INDEPENDENT Newspapers is the biggest newspaper group in Ireland. It owns the Independent, Sunday Independent, Evening Herald and the Sunday World and is a 50 per cent owner in The Star.
It also owns almost a dozen regional titles, including the Kerryman, and it has a 50 per cent interest in Princes Holdings, which owns 17 licences to supply cable television.
The group's interests in radio, newspapers and advertising span the globe and it owns or has shares in newspapers in Britain, (including the Independent and regional newspapers), Portugal, New Zealand, South Africa and Australia.
Last year the group's profits rose from £50 million to £73.5 million, well ahead of market expectations. The company is the first to admit that Ireland remains a key profit centre.
Chief executive Liam Healy said at the group's a.g.m. in Dublin last month that Ireland was still one of its strongest performing sectors and it contributed £34.5 million to operating profits in 1996. Tony O'Reilly said this year that its New Zealand operation would be its "biggest single profit centre".
However, in the annual report and at the a.g.m. Dr O'Reilly warned that the row over illegal cable operators was "very much an issue of compensation."
Seven years ago Princes Holdings was granted 17 "exclusive licences" to supply cable services for certain regions in the State. With its international partners, Telecommunications Corporation and UIH of Colorado, Independent invested £65 million to develop cable television in Ireland.
Princes Holdings claims to have lost £21 million to date because the various governments did not enforce the exclusive licences. Dr O'Reilly and Mr Healy said at the a.g.m. that their US partners were keen on pursuing the "legal avenue". A clearly annoyed Dr O'Reilly said Ireland could not afford to break its word and other countries would see that there had been "a castiron agreement that was no longer castiron".
The closure of the Irish Press group in May 1995 was estimated to add £4 to £5 million to Independent's revenues, according to NCB stockbrokers, included an added £1.1 million in operating profit for the Irish Independent, and £1.2 million for the Evening Herald.
It was the Independent's initial investment in the Press - five months before it closed that brought it into sharp conflict with the Government. The Independent, which still has a £1 million loan secured on the three defunct Irish Press titles loaned the group £2 million and invested £1.125 million in return for a 24.9 per cent stake in December 1994.
The Competition Authority ruled that it was an abuse of a dominant position and recommended that Independent be forced to divest its stake. It said the Independent's involvement was to prevent other potential investors from taking over the Irish Press, investors who might compete more vigorously in the marketplace.
The Minister for Enterprise and Employment, Mr Bruton, refused to act on the report. Dr O'Reilly threatened to oppose any moves to get his group to divest the stake. The Independent group also rejected the authority's assertions on dominance.
In the end, events overtook all parties and the Press group's operating company, Irish Press Newspapers, went into liquidation, with debts approaching £20 million.
The Competition Authority also recommended that Independent's 29.9 per cent shareholding in Tribune Newspapers, which publishes the Sunday Tribune, should be investigated. The authority said it could also amount to an abuse of a dominant position.
Independent has been advancing loans to the Tribune on a regular basis for several years and the paper has still not turned a profit. Its accumulated debts are well over £6 million.