Ms Maeve Donovan:

I thank the committee for the opportunity to discuss the role of the media in the period to which the inquiry refers.

I retired from The Irish Timesin 2010 following 33 years’ service in the company, the final eight years as managing director. As my colleague Geraldine Kennedy addressed the newspaper’s editorial policy in the period in question, I will attempt to answer the committee’s questions on the company, its business model, property-related commercial activity and the editorial-commercial relationship.

The Irish Timesnewspaper is published by The Irish Times Limited and its controlling shareholder is The Irish Times Trust Limited. The Irish Times Limited exists to publish The Irish Times. It is prohibited from providing dividends to its shareholders. Accordingly, all profits are retained in the company. The Irish Times Trust Limited has certain powers under the memorandum and articles to appoint and remove directors of The Irish Times Limited, to call general meetings and the control of significant acquisitions and disposals. The primary role of the trust is to appoint a board which it believes will ensure the company is well run and adheres to its core objects. Thereafter, the trust leaves the board to get on with it. The board has the responsibility of adhering to the main object concerning the quality and independence of The Irish Times.The trust acts a second guarantor or long stop, a responsibility grounded in the trust as a whole.

Editorial policy at The Irish Timesis the responsibility of the board of The Irish Times Limited. In practical terms, day-to-day policy is executed by the editor and team in the context of the memorandum and articles of the company. The core requirement is trust, integrity and balance. As managing director, I had no input into day to day editorial decisions. The managing director is, however, responsible for the overall viability, performance and development of the business, including responsibility for strategy.

Regarding the business model and sources of revenue 2002 to 2007, The Irish Timesbusiness model is a traditional one in the quality newspaper sector in Europe and elsewhere. News gathering and all ancillary activities are funded by a combination of cover price and newspaper sales revenue, subscription revenue and advertising revenue, both print and digital. During the inquiry’s reference period, growing revenues derived from printing external publications. The latter commenced in 2002 with the commissioning of the company’s new printing plant at Citywest. The ratio of advertising to circulation revenue was typically 60:40 on average. This moved up and down depending on the state of the economy. Key advertising sectors, particularly for quality newspaper titles, are property, recruitment, general classifieds including motors and display or run-of-paper advertising.

The classifieds include cars and small ads in various categories. The run-of-paper advertising is largely about retail, food, financial services and so on.

During the reference period, the steady advance of digital media, and hence digital advertising, was a key strategic challenge for the company. This remains the case for The Irish Timesand indeed all print media, as the pace of digital adoption continues to increase.

On the importance of property-related revenues to the overall revenue mix, property is a key pillar of the newspaper’s publishing revenue. The commercial property supplement in Wednesday’s newspaper and the residential property supplement on Thursday are important to readers as well as advertisers. The readers of The Irish Timeshave a strong interest in both residential and commercial property. They are buyers for both categories and many are also property investors. In addition to the dedicated supplements, The Irish Timesalso provides extensive coverage on homes, interiors and related lifestyle content. In an overall context, therefore, property is a key driver of readership both print and online for The Irish Times. From an advertising perspective, The Irish Times's audience is of particular interest to companies trading in the sector. This has been the case for decades and certainly through my entire period at the newspaper. The company’s acknowledged success in the property advertising market has attracted new domestic and UK players into this market and into the sector.

When I came to work for The Irish Timesin 1977, it was the market leader in the property sector. That position was maintained through the 1980s and 1990s, through the reference period, and it continues today. Through the decades there have been new market entrants in both print and digital formats. The market is highly competitive and highly diversified. Globally, the long-standing success of newspapers in the pillar categories of property and recruitment is what gave rise, in large part, to the arrival of standalone digital websites and the resulting disruption of the newspaper’s commercial model.

During the reference period, the company sought to balance increasing exposure to the property sector through a range of diverse activities. The most notable of these was the development of strong external printing revenues from the Citywest plant.

The relationship between the editorial and commercial functions is clearly drawn in the Memorandum and Articles of Association of the Irish Times Trust. It specifies that editorial content in the newspaper shall be "free from any form of personal or party political, commercial religious or other sectional control". That separation is carefully maintained under the stewardship of both the trust and the board. This requirement of the company is deeply embedded in the company's culture. It is heavily emphasised from the induction of new staff onwards, and it is fundamental to the way in which the company operates.

At a macro level, everybody in the organisation understands the importance of advertising to the enterprise. At the micro level, all staff, both editorial and commercial, are aware of the necessity of maintaining the separation of editorial and commercial activities. Customers of the business are also very much aware of this. This does not mean that clients do not sometimes complain, but the role of the business team, especially its management, is to act as a buffer between commercial interests and the producers of editorial content. This practice is regarded within the company as a key asset, and the independence of the newspaper is emphatically stressed when the newspaper is marketed to clients. It is one of the key differentiators of The Irish Timeswithin the Irish newspaper sector.

On engagement in property-related commercial activity, during the reference period The Irish Timesengaged in two notable transactions. The first was the purchase of the website myhome.ie. As early as the late 1990s, The Irish Timessought to secure its position in key markets as revenue started to migrate from print to digital media. Standalone classified sites had started to proliferate, particularly in Europe and the USA. Obtaining a market-leading property site in the sector became a key strategic objective for the company and, hence, for the management team. Along the way, the company developed several digital iterations in the property sector. We had ireland.com/property, and owned the ireland.com portal at that time. We also had irishtimesproperty.comand nicemove.ie. Despite considerable investment and marketing activity, none of these sites proved to be viable competition for myhome.ie, which was the market leader and had grown exponentially from its launch in 2000. Therefore, our company’s intentions turned to growth by acquisition. The myhome.iebusiness became available for sale in 2006. The Irish Times Limited retained NCB as an adviser for the bidding process. There was a competitive process with at least two other bidders involved. The acquisition was unanimously approved by the board of The Irish Times Limited and the transaction was approved by the shareholder, the Irish Times Trust. The website became part of the Irish Times Group and today it remains a key strategic asset of The Irish Timesand trades profitably. The Irish Times has a strong position in both print and digital media in a sector which has substantial revenue streams, which will help to protect the title into the future. Successfully making the migration from print to digital is essential to the survival of The Irish Timesand indeed to all print media.

The second transaction was the sale of the D’Olier Street and Fleet Street premises and the leasing of the Irish Times building in Tara Street from Dublin City Council. During 2005 and 2006, the company had been examining changing work practices and creating an appropriate environment for a changing business. Various options were examined, including extensive remodelling of its listed buildings in D’Olier Street. The cost of redevelopment was prohibitive and inevitably required compromising on the space requirements. Therefore, the decision was made to seek modern accommodation within the city centre, proximate to key sites such as the Dáil. A suitable property was identified and the D’Olier Street and Fleet Street buildings were sold in 2007. The company transferred operations to Liffey House in Tara Street, a facility which was much more suitable for the development of the newspaper and a range of digital business interests. The price achieved, €29.1 million, was considerably higher than the company had anticipated.