Mr. Tom Murphy:

On foot of a request from the Joint Committee of Inquiry into the Banking Crisis in Ireland the Irish Examinerhas nominated me to appear before the committee to discuss item 2, business model and sources of revenue, including from the real estate sector 2002-07. I was the CEO of the Irish Examinerfrom October 2002 to June 2010 when I was appointed group chief executive of the then holding company of the Irish Examiner, Thomas Crosbie Holdings Limited. I was not the CEO of the Irish Examinerfor the period from July 2010 until October 2011 at which stage I resumed that role in addition to my other responsibilities.

As the committee will be aware, the Irish Examineris a daily morning, mid-market newspaper, produced six days per week which circulates in broadsheet format in the Republic of Ireland generally but its core area of circulation is in the Cork and Munster region particularly. In addition, the Irish Examinerhas an established increasing online presence now but in the period 2002 to 2007 all of this was in its infancy and, as such, was being established. The Irish Examinerhad no online property business in that period but had associated companies under the then parent company Thomas Crosbie Holdings Limited, called Recruit Ireland Limited, a recruitment support company, and breakingnews.ie, an online news publisher and contents indicator to third parties. Thomas Crosbie Holdings Limited also had an online motoring site, called motornet.

I wish to address the areas on which the committee has asked me to comment, namely, business model and sources of revenue. As CEO of the Irish ExaminerI have the task and pleasure of leading a great team of people who are responsible for producing, publishing and administering the best possible newspaper we can six days per week, 52 weeks per year. I had eight direct senior management reportees at the time for the following role-functions: advertising sales, circulation sales, distribution and administration, editorial, finance, human resources, marketing, and production and IT.

Mr. Tim Vaughan has been the editor of the Irish Examinersince 2001 and is a highly regarded and experienced journalist and editor. Mr. Vaughan has responsibility for all editorial matters pertaining to the Irish Examinerand his brief is to continue, as his predecessors did, to produce the best possible newspaper he can for our readers. The brief of the editor and the board continues to be to publish as he views appropriate without fear or favour. While he must be aware of influencers, given the nature of his role he has to remain steadfastly independent of such influences for purposes of editing the newspaper. This has been the philosophy of the Crosbie family as handed down from generation to generation and remains the ethos of the newspaper today.

The second item is the importance of property related revenues within the overall revenue mix. In common with most, if not all, quality newspapers, the Irish Examinerhas two main income streams, the first from circulation sales in the form of cover price and the second from advertising sales. Circulation revenue is the mainstay of the revenue base but increasingly advertising revenue has become and remains vital, more particularly since 2007 when newspaper circulation volumes declined. The ratio of advertising to circulation revenue in the period averaged 60:40.

In any newspaper the key advertising sectors are to a greater or lesser extent property, recruitment, classifieds and run of paper. Run of paper advertising typically is the larger display type advertisements often used by retailers, telecommunications companies and motor dealers et al.Increasingly today digital advertising revenues are becoming more important but in the reference period they were insignificant. The Irish Examiner published a commercial section every Thursday within the newspaper for many years, including the period 2002 to 2007. It also published a residential property section from the mid-1980s, which moved to a stand-alone publication on a Saturday from the mid-1990s, given the high level of home ownership in Ireland, relative to the rest of Europe, and the ever-increasing interest in property, furniture and interiors that the Irish population displays. Advertising revenue is of vital importance to fund the current 300 jobs in the Irish Examiner and the continuing role of the Irish Examinerand the wider industry, so sales from all sectors is a critical success factor for newspapers.

Property advertising in the Irish Examineris in relative terms as important today as it was at the height of the Celtic tiger but so are recruitment revenues, retail sector revenues and all advertising sector sales. However, in the period 2002 to 2007 property advertising was consistent and strong. Having said that, it reflected only a small but important percentage of our overall revenues in the period. While it represented a greater percentage of our advertising revenues, internally we accorded it no greater importance over any of our other advertising sales sectors or over our circulation revenues. To illustrate the point, we tend to allocate the same headcount and editorial space to property in our publications today in 2015, as we did at the height of the market in 2007.

The third point is the engagement in property related commercial activity. In 2006 the Irish Examinermoved from Academy Street in Cork to new rented headquarters in Lapp's Quay, Cork. The Academy Street building housed a 35-year old printing press that was no longer fit for purpose. This printing press had no commercial utility or value. It was therefore decided to sell this building, leaving the old printing press in situ for economic reasons and to move to a more modern office block in the city. Printing was then outsourced. It is also worth remembering that work practices were changing in the industry and, in particular, that it had become increasingly difficult to operate the type of scaled printing and distribution business we had from the premises in the centre of Cork city. The Academy Street building which was owned by the company for more than 150 years was sold for approximately €40 million. This transaction was not unique and it followed a similar pattern of other newspapers, both here and abroad, who moved from city centre locations to new locations and-or who outsourced their printing.

In a separate property transaction around this time another city centre premises owned by the company, the Irish Examiner, which was used in the business as a parking garage and store for newsprint was sold for approximately €2 million. These are the only property related transactions of any significance that I am aware of that the Irish Examinerparticipated in during this period. I was not involved in any way in these decisions which I understand were based on commercial considerations rather than on speculation in the property market. These matters were negotiated at a holding company level at Thomas Crosbie Holdings Limited at the time.

The fourth point is the relationship between the editorial and sales functions. There is a clear distinction between editorial and the sales functions of the Irish Examineras referred to in section 1 and as fostered at management level by the management team and myself. The concept of editorial independence is fostered by everybody in the company and is well understood in our marketplace. However, editors today must have a commercial sharpness and awareness to ensure the best opportunity for their newspapers which is why they can prosper. By way of example, this is practised in the Irish Examinerby: the editor ensuring that there is timely and adequate communication, where relevant, to the circulation and advertising managers of his planned editorial activities to ensure there is the best possible opportunity to maximise the sale of newspapers and, where relevant and appropriate, the sale of advertising; and similar communications with the marketing managers so that appropriate in-paper signposting and, where appropriate, advertising slots can be purchased on radio and television. While the commercial side of the house will never dictate editorial policy we, like most newspapers worldwide, produce commercial supplements and features which are advertising led and are clearly labelled as such to ensure that no confusion arises in relation to their origins.

We have also published specifically themed editorial booklets covering topics as divergent as suicide, infertility and eating disorders. While these are open to sponsorship and advertising, editorial content is sacrosanct and cannot be influenced. The suicide booklet was produced without advertising or sponsorship at a financial loss but we published it in order to provide a public service as neither the HSE nor any other State agency had published anything like it despite the huge numbers dying by suicide.