Shareholders grapple with news network closure

Michael Hedges October 4, 2009 (follow on Twitter)

Tight economics forces broadcasters to squeeze everything and everybody. What once might have been advantageous synergy quickly becomes opportunity for competition. News is a business, too.

Irish broadcaster UTV moved quickly to fill a news void created by the closure of Independent Network News (INN). An email to local radio managers from UTV Radio Ireland managing director Rowan McManamy offered (October 2) a new service to “replicate many of the good aspects of the INN service but will critically remove the financial risk from subscribing stations,” reported the IrishIndependent.  Another Irish broadcaster, Communicorp, is believed to be contemplating a similar offering.

Citing “unsustainable losses,” John O’Connor, CEO of Independent Network News (INN), said (October 1) the radio news agency will close at the end of October. INN has provided Ireland’s private sector broadcasters with national and international news, scheduled newscasts and copy. INN has supported itself by selling advertising, which has suffered declines over the last two years.

“This is a particularly arduous and sad moment for our skilled and dedicated journalistic team at INN,” said O’Connor in a statement (October 1). “Their hard work and commitment has been the cornerstone of INN's achievements over the past twelve years and we thank them for their support and effort throughout.”

INN was formed in 1997 by independent commercial broadcasters as a radio news provider. Over the years it expanded into multi-media and sports content. The company employs 16.

The news agency was created to replace competing services; Network Radio News, owned by FM104, and Ireland Radio News (IRN), owned by 98FM. UTV is the largest INN shareholder (40%). Radio 2000 (Communicorp) and Radio Kerry hold 16% and 10% stakes, respectively, with other broadcasters dividing the rest. Current year losses, reported by the Irish Times (October 2), are about €1 million.  Shareholders will be forced to divide up the losses plus costs of winding down the company.

UTV Radio Ireland and Communicorp are Ireland’s biggest private sector radio broadcasters. Both have their own ad sales-houses, likely at the heart of INN’s closure. Sales-house co-operative Independent Radio Sales (IRS) has sold ads for INN, in competition with UTV Radio Solutions. Public broadcaster RTE also sells radio advertising.

INN was intended to be a self-sufficient service provider. But with ad spending in Ireland tumbling stress on the company has been significant, competition for advertising and station inventory growing. First quarter 2009 radio ad revenues were 18% lower than the same period in 2008, though print and television ad spending fell harder. Last year radio station i102-104 dropped INN’s service for news feeds from Newstalk, owned by Communicorp.

License rules for private sector radio broadcasters include substantial news and public affairs requirements. It’s possible the Irish regulator BCI (Broadcasting Commission of Ireland) might have a word or two about INN’s closure and any possible successors.