Shadow of Denis O’Brien looms over new media merger guidelines

Alex White will decide if a media merger is in the public interest

The initial clash between Pat Rabbitte and Richard Bruton took place against the backdrop of the battle in the boardroom of INM, which saw Denis O’Brien triumph over the O’Reilly family. Photograph: Dara Mac Dónaill

The initial clash between Pat Rabbitte and Richard Bruton took place against the backdrop of the battle in the boardroom of INM, which saw Denis O’Brien triumph over the O’Reilly family. Photograph: Dara Mac Dónaill

 

While the new guidelines on media mergers do not mention any person or individual companies by name, the shadow of Denis O’Brien looms large.

The new media merger legislation and accompanying guidelines have been a long time coming and follow a tug-of-war between the Department of Communications and the Department of Jobs, Enterprise and Innovation, under whose remit mergers initially fell.

The initial clash between Pat Rabbitte and Richard Bruton took place against the backdrop of the battle in the boardroom of Independent News and Media (INM), which saw Denis O’Brien triumph over the O’Reilly family.

At Government level, the Department of Communications took charge of the new dual-notification system for media mergers at the end of October. Alex White, who took over from Rabbitte in communications, will decide if a media merger is in the public interest, while the Competition and Consumer Protection Commission will determine if a deal can proceed on competition grounds.

Control

At the height of the O’Reilly-O’Brien tussle for control of INM, many in Government felt it would be wise to steer clear and allow things settle down at the biggest newspaper group in the country.

That has happened, and a restructured INM with O’Brien as majority shareholder with a 29.9 per cent has emerged. O’Brien’s Communicorp group houses Today FM, Newstalk and other radio ventures. Newstalk also operates syndicated news for local radio stations.

Recently, the National Union of Journalists called on White to “call a halt” to what it saw as O’Brien’s threat to media diversity. That plea from NUJ secretary Seamus Dooley came after Newstalk secured a deal to provide news to more stations, making it the largest supplier of radio news in Ireland.

Critics will argue White is closing the stable door after the horse has bolted but the draft guidelines appear to outline criteria which could limit room for manoeuvre.

The most obvious is setting a threshold of ownership judged to constitute “significant interest” – which means a person or business “has sufficient voting, financial or ownership strength within the relevant media business or media businesses to influence directly or indirectly, to an appreciable extent, the direction or policy of the media business or media businesses with regard in particular to news, current affairs or cultural content”.

Plurality of ownership

A stake of between 10 and 19 per cent “may” constitute a significant interest, while 20 per cent or higher “will generally constitute a significant interest”. Plurality of ownership is also a dominant feature in the draft document.

In an interview with the Sunday Business Post this year, O’Brien said there had to be co-operation across the media. “In Ireland, there might eventually be only one or two newspapers . . . There are a lot of management teams in media who don’t see any way of co-operating and, to be honest, they are the cows on the line.

“ . . . There has to be pollination between online radio and TV and newspapers. I was up with a business in Canada last week, Rogers, and they have a massive network across all platforms, and whatever business they have is cross-promoted across everything else. They are in radio, television, cable TV, mobiles . . . When I told one of their main guys about the restrictions in Ireland, the guy fell off the chair laughing. He said: ‘You gotta be kidding me, that is Stone Age stuff.’ That is completely the antithesis of where the world is moving to.”

The guidelines say “higher levels of consolidation of management structure . . . may adversely affect media pluralism”. It is not hard to imagine them being challenged by O’Brien or someone else.

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