It hasn't gone away, you know. The boardroom tension at Independent News and Media, which erupted last year over an aborted proposal to buy Denis O'Brien's Newstalk radio station, is still there bubbling beneath the surface.
Bubbles always pop, eventually. It’s basic physics – you simply need enough force to break the surface tension. How long will it be until those INM tensions breach the surface once again?
As revealed in this newspaper in November – and subsequently acknowledged by INM – the chief executive Robert Pitt fell out with Leslie Buckley, the INM chairman and staunch O'Brien ally, over how much to bid for Newstalk.
As well as being the chairman’s close associate, O’Brien is also the biggest shareholder at INM. Any bigger and he’d have to make an offer for the whole damn thing. With the proposed Newstalk-to-INM deal, the billionaire didn’t simply have “skin in the game”. He had it on both halves of the pitch.
The latest word is that Buckley and Pitt have yet to patch things up and they most certainly have not forgotten their row. In case you have, here’s a recap . . .
The spark had gone
Pitt didn't think Newstalk was worth as much as O'Brien's Communicorp sought. He commissioned a valuation that threw up a far lower number. He and Buckley rowed, Pitt complained to the board, and the proposed deal died. Pitt's continuance as chief executive was brought into question over the scrap.
Pitt and Buckley put on a sublimely awkward public show of unity weeks later at a shareholders meeting. Sitting side-by-side, they exchanged pleasantries. But it was clear the spark had gone. It’s over, dear, so when do we tell the kids?
To date, they have chugged along.
The issue was thrust back in the spotlight on Tuesday when Pitt appeared before an Oireachtas committee hearing on media ownership and INM’s planned buyout of the Celtic Media regional publishing group.
After prompting from the National Union of Journalists secretary, Séamus Dooley, Pitt was asked by Greens leader Eamon Ryan about the "major dispute" with his chairman over the proposed price tag for Newstalk.
The first thing to note is that Buckley wasn’t sitting there beside his chief executive to shed light on the issue. The invite to appear before the committee was addressed, first and foremost, to Buckley “or his nominees”. Only Pitt and Gerry Lennon attended from INM. No more public shows of unity, then.
When The Irish Times asked why Buckley chose not to also attend the committee hearing, the company replied: "Based on the topic under discussion, the appropriate executives attended on behalf of INM."
Buckley is O’Brien’s representative on Earth and this was a hearing to discuss media plurality. The huge influence of the most powerful media owner in the State was the pall above the room. Aside from the man himself, it is hard to think of anyone more appropriate to discuss this matter than Buckley.
Genial and forgiving
Pitt’s response to Ryan’s question effectively confirmed all that we know about the Newstalk row: “There were different opinions as to the value that could be attributed to an asset like that. We came to the conclusion that we could not reach agreement.”
Which means they still disagree. Pitt was careful to tell the committee, twice, that the original approach came from Communicorp. In other words, it wasn’t his idea – it came from the company that is wholly owned by O’Brien.
“We are no longer looking at radio assets in Ireland,” said Pitt, somewhat pointedly. Does that slam the door shut on any Newstalk-INM deal? It would appear to, so long as Pitt is in charge. But how much longer will that be?
Quite frankly, it is a minor miracle he has remained in place this long after such an extraordinary fallout with Buckley.
The INM chairman can be genial and forgiving. I know. He once let me away with it after I left him waiting at a Cork hotel for 90 minutes for an interview; that pesky M8 turnoff is blink-and-you-miss-it when the car stereo is blaring.
But he isn’t known for a love of contrarian views. Pitt must consider himself to be in a very strong position. We also know that the INM board under Buckley is loath to make large payoffs to departing CEOs. Just ask Gavin O’Reilly.
So, what of those competing valuations for Newstalk? Some of the numbers speculated at the time were real whizzpoppers: €8 million, €20 million, and astonishingly, €40 million.
We will probably never know exactly what figures were put forward. Towards the end of last year, Newstalk signed a new 10-year licence agreement with the Broadcasting Authority of Ireland. The application process was fast-tracked because nobody else applied for it. That’s how much the rest of the market thought the business opportunity was worth.
Under BAI rules, the authority “generally looks unfavourably” on ownership changes within the first two years of a licence award, although it may show some flexibility if it is within two years of a renewal.
If there was to be a smooth sale of Newstalk to INM, last year was the time to do it. Pitt has moved on. Will Buckley?
Footnotes . . .
"Make mine a double," said the Wall Street Journal this week, as it examined the boost a strong dollar has given to imports into the US, including Irish whiskey. The WSJ noted Irish whiskey sales in the US jumped 16 per cent last year.
Currency aside, whiskey has certainly benefitted from a structural change in consumer tastes. For years, brown spirits were too traditional and strong in taste for younger drinkers. US bartenders also preferred to mix cocktails with a base of white spirits, such as vodka or gin.
But in recent years, along with craft beers and big beards, brown spirits have come full circle. The “old-fashioned” (whiskey, bitters, ice, fruit and sugar syrup) is, well, back in fashion with cultured drinkers.
This is a boon to whiskey producers, especially those with an eye for exports. New Irish brands are popping up all over the place.
US president Donald Trump has previously said the strong dollar is "killing" the US economy. Reports in recent days mocked him for not knowing what effect it really has: he reportedly rang an adviser at 3am recently to ask.
But he has said enough in the past to suggest he would prefer if it were weaker to boost exports and hinder imports. “America first, America first.”
If the dollar does slide appreciably under Trump, we’ll soon see just how resilient this boom in Irish whiskey exports is.
Meanwhile, the WSJ quoted Conor Hyde of Hyde Whiskey in Cork, who said the currency "makes a big difference".
He is a canny marketer. To sell whiskey in the US, you need a story of heritage. Hyde's website refers to Ireland's first president, Douglas Hyde, although it doesn't draw a direct link between him and the company.
Douglas Hyde was born in Roscommon, the son of a rector from east Cork. Hyde Whiskey is made by a family descended from a long line of vintners in west Cork. Perhaps they are distantly related, or could that be an “alternative fact”?
Good luck to them either way.
Accounts just filed for Cafe Sol Holdings, for the year to the end of last March, only capture a little over four months of the coffee chain's operation under the ownership of Dunnes Stores, which bought it in November 2015.
The accounts don’t consolidate the operations of its four operating subsidiaries, but they show that three of them made profits totalling €550,000 while the fourth made a loss of €40,000.
That's not a bad return from total net assets of a bit over €1.7 million. Presumably Dunnes boss Margaret Heffernan paid a decent premium on that to gain control of the brand.
But you still have to hand it to her. She can always sniff out a bargain.
