Newspaper business THE BUSINESS: To remain independent the company has had to adopt many business models on its way to becoming a trust. COLM KEENA

Few Irish businesses have been so resilient in the face of so many challenges as The Irish Times. Immediately on its foundation by Lawrence Knox in 1859, the new paper had to compete with five other morning titles and two evening titles, as well as the London newspapers which were being marketed aggressively in Ireland. Yet, it was an almost immediate success. The newspaper, which came out on Tuesdays, Thursdays and Saturdays, was cheaper than its rivals and its early commercial success led to the decision, just four weeks after its first edition was published, to become a daily newspaper.

Knox's Irish Times consisted of four pages of dense type, arranged in six columns on each page. Printing was a laborious process, though news gathering made use of the latest technologies. Knox had promised, in his first editorial, that "For the benefit of our Military subscribers we have made arrangements to receive by Telegraph the whole of the Military Gazette, almost simultaneously with its publication in London."

By early 1860, sales had reached a credible 8,700 and by September of that year were at 10,000. Thirteen years later, according to Dermot James's From the Margins to the Centre, A History of The Irish Times, sales were at 15,888.

On Knox's death in 1873, the newspaper was bought from his widow for £35,000 by Sir John Arnott, a successful Scottish-born entrepreneur who had come to Ireland at a young age to seek his fortune. He had business interests in railway companies, breweries and steamship lines as well as the eponymous department store chain which he founded in 1843. He was very much associated with Cork where he served three times as mayor as well as having been MP for Kinsale.

Arnott's purchase of the business initiated a family involvement with The Irish Times that continued for more than 70 years. He personally directed the company's fortunes up to the time of his death in his home in Montenotte, Cork, in 1898, at the age of 84, whereupon his son, the younger Sir John, took over at the helm.

Twenty-three years after it was founded, the newspaper opened its own printing press on Fleet Street, a location where it continued to have a presence for the next 130 years. In 1875 the Weekly Irish Times was published. Its name was later changed to the Times Pictorial and it continued in existence up to 1958, at times outselling the daily title.

Arnott's investments in the paper were justified by steadily rising circulation figures. The quality of the paper's news gathering, and the rising political temperature associated with the debates on Home Rule, helped circulation hit the 25,000 mark in 1885. Profits were healthy: £27,000 by 1895, £35,000 by 1899.

In November 1900 The Irish Times Ltd was incorporated. It was one of the earliest companies to register under the Companies Act and has the registration number 2,514. The company still has its minute books and the first meeting of the board was on November 21st, 1900, at 31 Westmoreland Street, at noon. The directors present were Sir John Arnott, David Arnott and James Carlyle. The written minutes record that David Arnott was appointed departmental manager for London, at a salary of £400 per annum and John Carlyle was appointed manager on a salary of £700 per annum. It was also agreed that a prospectus would be issued so shares could be bought by the public. The Arnott family retained control of the company through its shareholding.

The racing paper, The Irish Field, was bought by The Irish Times Ltd in 1903, but the business was about to hit harder times. In 1905 the Irish Independent was launched by William Martin Murphy, bringing new competition into the morning newspaper market. The fall in the size of the Protestant population between 1911 and 1923 put pressure on the business, as did the continuing decline in that population in the decades after. During the 1916 Rising the main premises of The Irish Times escaped damage, but its auxiliary printing office on Lower Abbey Street was taken over by the rebels who used the large rolls of newsprint they found there on their barricades. The premises was eventually burned to the ground in the fighting, as is recorded in the minutes of a board meeting held in Westmoreland Street on May 10th, 1916:

"The secretary reported that during the rebellion in Dublin, which commenced on Monday 24th April 1916, and ended on 6th May 1916, the reserve premises of the company in Abbey Street have been destroyed by fire, including machinery and all stock."

The company continued in business through the rising, the War of Independence and the Civil War. A note in the minute book for the board meeting of October 28th, 1922, records how a pooled fleet of cars supplied by The Irish Times (two cars), the Irish Independent, Eason's and the Freeman's Journal, managed to deliver newspapers to towns such as Tullow, Carlow and Kildare, despite a strike at the Great Southern and Western Railway. "These services were all working satisfactorily," the minutes record.

Perhaps inevitably, given the shock of the decline of its natural readership and the loss of the paper's position as the voice of the Establishment, The Irish Times took some time to adjust to the changes that were happening in newspaper design and technology. Throughout the 1920s, it remained an eight to ten-page package of dense type. From 1923 onwards, though, it did begin to feature photographs, mostly supplied by its first staff photographer, a former Royal Flying Corps reconnaissance officer, George Leitch. The redoubtable general manager, John J. Simington, who had joined the paper in 1878 and would still be on the board in 1949, revolutionised distribution by getting the Great Southern Railway to put on a special newspaper train, shared with the Irish Independent.

The 1930s were nonetheless a dismal period commercially. Sales slipped from 36,500 in 1926 to 30,000 in 1930. Throughout the 1930s, they remained around the 25,000 mark. The minutes of the board meeting of May 14th, 1934, noted the decision not to pay the usual interim dividend "owing to the present unsettled conditions of trade." Nevertheless, the paper did remain modestly profitable, even if those profits, at £22,000 in 1938, were lower than they had been in the 1890s.

In 1941, a successful Dublin businessman, Frank Lowe, was co-opted onto the board. He noted after a time that the remaining Arnott directors were willing to part with their shares when they felt in need of extra cash, and he increased his shareholding over time. In 1945, Lowe replaced Loftus Arnott as chairman, and in 1954 he and his partners bought out the majority of the remaining Arnott family shares. He invited brothers Ralph and Philip Walker to join the board, as well as his adopted nephew, George Hetherington. Philip Walker had a well-known company on Liffey Street which sold radios, bicycles and prams.

Lowe's arrival, and the replacement of the long-serving Simington with "Pussy" Tynan O'Mahony (father of the comedian Dave) as general manager, was part of a more general modernisation of the paper. It was redesigned in 1941, with news rather than advertisements on the front page, and sports coverage moved to the front of the paper, where it remained until the 1980s.

In September 1951 the company's premises on Fleet Street was burned down in a fire and the newspaper was for a time printed on the press owned by the Evening Mail. At the time of the fire a new printing press had been awaiting installation and within two months it was in place and ready to roll. It was the most up-to -date printing press in the world at the time, capable of turning out 160,000 papers an hour when at maximum speed.

Ralph Walker became chairman of the company in 1959, on the death of Lowe, and continued in the position for 14 years. Economic conditions in the post-war period were dismal, advertising income was poor, and profits were very low – less than £20,000 a year. The minutes of the board meetings record the directors considering sales, circulation figures and share transfers, as well as minor matters to do with the payment of staff. The minute for the meeting of December 28th, 1954, for instance, records the decision to give a cheque for £100 to a van driver's widow, Mrs F McCrossan, while Christmas grants of £10 and £5 respectively are agreed for J Grant and J Scott "of the works staff, who are in hospital". In January 1955 it was agreed that the Belfast office could dispose of a Morris car and purchase a Hillman station wagon "at a net cost of £225". In 1959 the board was told that Seamus Kelly (who wrote under the pen-name "Quidnunc") had not had any holidays the previous year and wanted to take four weeks leave together. "It was agreed that he could do so on this occasion."

As the 1950s progressed the directors were concerned for the company's survival. In 1957, JJ McCann, an entrepreneur who eight years earlier had launched the Radio Review, joined the board. The Irish Times took over the Radio Review and McCann became managing director of The Irish Times Ltd. In 1958 he closed the Pictorial Weekly so as to target resources into a new project, the Sunday Review. The idea was to compete with the Press and Independent groups, each of which had evening and Sunday titles as well as their daily newspapers. The Irish Times next bought the Evening Mail as part of this project. However the strain of publishing the two new titles eventually threatened the survival of the main paper. In October 1961 the Radio Review was sold and the following year the Mail was closed and a year later the Sunday Review. McCann resigned and was replaced by Ralph Walker.

In the late 1950s, one of the most significant figures in the paper's history, Thomas Bleakley McDowell, had his first involvement in The Irish Times Ltd. He was engaged as an independent management consultant to carry out a full review of the workings and structures of The Irish Times. In 1962, the board, having accepted his recommendations, decided to ask him to carry them out and "place the company on an economic basis". He was appointed a director and then vice-chairman.

By then, McDowell was in a position to form a partnership with Douglas Gageby, with whom he would go on to transform the nature of the paper. In April 1959 George Hetherington had written to Gageby, then with the Evening Press, inviting him to take up the position of joint managing director of The Irish Times Ltd. An earlier approach had been rebuffed, but when Hetherington included a seat on the board, Gageby accepted. A copy of the letter to Gageby is attached to the company minute book and shows Gageby being offered a five-year contract at a salary of £2,500 per year. Gageby's reply is also in the minute book and shows that he noted, in his response, that his salary would not be "pegged" at £2,500 for the duration of the five-year period. When Hetherington resigned in 1962, Gageby became managing director.

A year later Gageby took on the role of Editor. McDowell, who purchased one-fifth of the company's ordinary shares, became chief executive, a position he was to retain until 1997. McDowell and Gageby developed a successful partnership that in time managed the business out of the dire situation in which it found itself.

Profits for the overall company in 1964 were still only £30,000. Yet, the circulation of The Irish Times rose rapidly, from 35,000 in 1960 to 45,000 in 1966. By 1974, when the paper had definitively repositioned itself as a liberal, up-market daily for a modern European society, circulation has reached 69,500. Profits rose to £427,000.

Success brought its own dangers. According to James's history, McDowell became concerned that the company had become attractive to a potential predator and he began to give serious thought to the creation of a trust. He visited the Guardian, the Scotsman, the Observer and the New York Times while researching the matter. Eventually the shareholders were bought out, for £2 million, with the help of money borrowed from the Bank of Ireland, and the company was taken private and put into the ownership of The Irish Times Trust.

A notable aspect of the move, however, was the extent to which the shareholders who had sold out to the trust retained control of the company, with McDowell in particular being put in a secure and powerful position. The trust had the right to appoint a majority of directors to the board and the directors nominated by the trust had more voting rights than the executive directors. Furthermore McDowell, being the holder of a special A share, was given the right to remain a governor of the trust for life. He became chairman of the company and chairman of the trust.

The company's memorandum and articles of association were changed so that its new objectives included such matters as the support of constitutional democracy expressed through freely elected governments, and the progressive achievement of social justice between people and the discouragement of discrimination of all kinds.

Within a year of the trust being created there was an international recession caused by the Gulf crisis and the company's commercial position worsened. Advertising revenue dried up, and sales fell – the company lost £400,000 in 1976. Its ability to keep up repayments on its loans from the Bank of Ireland was affected, but the bank was accommodating, in part because it saw it as in the bank's interest for the newspaper to remain in existence.

The company weathered the storm and prospered under Gageby's editorship: by 1979 sales had reached 77,000, and the company was back in profit. The paper had also begun the long process of moving from hot-metal printing technology to the new process of computerised photo-composition. In 1984, the company got a windfall when Reuters news agency, in which it held shares, was floated on the stock exchange, enabling The Irish Times Ltd to buy a new printing press that could handle colour, and to discharge its debts to the Bank of Ireland.

Gageby was replaced as Editor by Conor Brady, who held the position from 1986 to 2002, and who came to the job with the ambition to push circulation to 100,000 within ten years – an ambition he more than fulfilled. By 1998, the paper was selling almost 112,000 copies daily. Brady worked closely with Louis O'Neill, who was managing director for two and half decades. Between them they managed a very significant expansion in the paper's operations, with a substantial increase in the journalistic staff, the opening of foreign bureaux, the addition of new supplements, including a Saturday colour magazine, and a successful transition to computerised typesetting. The paper also produced, in 1994, the first online edition of any Irish or British newspaper.

The September 11th attacks on the US in 2001 led to a sharp downturn in economic activity worldwide, a development which quickly manifested itself in reduced advertising sales. This was particularly serious for The Irish Times as it has invested heavily in a new printing plant at Citywest on the outskirts of Dublin, complete with a state-of-the art press capable of publishing 64-page colour newspapers. In November, the company announced it was facing losses of £2 million for 2001 and that its position was unsustainable. The company initiated a voluntary redundancy scheme aimed at reducing its staff by one-third. The crisis also led to changes in the company boardroom and the trust, and a restructuring of the relationship between the two.

Thomas McDowell was replaced as chairman of the trust by TCD geneticist Professor David McConnell. Nick Chapman, who had come from the BBC to replace O'Neill after he retired in 1999, was in turn replaced by Maeve Donovan. Don Reid was replaced as chairman of the company by Brian Patterson. In August 2002, Brady announced his intention to retire and was replaced by Geraldine Kennedy, the first woman to be appointed Editor of an Irish daily newspaper.

By 2003 the business had returned to profitability, making a profit of £7 million. Circulation rose towards 118,000 copies a day. The business continued to prosper, not least because of buoyant advertising sales from the property boom and job recruitment. In 2007, David Went, who had been chief executive of Irish Life and Permanent, replaced Patterson as chairman of the company.

In late 2008, as the property boom came to a sudden end, and the economy began a sharp contraction, the company again found itself faced with costs that exceeded its income. It was in the relatively fortunate position of having accumulated significant profits during the boom years, and of having sold its old Fleet Street headquarters in order to move to new offices in Tara Street at the height of the property market.

Like all newspapers around the world, The Irish Times faces into uncertain times, dealing with the challenges of new technologies, the online revolution and profound economic change. Yet the advantage of having been around for 150 years is the knowledge that it has survived far bigger challenges before. Economic cycles of boom and bust, disruptive technological change, and even the disappearance of its known political and social context, are all familiar aspects of the world that the paper has not merely reported on but experienced. New things are the very stuff of newspapers, and The Irish Times has been remarkably good at adapting to them.