On 16 March 1973, exactly 36 years ago today, Tony O'Reilly entered a newspaper office for the first time. At the age of 37, and already a star on the American business scene (he was president of the HJ Heinz company, then one of the biggest food companies on the planet), he had taken his first step into the media world by buying control of the Irish Independent, a staid and down-at-heel newspaper based in his native Dublin. It had cost him just over £1m.
Now he went to visit his new acquisition, housed in a shabby building in the heart of the city. The paper's journalists were on strike and were staging a sit-in, but no one seemed bothered by it – these were the old Fleet Street days and someone was always on strike. The paper hadn't appeared for days, but as all the other Dublin papers were on strike too, it didn't matter much.
His arrival was a big event. The main television news – TV in Ireland was only two years old – featured him as its lead item, and a modest crowd had gathered on the pavement to watch the former Ireland and British Lions rugby star arrive. Taking the creaky old lift to the boardroom, O'Reilly was introduced to his new management and editors, and laid out his vision for his new company.
He would not, he said, change the editorial line and would practise a strict code of editorial independence. But more importantly, he saw the Irish Independent as a base from which he would build an international communications company, with operations across the English-speaking world and beyond.
It was the modest beginning of what was to become one of the biggest international newspaper companies in the world. Profits at the time were £750,000 – two years ago, before the credit crunch struck, they were £200m. Three newspapers became 128. One country became seven, on four continents. O'Reilly's original stake, all of which he borrowed – he was earning $300,000 a year at Heinz at the time – became worth over £700m.
That was the peak of course, and as O'Reilly – now Sir Anthony – announced his retirement on Friday, values had tumbled, attitudes had changed and time had taken its toll. But the company he left, now to be run by his 42-year-old son Gavin, is unrecognisable from the business he took over in 1973. A great newspaper career has ended (or almost ended – O'Reilly will still be around as an adviser) but a great company lives on.
When O'Reilly started out in the 1970s, newspapers were regarded as playthings for rich proprietors seeking either political influence or a peerage – or both. They sold many more copies than they do today, commanded a bigger share of the advertising cake, but were also dogged by huge fixed costs and disastrous industrial relations. When he took over the Irish Independent, O'Reilly was more in the "seeking influence" category than the commercial: although rapidly climbing the corporate ladder in Pittsburgh, he was still widely expected to come back to Ireland to carve out a political career that would take him to the very top.
He never did, but found with the Irish Independent he had a great investment on his hands. Rupert Murdoch's destruction of the print unions in 1986, which slowly fed into Ireland and the rest of the world, paved the way for a huge boom in the 1990s. Even regional newspapers became high fashion in the investment community and commanded extraordinarily high multiples. Independent Newspapers, as it was called by then, rode the boom.
During this time O'Reilly was an absent landlord, climbing the ladder of US industry solely on the basis of drive and merit (and a bit of his legendary charm of course). He became CEO of Heinz in 1979, the first Irishman to lead a Fortune 500 company, and a few years later, chairman as well, the first non-member of the Heinz family to get there. He was on the boards of some of America's most august bodies: Mobil, The Washington Post, the New York Stock Exchange and Bankers Trust. In Britain he was a director of GEC. He founded the Ireland Funds, raising $300m from Irish-Americans who would otherwise have donated it to the IRA, and spent it on education and other peace projects across the island of Ireland (he was later knighted for his contribution to the peace process).
His energy in those days was legendary. He played tennis at the White House, spoke at dinners around the world, drilled for oil off the Irish coast and took over Ireland's most prestigious company, Waterford Wedgwood, which he transformed from a bankrupt group to a startling success story with a market value at one stage of over $1bn (unfortunately it did not last, and after the collapse of the dollar against the euro, Waterford went into administration last December taking $500m of O'Reilly family money with it). By that stage Forbes magazine made him Ireland's richest man, the country's first home-grown billionaire.
All this time Independent Newspapers grew and grew. O'Reilly was officially non-executive chairman, but wherever he was – usually at 30,000 feet in the Heinz plane – he was in constant touch with the management in Dublin, aware of every detail, querying every figure, confirming every appointment. Acquisition followed acquisition, but nothing happened without his approval.
Of course, not everything went smoothly and there were as many false starts and setbacks as there were successes – as with any company. The purchase of a group of local papers in the East End of London in 1977 was the first modest move outside Ireland, and was a disaster – he sold them again at a loss a few years later. There was an outdoor advertising business in Germany, and a magazine business in Canada, which also misfired. But he was learning, and these losses were more than made up for by the next purchase, a chain of radio stations on the Mexican border which was bought and sold for a profit of $12m.
By his 50th birthday profits hit £3m and the share price had trebled in the previous two years. The flotation of Reuters in the mid-1980s was a major stroke of luck. Independent's stake in it was valued at £1,000 when he bought it. Now the Reuters shares realised £10m, providing the funds for more serious expansion. In quick succession came local newspapers and recruitment magazines in London (Ms London and Midweek), an outdoor advertising business in France, and then, his biggest acquisition yet, a group of local newspapers in Queensland, Australia, bought off Rupert Murdoch, which he rapidly built on.
By 1991 Independent's Australian business was strong enough to bid for the mighty Fairfax, one of the world's great newspaper groups, competing against Conrad Black and Kerry Packer. He lost that one after a ferocious tussle, but later became friends with Black, who often stayed at his house in Ireland.
In 1994, as South Africa moved towards its historic election, he pulled off the best deal in Independent's history with the acquisition of Argus Newspapers, the biggest newspaper company in the country. Again it was a close-run thing, with Black and Rupert Murdoch among a number of interested parties. The balance was tipped however by his friendship with Nelson Mandela, whose blessing was required by the owners, JCI.
O'Reilly originally met Mandela through another African leader who was also a visitor to his house in Ireland: Robert Mugabe, then a more-or-less respectable African leader. They discovered they had both been taught by the same Jesuit priest, and Heinz became the biggest foreign investor in the newly independent Zimbabwe. Mugabe introduced him to Mandela and the two formed a friendship that exists to this day. In the build-up to the 1994 elections, an exhausted Mandela spent a couple of weeks on his own in O'Reilly's house in the Bahamas, and later visited him in Ireland.
But there was another factor that was also critical to the South African acquisition. Earlier in 1994, after yet another takeover tussle, Independent Newspapers had acquired a 50 per cent stake in The Independent, the London newspaper founded by Andreas Whittam Smith and two other former Daily Telegraph journalists in 1986. The paper's South African correspondent, John Carlin, was a leading opponent of apartheid and Mandela was a big admirer, both of him and the paper. When Mandela learned that his friend O'Reilly was also involved with The Independent, there was no contest. Other bidders were shown the door.
For four years The Independent was run as a 50/50 joint venture with Mirror Newspapers, but it was an uneasy relationship. Editors, including Andrew Marr and Charles Wilson, came and went at great speed and it was only in 1998, when Independent bought out the Mirror, that stability was restored under Simon Kelner, the longest-serving editor in the paper's history (10 years).
In 2000, O'Reilly, aged 64, finally stepped down as chairman of the HJ Heinz company, which in 30 years he had taken from a market value of $900m to one of $15bn. For the first time since he acquired control, he was free to devote his energies to Independent, which now had the most prosperous five years in its history, with its market value touching €3bn by 2007.
By that stage, however, another figure had appeared on the scene. Denis O'Brien, whom O'Reilly had never met but had fought three separate takeover battles against (and led 2-1), disclosed he had bought a 3 per cent stake, which soon became 10 per cent, then 20 per cent and finally 26 per cent.
O'Brien wasn't immediately made welcome, particularly when he urged the sale of The Independent and changes on the board. The fall in the share price of Independent News & Media, and pressure from the banks and bond-holders, finally persuaded the two men to meet. As so often in O'Reilly's life, war became peace, and a deal was brokered which both sides signed up to.
But he realised the time had come to do something he had been considering since his 70th birthday three years ago – pass the reins to his son Gavin and retire while he could still enjoy it. An era, as all the commentators noted over the weekend, had ended. But another one had begun.
Ivan Fallon is UK chief executive of Independent News & Media and author of 'The Player: The Life of Tony O'Reilly'Reuse content