Denis O’Brien’s decades of investment in Irish media gained him almost nothing

For the first time in 32 years, Denis O'Brien is no longer an Irish media mogul. Two years after selling out of newspaper publisher Independent News & Media (INM), this week's deal to offload radio group Communicorp to Bauer Media still needs State approval. That will be a mere rubber-stamping exercise. There isn't a reason in the world why any regulator acting logically would block it.

As recently as 2019, O’Brien was the dominant figure in the private media landscape. Obviously, he never owned the largest media company, RTÉ – or at least, no more than any of the rest of us.

But outside of the television sector, where he never had much influence, no single investor in Irish media has held greater sway over the industry than O’Brien has for most of his three decades of involvement. His final exit will be as much of a change for the Irish media sector as it will be for the man himself.

It is well known that O’Brien has personally lost hundreds of millions of euro on his Irish media foray – up to €500 million of his fortune went down the plughole at INM alone. With the relentless forwards march of digital media distribution, the landscape for traditional operators such as Communicorp is only going to get tougher, so there is no mystery as to why he might choose to sell now.

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A more interesting question revolves around why O’Brien became so deeply involved in Irish media in the first place.

Failure

Whatever his intentions, what did he get out of it? What did he gain? Given the disaster zone that was left behind after his exit from INM, and the lack of any significant financial return from Communicorp after 32 years, the answer seems to be that he has gained almost nothing from it at all. Compared to his other, far more successful investments, his media punt has been a failure.

Media companies are a bit like football clubs, in that they attract all sorts of owners with priorities that can be difficult to discern. Can anybody really understand why Roman Abramovich bought Chelsea? In football, some claim to do it for the love of the game.

That can also be true in media, although O’Brien has rarely displayed affection for or an understanding of journalism.

In both spheres, some investors get involved for the public attention, but that hardly seems an appropriate explanation in O’Brien’s case. He appears to despise the attention that his Irish media investments brought on to his other interests. Or, at least, he seems to despise its nature and scope.

Then there is the question of money, of course. The Glazer family, for example, has done very well financially out of Manchester United, making an irrelevance of their unpopularity with its fans. In media, too, some moguls, such as Rupert Murdoch, made pretty much their entire fortunes in the business.

But this is not the case with O’Brien. He is said to be a billionaire but little of his fortune can be credibly attributed to his media holdings, although 98FM and Communicorp were a useful cash cow in his early years of business.

He later made serious money out of unrelated assets in telecoms, infrastructure and, latterly, property. In latter years, his media investments have brought him only pain.

In terms of his motivation for staying so deeply involved in media for so long, O’Brien seems to fit more closely into a cohort that can inspire perplexity in football and media people alike: rich men who, in stark contrast to elsewhere in their empires, seem prepared to tolerate financial punishment.

Why do they do it? Is it in pursuit of some nobler purpose? Is it the influence, the prestige, the power? Politicians, especially those in Fine Gael, used to fall over each other to be photographed with O’Brien. For various complex reasons, such as the findings of the Moriarty tribunal and the corporate governance mess at INM that engulfed his associate, former chairman Leslie Buckley, that impulse among politicians is not as strong these days.*

Buckley, who was O’Brien’s representative on the INM board, denies all allegations of wrongdoing. Let’s see what the State investigators conclude.

Financial return

O’Brien surely founded Communicorp with the hope of a financial return, even if he eventually made little from it. The whispers from the company’s camp this week are that he sold it to Bauer for more than €100 million. Yet he ploughed way more than that into it over the years. It still owes him €104 million, ever after he converted €50 million of his loans to equity in 2011.

O’Brien has said in the past that he first bought into INM because he hoped it would be a decent investment. There was also the added temptation of taking on his then-nemesis, Sir Anthony O’Reilly. He won that battle. But given the avalanche of scrutiny and strife that has arisen since O’Brien became the dominant figure at INM, there is doubt over whether he ultimately won the war.

An interesting aspect of O’Brien’s exits from the media sector – INM in 2019 and Communicorp now – is that in each case he sold out to specialist media investors with a long heritage in the business; people who appear to have the dirt of media and journalism under their fingernails.

Mediahuis, which took on INM after O’Brien went, is chaired by Belgian businessman Thomas Leysen, whose father first invested in newspapers almost 50 years ago. Meanwhile, the German group Bauer that has bought O’Brien’s radio assets, is currently led by the fifth generation of that family in the business.

O’Brien may not have wanted it to end this way. But there is little denying that his arduous voyage into the stormy seas of media led him nowhere.

Gavin O’Reilly, whom O’Brien ousted as chief executive of INM as part of the battle with his father, put it most succinctly two years ago when Mediahuis took over INM: “We have seen the media operator that Denis O’Brien is not.”

* This article was edited on 26/2/2021 to correct an error