that of O’Brien,
but his dominant position across two media sec-
tors simultaneously is an outlier by international
standards.
It is tempting to ask whether the INM invest-
ment was motivated by a desire for editorial
influence. The acquisition of Today FM, along
with Highland Radio and – briefly – FM, from
Emap in , made obvious business sense,
given the potential resultant economies of scale
across his broadcasting holdings. However, the
roughly contemporaneous decision to amass a
stake in INM at a point when its share value was
declining is hard to understand in purely financial
terms. On the other hand, O’Brien’s entangle-
ment with the Moriarty Tribunal clearly created
an incentive to assemble whatever editorial
resources were available to mount a defence of his
position outside the confines of the Tribunal.
If that was the strategy (and one might rea-
sonably ask whether anyone would invest €m
to such an end) it was only partially successful:
the relatively even-handed treatment of the
Moriarty Tribunal’s findings about O’Brien in
the Irish Independent was not reflected in the
Sunday Independent’s more aggressive cover-
age. In that regard, however, the recent proposal
to introduce an Editorial Charter whereby INM
journalists would need the written approval of the
Managing Editor before publishing “sustained or
adversarial editorial material concerning indi-
viduals or organisations” might be interpreted
as seeking to impose a certain chilling effect on
journalistic independence.
Given the litigious nature of Irish society,
journalists may be reluctant to ascribe a desire
for editorial influence to media owners. In pass-
ing though, it’s worth noting that no-one finds
it unusual when Volkswagen asserts its author-
ity over production decisions taken by Skoda,
its subsidiary: why should this be any different
in the media industries? However, the key point
is not whether Denis O’Brien in particular can
influence the editorial content of the radio sta-
tions he owns or of INM. Rather it is to point out
how inherently problematic it is that the codes
currently regulating media ownership in Ireland
make it possible for any individual or organisa-
tion to acquire such potential political power.
And, in this respect, much of the difficulty with
the current regulatory framework lies in its over-
economistic orientation and its unwillingness
to acknowledge the inherently political nature
of the media.
Responsibility for regulation of media owner-
ship is spread across the Competition Authority,
the Minister for Jobs, Enterprise and Innovation,
and the Broadcasting Authority of Ireland. In
assessing a potential media merger, the Minister
must consider a range of “relevant criteria”
including: the strength and competitiveness of
Irish media businesses; diversity of ownership
and control of media businesses in the State; and
the extent to which the diversity of views in Irish
society is reflected through the media.
Although the ultimate power to approve
or oppose a merger lies with the Minister, the
Competition Authority must furnish the Minister
with an opinion on how the relevant criteria
should be applied. However, as the Advisory
Committee on Media Mergers noted in the
Competition Authority is “ill-equipped to take
ultimate custody of the important public interest
issues involved. Its expertise lies in the economics
of markets not in issues of plurality or diversity”.
The Competition Authority agrees with this
assessment, and has described the requirement
that it assess the essentially political question
of the impact of media mergers on diversity as
“outside its area of expertise” and “unusual” by
international norms.
In practice, lacking objective criteria for
defining diversity of content, the Competition
Authority has applied market-competition cri-
teria to deliberations on media mergers. Thus
its discussion of Communicorp’s acquisi-
tion of EMAP’s radio holdings exclusively focused
on the potential impact on the radio-advertising
market. Consideration of Communicorp owner
Denis O’Brien’s holding in INM (then %), was
21,000
Irish Times
Irish
Independent
Irish Examiner
Irish
Daily Star
Irish Sun
Irish
Daily Mirror
Irish
Daily Mail
Evening
Herald
Sunday
Independent
Sunday
World
Sunday
Business Post
Sunday Times
Irish Sunday
Mirror
Irish Mail
on Sunday
42,000
63,000
84,000
105,000
96,144
Down 8.1%
2011
88,356
2012
131,197
Down 5.5%
2011
123,981
2012
42,080
Down 6%
2011
39,555
2012
74 ,793
Down 11.1%
2011
66,491
2012
72,371
Down 8.8%
2011
66,823
2012
61,999
Down 8.3%
2011
56,872
2012
50,328
Down 0.2%
2011
50,207
2012
62,448
Down 5.8%
2011
58,826
2012
250,724
Down 5.4%
2011
237,185
2012
251,321
Down 13.6%
2011
217,141
2012
43,125
Down 8.6%
2011
39,416
2012
105,066
Down 6.6%
2011
98,132
2012
61,362
Down 31.7%
2011
41,910
2012
115,186
Down 14.5%
2011
98,484
2012
126,000
147,000
168,000
189,000
200,000
221,000
242,000
263,000
Irish Newspaper Sales
2011 2012
— April – May 2013
explicitly excluded on the ground that the news-
paper-advertising market was entirely separate
to the radio-advertising market.
Given that the BAI’s code on ownership
stresses the need for “open and pluralistic broad-
casting services” and to “promote diversity in
viewpoint, outlet and source”, one might expect
that the BAI would emphasise diversity, in assess-
ing potentially problematic broadcast mergers
or acquisitions. Yet even the BAI’s approach is
informed by quantitative considerations. The
Broadcasting Act requires the BAI to avoid
allowing any individual or institution to con-
trol an “undue number” of broadcasters. The
BAI has interpreted “undue” as anything above
% of the total number of licensed broadcasters.
Anything up to % is considered “acceptable”
while between % and % would require
“careful consideration”. However, the number of
stations owned may not reflect audience reach.
Given the licensed commercial radio and tel-
evision stations, a media company would need
to own stations to breach definitively the BAI
guidelines. Yet, as of , Communicorp’s six
stations (which include two national and one
Dublin-based stations) cumulatively accounted
for % of combined national and regional
audiences.
On the hardly controversial basis that there
is some relationship between a media group’s
influence in the public sphere and the size of its
audience, the failure to use audience as a basis
for market share seems perverse. Indeed when
assessing cross-media ownership, (ie when a firm
already active in non-broadcast media seeks to
acquire a radio or television station), the BAI
does use the firm’s share of the “audiences” for
print, radio, television cable and/or satellite mar-
kets as a proxy for the firm’s “ability to influence
opinion-forming power”. Yet, even a simplistic
measurement of audience size may not offer a suf-
ficient basis on which to assess opinion-forming
power. In the UK, The Sun outsells The Times by
a factor or to but can that straightforwardly
be interpreted as meaning that The Sun has six
times the political influence of The Times?
From a political perspective, the focus on
quantitative measures of media ownership as a
basis for assessing the extent of media diversity
is understandable: the market share of compet-
ing media groups can be objectively described to
the nearest decimal point. Reference to such data
allows regulators and politicians to assert that
their intervention in media markets is based on
definitive, consistent criteria; and reduces the
possibility of a direct conflict with media owners.
However, this approach assumes that the media
can be regulated like any other industry, ignoring
the inherently political role of the media.
Measuring pluralism and diversity of content,
on the other hand is a much thornier, and more
politicised question: one that is hard to make
amenable to even quasi-objective assessment.
Nonetheless, in its deliberations in , the
Advisory Group on Media Mergers concluded any
future Irish legislation on media should include a
statutory definition of diversity of media content
along the following lines: “The extent to which
the broad diversity of views and cultural interests
prevalent in Irish society is reflected through the
activities of media businesses in the State”.
Furthermore the Advisory Group recom-
mended that the impact on diversity of content be
included in assessment of whether to allow a par-
ticular media merger to proceed. The Advisory
Group could have gone further, expanding the
concept of diversity to encompass a requirement
for media outlets to offer marginalised voices
direct access to audiences. However, even the
minimalist conception is potentially radical in
requiring a (necessarily subjective?) judgement
as to what views and interests are prevalent in
society as a prerequisite for assessing the extent
to which those views were reflected in the mass
media. And, given the nature of that decision
the Advisory Group was clear that the judge-
ment should be made by a Government Minister
who, as a democratically-elected official would be
answerable to the Oireachtas: “There is no reason
why the manner in which the Minister discharges
the function [of assessing media mergers] should
not be transparent and meet the needs of mod-
ern society”.
Ironically, precisely this point was made
by the Competition Authority in its
Consultation on the Assessment of Media Mergers.
Acknowledging the problems with a purely
numeric approach to diversity, the Consultation
argued that some judgement regarding the effect
of a particular merger on the extent of diversity of
view would have to be made. Crucially, however,
the Consultation stressed that “these judge-
ments need not be plucked from the air: they can
be informed by relevant data” to be captured in
the construction of a “media map” combining
quantitative and qualitative measures of media
power: “a description of the media landscape in
Ireland that would minimally contain details of
who owns what media businesses, who uses what
media outputs, what degree of trust users accord
to such outputs… the media map would also pro-
vide evidence on the practices of ownership and
the orientation of particular media outlets with
respect to major political, social and economic
issues”.
Though such a proposal would entail devot-
ing some resources to establishing a relatively
objective basis for capturing questions of trust
and orientation, the tools for doing so (ie audi-
ence surveys and media-content analysis) are
well-established in international media research.
Sadly, however, although the imminent bill on
media ownership seems likely to include some of
the Advisory Group on Media Mergers rec-
ommendations (which is welcome), there seems
little prospect that it will adopt the even more
proactive approach envisaged in the Competition
Authority’s consultation.
In any case, it may be that since the Advisory
Group’s report, the media landscape has
altered in ways which make some of its recom-
mendations less relevant. Though recommending
that the internet presences of media groups be
taken into account in assessing overall media
market share, the Advisory Group made little
reference to – then still emerging – social media.
However, although the precise role of participa-
tory media (Twitter, Facebook and other social
media) in constituting the public sphere remains
unclear, the ongoing decline of newspaper sales
suggests that there is a shift occurring in the fab-
ric of the public sphere. Whether this renders
concerns about the dominance of particular
individuals of traditional media less relevant or
simply irrelevant remains to be seen.
Research interests of Dr Roderic Flynn of DCU
include Broadcasting Policy, the Social History of
Communications, Political Economy of the Media
and the History of Media Technology
media
On the basis that there is
some relationship between
a media group’s inuence
in the public sphere and
the size of its audience, the
BAI’s failure to use audience
as a basis for market share
seems perverse
Denis O’Brien: concentrating
