The Broadcasting Authority of Ireland (“BAI”) has today, 26th July 2012, outlined its position regarding the media interests of Mr. Denis O’Brien in the context of the BAI’s Ownership and Control Policy (2012) (“Policy”) pursuant to the BAI’s obligations under the Broadcasting Act 2009 (“2009 Act”).
Mr. O’Brien’s company Communicorp controls, and/or has substantial interests in, six independent radio services in Ireland and pursuant to these contracts, Communicorp informed the Authority of changes to the media interests which are required to be shown in the Clause 3.2 Statement of the contract for each radio service.
Mr. O’Brien’s interests in Independent News and Media (“IN&M”) are relevant to the Authority in the context of its statutory obligation to consider “the desirability of allowing any person, or group of persons, to have control of, or substantial interests in, an undue amount of communications media” in an area. In this regard, the Authority was obliged to consider the changes in Mr. O’Brien’s interests in IN&M to determine whether the changes amounted to “substantial interest” or “control” as those terms are defined in the Policy.
At its meeting on 23rd July 2012 the Authority determined that Mr. O’Brien does not control IN&M. Rather he has a substantial interest in the Company, as that term is defined in the Policy. In this regard, the Authority was not obliged to review Mr. O’Brien’s interests in the context of an undue amount of communications media.
The Authority had regard to a number of factors in reaching this decision. This included the Authority noting that since this matter was considered by the Broadcasting Commission of Ireland in 2009 Mr. O’Brien has increased his holding of shares in the Company and is now its largest shareholder. There have been significant changes in the management of IN&M and in the composition of its board of directors, and the role which members of the O’Reilly family have played in directing its affairs has greatly diminished. The Authority also noted that:
- a special resolution cannot be carried at a meeting of the shareholders of INM if Mr O’Brien votes against it;
- he has not reached the 30% threshold at which he would be obliged to make a bid for the remaining shares of the Company;
- he does not own shares which give him more than 50% of the voting rights exercisable at meetings of IN&M’s shareholders.
- Mr O’Brien may nominate three directors to the board of IN&M.
In its deliberations, the Authority considered it noteworthy that Mr O’Brien’s interest in IN&M has been enhanced, that the situation regarding the Company is fluid and that it is intended that further appointments be made to its board of directors. Communicorp has been requested to ensure that it keeps the Authority fully informed of all developments in this regard.
Media Queries to:
NOTES FOR EDITORS
The Broadcasting Act 2009 requires that the BAI endeavours to ensure the provision of open and pluralistic broadcasting services and the promotion of diversity in control of the more influential commercial and community broadcasting services.
Sections 66(2)(i) and 137(2)(i) of the 2009 Act require the BAI to have regard to: “the desirability of allowing any person, or group of persons, to have control of, or substantial interests in, an undue amount of the communications media” in a specified area. These sections relate to commercial radio services (Section 66) and commercial multiplex operators (Section 137). Communications media is defined in the Act and includes broadcasting services, broadcasting services platforms and newspapers or periodicals consisting substantially of news and comment on current affairs.
In April of this year the BAI published its Ownership and Control Policy 2012. The policy had been updated to reflect the legislative provisions, the content of the BAI Strategy Statement 2011-2013, which identified that the maintenance of plurality of ownership, content and viewpoint as a central element of the Authority’s vision on behalf of the public and the outcomes of a public consultation on the BAI Broadcasting Services Strategy which was undertaken in the final quarter of 2011.
A full copy of Ownership and Control Policy 2012 is available at the following link:
Among the key definitions set out in the BAI Ownership and Control Policy 2012 are:
“Control“ – is in a position proprietarily, financially or in terms of voting rights to determine or direct the policy of the company, with regard in particular to programme output, that is, sourcing, production, supply or delivery to the audience.
“Substantial interests“ – has sufficient proprietary, financial or voting strength within a relevant company or companies to be able to influence directly or indirectly to an appreciable extent the strategic direction or policy (which shall include editorial policy) of the company (companies), with regard in particular to programme output, that is, sourcing, production, supply or delivery to the audience.
Communicorp currently controls Today FM, Newstalk, Spin 103.8 and 98FM and has a substantial interest in Spin South West and Phantom FM.