Tony O'Reilly was once the golden boy of Irish sport and business, and his humbling has been both surprising and shocking. It had been clear for some time as his business empire shrank ever further that he was in difficulty, but few people thought it would come to the point where he was personally insolvent -- or, to put it bluntly, broke.
Two weeks ago a court here refused him more time to sort out his debts. He owes around €200 million to more than half a dozen banks, one of which is AIB, the biggest Irish bank which is now owned by the state. O'Reilly owes AIB around €22 million and the bank would not wait any longer, taking court action to force a further sale of his assets, which means the other banks and creditors will also be seeking repayment of their outstanding loans immediately.
He has already been selling off assets, including much of his art collection, raising €100 million to pay down debt. Now his homes and land, his other prize possessions, even the private graveyard plot in a corner of his estate in Co. Kildare where his parents are buried, are up for sale.
It is beyond humiliation, but it is now happening and the air here is thick with schadenfreude which, if your German is a bit rusty, means taking pleasure in someone else's misfortune.
We've always been a nation of begrudgers, of course, so we're particularly good at the old schadenfreude. We take special delight when the person in trouble is a high profile personality with a millionaire lifestyle. It's far from that he was reared, we say in mock sorrow.
Even among those professing sympathy for O'Reilly in the past week or two, an undercurrent of this miserable stuff has been clearly detectable. And it's not what he deserves.
It's important to remember that O'Reilly was the first international businessman with a global profile that Ireland produced, and also one of the first to become a billionaire. And it's important to remember that he made his money from real business, creating real jobs, producing real products and not from speculating on a property bubble like our more recent billionaires.
He did benefit from the Celtic Tiger (advertising revenue in his Independent Newspapers soared during the boom), but O'Reilly's success had predated that era and was built on something more substantial.
As a middle rank executive in Independent Newspapers I met him only once, in the late 1980s. It was the only time he visited the Independent offices in Middle Abbey Street in the center of Dublin in the nearly 20 years I worked there. The fact that he never visited was his way of giving visible proof that he never interfered in editorial matters (something nobody really believed).
On the appointed day, the limo pulled up outside and the senior editorial brass were on the steps to meet him. He was ushered inside and then made his way through the building, floor by floor, desk by desk, shaking hands, meeting everyone.
It was like a visit from a movie star. He seemed surrounded by an aura, with his perma tan, perfectly coiffed hair and silky suit.
We spoke briefly and I told him about the work I was doing planning our first Saturday magazine (at the time I was supplements editor). I told him we were going to call it Weekend and that I was going to do a secret dummy run of a thousand copies in the Sunday World offices (where there was a color printing press) to show to advertising agencies. He nodded approval, made a few humorous comments, and passed on to the next desk.
A couple of hours later he was gone and we never saw him again. He did his Independent Newspapers business from the group's offices in Hatch Street in another part of the city, to where the editors were summoned on occasion.
At that stage in the late 1980s O’Reilly was approaching the peak of his power following a meteoric rise to the top. He had come from a very ordinary background but had got into a good school and become a rugby star. As a very young man, the charm and force of personality that was to be a major part of his success throughout his business life was already making him a star.
He started at the Irish Dairy Board where in his early twenties he created the Kerrygold international brand which put Irish butter on the global map as a premium product for the first time. That attracted the attention of the giant Heinz food corporation in the U.S. where O'Reilly soon became the boss and began to build up serious wealth. He had not forgotten his home turf, however, and-criss crossed the Atlantic to build up businesses here, including the Independent group of newspapers which he took over for a song.
In the years that followed he built the Independent into a global group, with papers and media operations in the U.K., Australia, New Zealand, South Africa and India. He also got control of Waterford Glass in Ireland and the Wedgwood china business in the U.K., which he put together with the aim of establishing a prestigious tableware company at the luxury end of the international market.
And there was his controversial involvement with Eircom, the national telephone company in Ireland, and other businesses as well. It was an extraordinary level of activity.
With O’Reilly’s business success went a high level of philanthropy, the most impressive part of which was his foundation of the Ireland Funds, the international organization designed to help Northern Ireland. In the U.S. it provided a far better alternative to giving money to Sinn Fein and the IRA.
O’Reilly was knighted and was comfortable with recognition from the U.K. long before the Queen's visit to Ireland prompted other people to catch up with the new relationship with “the old enemy.”
In retrospect now, of course, it is possible to see the weaknesses and mistakes once hidden by his patrician style. His hubris saw international figures appointed to the Independent board, among them Ben Bradlee, Baroness Jay, former Canadian Prime Minister Brian Mulroney and other star names. They were all entertained at great expense in Gatsby style by O'Reilly at his estate in Kildare, a sore point these days with Independent staff who have seen their pensions cut in half.
He himself took enormous sums out of the businesses he was involved with, particularly Independent newspapers. This weakened the company, allowing Denis O'Brien (with his mega money from the new mobile phone era) to eventually wrest control away from him. He also extracted as much as he could out of Eircom at a time when that company needed serious investment.
His biggest mistake, however, was Waterford Wedgwood, failing to see that changing tastes were making its products less desirable to the younger generation of well-off homemakers -- cut glass tumblers and expensive china were no longer must have items in a new era of casual dining.
He poured over €400 million of his own and his brother-in-law's money into Waterford Wedgwood, but it was never going to work when similar products could be made far cheaper in Eastern Europe and Asia. His belief that these products had to be made in their traditional places (Waterford and Stoke) was in a way admirable, but it was doomed to failure.
He financed efforts to save Waterford Wedgwood by continuing to suck money out of Independent News & Media (INM). INM was still a successful business but it was very heavily indebted. In spite of this it continued to pay out huge dividends, of which O'Reilly was the largest beneficiary.
When the global crash happened, advertising revenues vanished and the whole deck of cards O'Reilly was holding began to collapse. Even worse than happened later in INM, workers in Waterford saw their pensions vanish as their jobs went elsewhere.
Despite O'Reilly's charm and power and his image as a billionaire of international standing, the reality by then was that he was a busted flush. He had borrowed heavily over the years to keep funding Waterford Wedgwood and much of that was based on personal guarantees.
Which is why his lawyers ended up in the courts here two weeks ago pleading for more time for him to meet the €200 million he owes his various banks. It was a sad end to a once glittering career.
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