Irish Times Buying Into Property Means What For Newspapers
Posted on July 31, 2006
Filed Under What's New, For Argument's Sake |
The fact that the Irish Times paid 40 million Euro for online property site myhome.ie at the peak of a property bubble in Ireland is surprising until you take into account that the wildly successful Guardian Media group was also a bidder.
First let’s go behind the deal. Property buyers in Ireland are currently paying around five times more for their properties than they were six years ago. The market is driven by tax concessions which allow developers and purcashers tax relief on certain categories of building. That’s led to steep price increase across the country.
Add to this mix, increasing interest rates, increasing home fuel prices, and the inflationary pressures of rising oil prices and you can already see the Irish economy is vulnereable to a property downturn.
Myhome.ie was owned by the leading estate agents in the country and clearly they felt it was time to sell.
The rentals market in Ireland is sustained by immigrants from Eastern Europe and the general expectation is that when the Irish economy slows they’ll be packing their bags.
These are all critical points for the housing market. Now, what does a national newspaper do when it has 40 million Euro and some big reputations riding on the property market?
The worse part of this deal is not that myhome.ie was overpriced, and it certainly was. The fact is the Irish Times cannot claim a credibly independent property market coverage, or general econoic coverage, when it’s placed a 40 million Euro bet on continued economy growth.
The Irish Times believes buying a highly trafficked website is an important step into digital media.
Executives seem not to have contemplated though that it compromises editorial independence and judgement.
It will be difficult for readers to read the Irish Times and not wonder where the company’s self-interest is influencing coverage.
What the Irish Times move means for newspapers in general is that they need to look closely at their independence in all their media outlets. The trust between reader and paper is what provides the revenues that makes bad deals like myhome.ie possible.
Of all the businesess out there the truth that keep coming home in this one is that newspapers are not at all about making money. They’re about relationships.
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[…] Mediangler reckons that the purchase of Myhome.ie by The Irish Times Ltd. ‘compromises editorial independence and judgement’ of the publication and ‘it will be difficult for readers to read the Irish Times and not wonder where the company’s self-interest is influencing coverage.’ Such a doomsday prophecy for Irelands “paper of record” does however ignore numerous facts about the newspaper, its parent company and the property market in Ireland. […]