By Colman Cassidy, Sunday Telegraph, 14 November 1982
The closure of the Sunday Tribune, the Republic of Ireland’s quality Sunday, just one week before its second birthday, is a salutary lesson in bad management. It has been brought down through the losses incurred by its sensationalist tabloid sister paper, the Daily News, which has shut its doors after 15 issues.
At the centre of the debacle is Hugh McLaughlin, whose reputation as the entrepreneur/publisher that boasted he could “pinpoint a hole in the market and fill it”, has been badly shaken by the demise of the two papers. The closures represents the biggest newspaper crash in Irish history.
The peremptory dismissal of 150 employees has called into question the adequacy of Irish company law governing the operation of private companies, and the possibility of a Fraud Squad investigation was raised last week in the Dáil.
McLaughlin has also been taken to task over an alleged commitment he gave which suggested that he had £600,000 of funds available for the launch of the tabloid. It is reckoned that he had spent only 10 per cent of this before making the closure decision. Jim Fitzsimons, a junior Minister at the Department of Industry and Energy, described McLaughlin’s action as “indefensible”. McLaughlin, the Dáil was told, had decided not to commit the remainder of the £600,000 which his solicitors, Walker & Co., had told the unions he was prepared to spend to launch the Daily News.
The High Court has appointed John McStay of Ernst & Whinney as liquidator to wind up the Sunday Tribune Limited, which McLaughlin in an affidavit, asserted has liabilities totalling £3.5 million against assets of £750,000.
These liabilities include the start-up costs of the Daily News and, indeed, all outstanding expenses for both papers, including £90,000 in unpaid wages and £300,000 due to the Revenue Commissioners for PAYE and VAT.
Some of the company’s assets, including the two titles, were transferred to a new company, the Daily News Limited. This company is to be offered to any new purchaser free of encumbrances and with very real tax advantages: liquidator McStay says the losses could be transferred to give the new owner of the titles a tax honeymoon.
But, apparently, McLaughlin wanted to sell only 75 per cent and retains a holding of 25 per cent.
The Daily News, Ireland’s first new national daily in 30 years, made only 15 appearances before McLaughlin “suspended publication” of both papers on October 2nd. That was a Monday, a bank holiday when no papers were published and gave Daily News staff their their first break in a hectic fortnight.
There were three more days to go before they were due to collect their first pay cheques. McLaughlin broke the news to Daily News journalists that evening, just as Tuesday’s paper was being put to bed.
Because of difficult financial and trading conditions it was necessary, he said, to suspend publication of both papers for a few days, to enable negotiations with an “interested party” to continue. The “interested party” turned out to be Robert Maxwell, head of British Printing Communications Corporation. But Maxwell’s interest was fleeting. McLaughlin’s continued presence as a minority shareholder did not appeal, despite any tax advantages this might have.
McLaughlin blamed losses at the Sunday Tribune, said to be running at around £20,000 a week, and the disappointing performance of the Daily News, which was losing £100,000 a week – and selling only around 50,000 copies compared to the 100,000 a day that had been projected. Advertising support for it was very poor.
He justified his launching of the new title on the need to save the Sunday Tribune, but it was a good excuse for embarking on what had been a private ambition for years – to put the English tabloids, such as the Mirror, Sun and Star, to rout.
He had proved already it could be done by setting up the Sunday World, a downmarket tabloid, that within a short time, had far outstripped the circulation figures of the other Irish Sundays.
In November 1980, McLaughlin, who is 59, joined forced with John Mulcahy, proprietor/editor of Hibernia, the controversial weekly review, and launched the Sunday Tribune. It established itself as a quality paper within a year and made heavy inroads on the circulation of the Sunday Press and Sunday Independent, the two established Irish Sunday broadsheets,
The Sunday Tribune demise is further highlighted in the latest Joint National Media Research report (the advertisers’ bible). This shows that the paper had an adult readership of 403,000, indicating that it had knocked spots off the other Irish Sundays – even the redoubtable Sunday World circulation has fallen.
Even Sunday Tribune critics concede that credit for this rests firmly with the editorial team, led initially by John Mulcahy and later, Conor Brady, who joined the paper from The Irish Times.
The Sunday Tribune start-up costs were considerable. McLaughlin is reputed to have put in £950,000 of his own money before seeking help from Jefferson Smurfit, the packaging group which had a majority stake. For all concerned the Smurfit entrée to national newspaper publishing proved to be a class encounter of the worst kind.
Eventually Smurfit washed its hands of the entire enterprise by getting McLaughlin to surrender his printing press – but not the building in which it was housed – in return for its stake in the Sunday Tribune Limited. Smurfit continued to print the paper and later the Daily News, up to the time it received a post-dated cheque, just before suspension of publication.
McLaughlin had appeared to be back in the driving seat, initially. Almost at once he announced plans to set up a popular daily, which with economies of scale, would make the Sunday Tribune profitable and achieve the type of publishing breakthrough he had envisaged for years.
Basically he saw a paper that would force out the English tabloids, in particular the Daily Mirror, which has an Irish edition, and secure a high readership of around 100,000 from the start that would force advertisers to take space.
It didn’t happen and he gave up. Now two teams of journalists are involved in talks with the liquidator and possible suitors.