Independent News & Media's (INM) chief executive has raised the prospect of a sale of the newspaper group, as it grapples with flagging profits, plans to charge online subscriptions and an investigation into alleged data breaches and corporate governance issues.
Michael Doorly, who has led the company since the 2017 departure of his predecessor Robert Pitt, told members of the Dublin investment community in meetings this week that INM may end up being sold.
The executive insisted, however, that he was not aware of the intentions of the company's two biggest shareholders – businessmen Denis O'Brien and Dermot Desmond, who between them control about 45 per cent of the shares.
INM released annual results last week that starkly illustrated the challenges facing the newspaper industry, and it as the sector’s biggest player here.
It announced a more than 2 per cent decline in group revenues to €191 million while pretax profits fell by more than 15 per cent to €24.1 million. Its digital revenues, meanwhile, went into reverse. INM’s cash pile also fell by about 10 per cent to €81.7 million.
The group also announced a new strategy – INM@21 – which includes building a new publishing model to help it “[optimise] revenues, [reduce] costs and [build] the capability to respond to the changing needs” of readers. The company said it has set aside €5 million for the first phase of the project.
Paywall
Mr Doorly said a year ago that INM was working on a subscription model, often known in the industry as a “paywall” where readers pay to access articles online. However, the company said last week that it could be the first quarter of next year before this is in place.
It is understood that INM’s board has not yet signed off on the subscriptions blueprint and that the company has not yet developed the capacity to process payments on its website, which would allow it erect a paywall.
INM also revealed in last week’s results that it recorded a €3.5 million charge for legal costs last year. The costs were incurred due to investigations by the Office of the Director of Corporate Enforcement and the Data Protection Commissioner, as well as the subsequent appointment of High Court inspectors, after issues including an alleged major data breach at the group in 2014.
The High Court inspectors are also investigating claims by Mr Pitt that he was pressured by the group's former chairman, Leslie Buckley, to pay an inflated price for Newstalk, a radio station owned by Mr O'Brien. Mr Buckley has denied any wrongdoing.
The inspectors are scheduled to present the first phase of their report to the court in coming weeks. The case is next listed for hearing before Mr Justice Peter Kelly, president of the High Court, on May 7th, according to court filings.
INM has been the subject of persistent market rumours in recent months that it could be sold. Sources said German media group Axel Springer had taken a look at INM in the past, while Norwegian group Schibsted has also been rumoured to hold an interest.
When asked last week by The Irish Times about the rumours, Mr Doorly replied: “We hear this speculation and it’s very hard to comment on it because that is all it is.”
Last night he again declined to comment further, when asked about his discussion of INM’s sale prospects this week with members of the Dublin investment community.
