Former Irish Times editor defends editorial integrity

Geraldine Kennedy tells banking inquiry ‘magnitude’ of crash not predictable

Former Editor of The Irish Times Geraldine Kennedy has appeared before the Oireachtas Banking Inquiry speaking on the role of the media during the property boom in the lead-in to the banking crisis.

 

Editorial standards at The Irish Times in the years leading up to the financial crash in 2008 were not compromised by revenue from property advertising, former editor Geraldine Kennedy told the Oireachtas Banking Inquiry.

“The same editorial standards applied in the property supplements as elsewhere in the newspaper,” Ms Kennedy said. “There was no trade-off between editorial and advertising. Advertising features were clearly signposted. Advertisers did not write editorial copy.”

Ms Kennedy said that having recently reviewed editorial policy and the newspaper’s approach to reporting the property boom in the run-up to the banking crisis, she was not sure “what we could have done differently” to “predict the magnitude of the fall”.

“We reported the news forensically. We challenged the consensus and canvassed all views and published them,” she said.

“The media, as always, was reliant on reporting the views of the specialists, be they government, the Central Bank, the regulator, or the profession of economists. Journalists were less well-placed than others to make an accurate assessment.”

Ms Kennedy also noted that The Irish Times was the only newspaper to publish the article in December 2006 by Morgan Kelly, professor of economics in UCD, predicting there would be a property crash with prices falling by between 40 per cent and 60 per cent.

Ms Kennedy, who was editor of The Irish Times between 2002 and 2011, told the committee how in late 2007, the paper complained to the professional bodies of auctioneers and valuers that some estate agents were providing misleading selling prices to its property supplements.

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“The paper took the view that if agents were unwilling to supply accurate information, or if the vendors were reluctant to disclose the true selling price, then it would be damaging to the credibility of the newspaper to carry the results,” she said.

Ms Kennedy said the introduction of the national property register in 2012 was a consequence of this discovery in The Irish Times.

Maeve Donovan, who was managing director at The Irish Times for eight years up to her retirement in 2010, said the company’s business model was funded by a combination of cover price, subscription revenue, print and digital advertising income, and revenue from printing external publications.

“The ratio of advertising to circulation revenue was typically 60/40 on average,” she explained, adding that key sectors for advertising were property, recruitment, and classified and display ads.

Ms Donovan explained how the newspaper is published by The Irish Times Ltd while its controlling shareholder is The Irish Times Trust Ltd. She said that while editorial policy was the responsibility of the board of The Irish Times Ltd, the day-to-day execution was the responsibility of the editor.

As managing director, Ms Donovan was responsible for the performance and development of the business, including responsibility for strategy.

She described property as a “key pillar” of the newspaper’s publishing revenue, and a “driver” of readership.

In the years before the crash, the company sought to balance increasing exposure to property through a range of diverse activities, notably the development of external printing at its plant in Citywest, Co Dublin.

She said the company’s constitution specified that editorial content should be “free of any form of personal, political, commercial or sectoral influence”.

This requirement was “deeply embedded” in the company’s culture, Ms Donovan said, adding that the role of management was to act as a buffer between commercial interests and the editorial content.

Ms Donovan said The Irish Times Ltd took part in two notable property transactions in the years leading up to the financial crash - the purchase of MyHome.ie in 2006, and the sale of its former offices at D’Olier Street/Fleet Street in 2007 for €29.1 million.

In spite of developing several digital platforms for property, including Ireland.com/property, Irishtimesproperty.com and Nicemove.ie, none proved to be “viable competition” for MyHome.ie. “The company‘s intentions turned to growth by acquisition,” she said.

Ms Donovan said MyHome.ie remains a “key strategic asset” of The Irish Times Ltd and “trades profitably”.