Independent News & Media PLC
Independent News & Media PLC
Sales: EUR 1.5 billion (2003)
Stock Exchanges: London Irish New Zealand
Ticker Symbol: INWS
NAIC: 511110 Newspaper Publishers
Independent News & Media PLC is one of the leading newspaper groups in the English-speaking world. Independent publishes more than 200 national and regional publications in Ireland, Australia, New Zealand, the United Kingdom, and South Africa.
Australasia accounted for 44 percent of 2002 sales. Ireland, with 28 percent of sales, was the next largest segment, followed by the United Kingdom (18 percent) and South Africa (10 percent). According to Chairman Sir Anthony O'Reilly, a falloff in the economy of one region was usually offset by growth in another. O'Reilly, former CEO of food giant H.J. Heinz Co., is believed to be Ireland's wealthiest individual.
William Martin Murphy, an Irish businessman who had made a fortune installing Dublin's streetcar system, acquired a number of newspapers in the 1890s. One of these, the Daily Independent and Nation, was relaunched as the Irish Independent in 1904, forming the basis for what would become the Independent Newspapers publishing group.
Independent Newspapers remained family owned for several decades. The Irish Independent was a morning paper; in the 1950s and 1960s more evening, Sunday, and regional publications were added.
International Expansion in the 1970s
Dr. Anthony J.F. (John Francis) O'Reilly was a top-scoring rugby star of the 1950s. After graduating from Dublin's University College, he was appointed chief executive of Bord Bainne, the Irish milk board, at the tender age of 25. There, he developed the tremendously successful Kerrygold brand of butter.
He then headed the Irish Sugar Company and in 1968 went to work for H.J. Heinz Co. In 1979 O'Reilly was the first nonfamily member to become CEO of the American food giant, a position he held for 20 years.
As one source later told the Sunday Telegraph, "Newspapers are much more fascinating than ketchup and beans." O'Reilly began his association with Independent Newspapers on St. Patrick's Day, 1973, through his Columbia investment company.
At the time, Independent employed 1,000 people; its activities were limited to Ireland. O'Reilly already had a vision for expanding the newspaper group into new media and new geographic territories.
Sales reached IR£43.6 million in 1980, producing a pretax profit of IR£3 million. In the 1980s, Independent acquired some British newspapers and took holdings in outdoor advertising companies in Europe and Australia.
The biggest boost to Independent's international stature came in 1988, when Independent acquired a holding in Australia's APN News & Media, then called Provincial Newspapers (Queensland) Ltd. (PNQ). The investment was made possible by the Aussie citizenship of O'Reilly's children (O'Reilly's first wife was Australian)—a new joint venture, Haswell Pty. Ltd., was formed between Independent and a trust fund for the children for the acquisition. Haswell paid News Ltd. A$130 million for its 48 percent stake in PNQ, which it had been mandated to sell by the government.
Diversifying in the 1990s
Independent Newspapers achieved pretax profits of IR£12.5 million on revenues of IR£154.9 million ($256.1 million) in 1990. O'Reilly's vision of expanding Independent into new markets and new media worldwide did not really begin to take shape until the appointment of Liam Healy as chief executive in January 1991. Healy had joined Independent's staff in 1963. O'Reilly had appointed him head of Independent's international division in 1981, where he oversaw the acquisition of APN (Australian Provincial Newspapers).
Independent then focused on diversifying into different media and markets, including outdoor and radio. Down under, APN branched out into radio in a joint venture with Clear Channel Communications. APN also acquired an outdoor advertising business.
There were also a number of high-visibility acquisition offers that did not go through. Independent tried unsuccessfully to acquire Australia's Fairfax newspaper group in 1991 and Britain's Daily and Sunday Express publisher United Newspapers in 1993. United's market capitalization of £1.3 billion was more than four times that of Independent.
In 1994, Independent acquired a 24.99 percent stake in Newspaper Publishing, publisher of a London newspaper also called the Independent. Within a couple of years it had built up its holding to 47 percent, and in 1998 bought out the shares of the Mirror Group, Spanish publisher Prisa, and five dozen other shareholders. Andreas Whittam-Smith had founded the Independent as an up-market paper in 1986. It had yet to turn a sustainable profit, but O'Reilly admitted its value as a prestige asset—it was a well-respected, national publication in Britain—while professing plans to make it profitable.
Independent expanded its holdings into South Africa and Portugal in 1994. It acquired Argus Newspaper Group, the largest newspaper group in South Africa, later renaming it Independent Newspapers Holdings. (O'Reilly had struck up a friendship with future South African President Nelson Mandela while touring the country with the British Lions rugby team.) Independent acquired a 19 percent holding in Jornalgeste, later called Lusomundo Media. The company also acquired a regional newspaper operation around London. A 28 percent stake in New Zealand's largest newspaper, Wilson & Horton, was acquired in 1995. Independent gradually built up its holdings in W&H, achieving full control in 1996.
O'Reilly retired as chief executive of H.J. Heinz Co. in April 1998. He continued to have interests outside Independent Newspapers, having acquired control of venerable crystal and ceramic maker Waterford Wedgwood.
Renamed Independent News & Media PLC in 1999
The name Independent News & Media PLC (INM) was adopted in 1999 to reflect the group's expanding focus. During the year, INM bought a share of iTouch, a wireless portal. O'Reilly was knighted in 2000 for his work relating to Northern Ireland. The Belfast Telegraph, Northern Ireland's leading newspaper, was acquired from Trinity Mirror during the year for UK£295 million.
By this time, INM had global turnover of more than UK£1 billion. It owned the leading papers in Ireland, South Africa, and New Zealand.
"We rise at dawn in Auckland with the New Zealand Herald and continue the day through Australia and the Queensland Times and our 14 other regional titles, our four million radio listeners at nine stations in Australia, through to the Cape Times and South Africa's largest paper, the Star in Johannesburg, through London and finally to Belfast and Dublin—a rolling news room, that through the miracle of the internet and the satellite, allows us to share more than 1,200 articles every week. From the America's Cup in Auckland to the Cricket World Cup in Cape Town, the dynamic and controversial Robert Fisk on the Middle East situation at the Independent in London, or the insightful Maurice Hayes and David McKittrick on the complexities of the ever changing Irish political scene, we are attempting—and I hope succeeding—in focusing world-class resources on making our products more appealing and relevant everywhere.
In all of this, and in the 15 million newspapers and magazines that we publish each and every week, we attempt to underline the impartial, to entertain and to inform, to expose corruption and praise achievement. Mostly we get it right; occasionally we get it wrong; but at all times, we endeavour to be fair, reasonable and independent."
—Sir Anthony O'Reilly, executive chairman
- Irish Independent is launched in Dublin by William Martin Murphy.
- Anthony O'Reilly invests in Independent Newspapers.
- Independent Newspapers and Anthony O'Reilly acquire PNQ—Queensland's largest provincial newspaper group.
- PNQ—renamed APN News & Media Pty.—is listed on the Australian Stock Exchange.
- Liam Healy is appointed chief executive.
- Independent acquires control of the Argus Group—South Africa's largest publishing group.
- Independent acquires control of Wilson & Horton—New Zealand's largest publishing group.
- Full control of London's the Independent is acquired.
- Group is renamed Independent News & Media PLC (INM).
- Anthony O'Reilly is appointed executive chairman; INM acquires Belfast Telegraph, Northern Ireland's largest publisher.
- INM restructures New Zealand operations into APN News & Media, creating a major Australasian media conglomerate (APN is owned 40.7 percent by INM).
- INM restructures worldwide operations and recapitalises balance sheet via noncore asset divestments, layoffs, and a focus on being the "low cost operator."
In 2001, INM increased its shareholding in the Australian media group APN from 40 to 45 percent by selling it Wilson & Horton, the New Zealand-based publisher and radio broadcaster, for $410 million. This nearly doubled APN's size.
Reducing Debt in 2003
Following a period of significant investment and acquisition, INM set about to restructure and recapitalise its balance sheet. The group disposed of its 19.1 percent holding in Portugal's Lusomundo Media for EUR 24 million (UK£17 million) in October 2003, leaving INM to concentrate on English-language titles. INM's regional London papers were sold off a couple of months later for EUR 89 million.
INM ended 2003 with news of a major restructuring, designed to reduce by 5 percent the group's 12,000-strong workforce, and position the group as the "low cost operator" in the industry. The group had spent EUR 1.6 billion on international expansion and upgrading all of its production facilities in the previous decade and was eager to reduce its EUR 1.2 billion (£850 million) debt.
APN News & Media (Australia; 43.7%); Independent Magazines (U.K.); Independent Newspapers (Pty) Limited (South Africa); Independent News and Media Limited (U.K.); Independent Newspapers (Ireland) Limited; Independent Newspapers (Finance) Plc (U.K.); iTouch plc (U.K.; 51.77%); News & Media NZ Limited (27.43%); Newspread Limited; Princes Holdings (50%); Sunday Newspapers Limited; Tribune Newspapers Plc (29.99%).
Associated Newspapers Ltd.; Hollinger International Inc.; News International Ltd.; Trinity Mirror Plc.
Brown, John Murray, "Friends Put Money on O'Reilly's Judgment: The Irish Entrepreneur Has Made Some Spectacular Investments," Financial Times (London), October 26, 2002, p. 15.
——, "Independent's Rights Issue Delivers a Reality Check," Financial Times (London), March 28, 2003, p. 28.
——, "Murdoch and O'Reilly Rivalry Hots Up," Financial Times (London), January 31, 2002, p. 24.
Byrne, Ciar, "Connery Raises Indy's Profile," Guardian (Manchester), March 20, 2003, p. 23.
Cassy, John, "O'Reilly Props Up Independent Group," Guardian (Manchester), March 27, 2003, p. 23.
Gapper, John, "Independent's Hopes Rest with an Irish Solution," Financial Times (London), March 12, 1998, p. 8.
Greenslade, Roy, "A Man of Indie Means," Guardian (Manchester), March 9, 1998, p. 106.
——, "Still Full of Beans," Guardian (Manchester), September 11, 2000, p. 8.
Hobson, Rodney, "Independent News Sells Portuguese Stake for EUR 24M," Independent (London), Bus. Sec., October 14, 2003, p. 22.
"Independent Head Cements Long Aust. Ties," Sydney Morning Herald, June 13, 1988, p. 27.
Jury, Louise, "Connery Joins Board of Independent," Independent, March 20, 2003.
Mac Carthaigh, Sean, "The Quiet Man Behind Success," Irish Times, June 14, 1997, p. 9.
McGrath, Brendan, "Independent May Buy O'Reilly Trust Holding in APN," Irish Times, June 26, 1996, p. 16.
——, "Independent Raises W&H Stake to 44%," Irish Times, December 1, 1995.
Majendie, Paul, "Heinz's O'Reilly Eyes Media in Britain, Australia," Reuters News, April 23, 1993.
Murdoch, Bill, "O'Reilly Welcomed Aboard," Irish Times, February 4, 1995, p. 16.
O'Toole, Fintan, "A Baron of Beanz," Observer, March 8, 1998, p. 20.
"Press Baron O'Reilly Makes Breakthrough," Times (London), Bus. Sec., February 6, 1994.
Price, Christopher, "INL Seeking to Spend Up to £200m on Purchases," Financial Times (London), September 11, 1997, p. 34.
Rees, Jon, "Ireland Newspaper Group's Chairman Looks to Bid Anew for Australian Publisher," Sunday Business (London), November 18, 2001.
——, "Son of Dublin-Based Media Firm's Chair Wants to Be Judged by Work, Not Dad," Daily Mail, February 23, 2003.
Ruddock, Alan, "O'Reilly Fights on for Place Among World's Press Barons," Times (London), November 28, 1993.
"Rugby Star Played to Win," Times (London), February 21, 2003.
Siklos, Richard, "'I Want More of Everything'," Business Week, December 20, 1999, pp. 158+.
Smith, Andreas Whittam, "A Newspaper Is No Ordinary Business, It Is a Trophy Asset; The Founder of the 'Independent' Says the Dream May Be Over but the Future Remains Bright," Independent (London), March 17, 1998, p. 21.
Snoddy, Raymond, "Fighting to Put the Indy Back on Track," Times (London), Bus. Sec., February 21, 2003, p. 32.
Steiner, Rupert, "O'Reilly Steps Out from Father's Shadow," Sunday Times (London), Bus. Sec., April 21, 2002, p. 9.
Stewart, Andrew, "Queensland's New Boy Press Baronet," Business Review Weekly (Australia), November 25, 1988, p. 44.
Warner, Jeremy, "O'Reilly Agrees to Split Chairman and Chief Executive Roles at Independent News & Media," Independent, June 7, 2003.
Weever, Patrick, "The Life of O'Reilly," Sunday Telegraph (London), July 28, 1996, p. 3.
Weir, James, "Radio Jewel Glitters for British, Irish," Dominion (Wellington, New Zealand), March 6, 1996, p. 21.
—Frederick C. Ingram