Stories
In this interview, David McRedmond, chief executive of An Post talks about:
- Bringing An Post back from the brink of insolvency
- An Post’s radical plan to take on the banks
- The need for more Government services to be made available in post offices
- Eircom’s early failure at introducing broadband
- Building TV3 during the crash and the lead up to the deal with Virgin Media
- Getting his first job with Tim Waterstone and rising the ranks of WHSmith
- Not getting an interview for the role of Director General in RTÉ because of a lack of “programme making experience”
- His future and whether he will see out the duration of his seven year contract with An Post
Sam Smyth (SS): Hello, I’m Sam Smyth and welcome to my podcast with The Currency. My guest today is David McRedmond, the current CEO of An Post and the former CEO of TV3.
David, your enemies could say that in terms of corporate status, that you were once a master of the media universe and you’ve ended up as postman Pat.
David McRedmond (DM): Very good. They could say that. I’m sure they could say a whole load of other things about me.
In terms of An Post, I often say to people, sometimes I talk to business students and to MBA classes, and there’s no advice you can give students – they know plenty. But the one thing I often say to them is: “Look at the unpopular job because the unpopular job is often the one you can get most done in because people haven’t looked at it or considered it.”
Throughout my career, I’ve sometimes taken a job which people have said “are you mad?” I remember when I went into An Post when it was announced, and actually before I started, this guy came up to me after a rugby game in the Aviva and says “are you mad? You’re absolutely mad”. He had a few pints on him and eventually I just had to walk out and go and get a pint elsewhere.
But it always struck me, there is this thing that you go into a job like An Post. And if you come in from the outside, there’s so much you can do. It’s a good place to use your experience and I’m really at that stage in my career. It’s not that I never stopped learning, but you actually want to use some of the stuff you’ve learned. So, going into something like An Post was actually a fantastic opportunity.
Bring An Post back from the brink
SS: An Post lost €12.4 million in 2016 and made a €41 million profit last year. You must have celebrated that?
DM: Yes, and, I’ll beat the drum here a bit more. It’s a much bigger achievement financially because mails are declining, letters, people don’t send letters anymore. Letter volume’s declining, some are around seven or eight per cent. Each year you start off a further €30 million behind.
I remember when I went into An Post. New Era which is a Government’s consultancy arm, said, and I got a corroborated by PwC, they estimated that An Post, if we didn’t take action would, lose €200 million within four years. I went in in 2016. In this year, 2019, that it would lose somewhere around €110 million and actually we will make a profit of somewhere around €40 million.
I say to the management team, and I do credit them, and I also say to the unions who I give huge credit to, and to all the employees, that that’s a €150 million of value that’s been added, of profit that’s been added.
SS: Yeah, but you hiked the price to get that didn’t you?
DM: Yeah, but the price was just part of it. First of all, it’s hard to put up price. I think we’ve gotten rewarded for making a big move rather than putting it up five per cent or eight per cent or 10 per cent. We put it up by nearly 40 per cent or 36 per cent. We put it up from 72 cent to a €1. What that did was immediately give you a fix to your core economics in terms of your cash flow. But that would only last for two years. That would have added about €40 or €50 million. Probably added a bit more in the end, it did a bit better. About €55 million of value. But, if you’re losing an extra €30 million each year, that is gone in two years. So, we put the price up.
I had to persuade Government to introduce the legislation, to make the changes. RTÉ always say: ‘oh it’s easy for you, you could just put your prices up’ and I’m going ‘no I couldn’t.’ I had to get legislation and it was a very hard piece of work. Once that came in, I said to government: “I’ll put the price up, but then I’ll put in place a strategy to transform the business over two years.’ And I think, I’m proud to say we’ve pretty much done that, and I’m not using the royal “we”. I mean the team have done that.
SS: Yeah, but that was only the start of it. You’re going to offer mortgages; you’re going to offer credit cards. Is there an idea to turn the Post Office into a sort of people’s bank with a delivery service?
DM: I think there’s two distinct businesses. That was the first thing we did. In terms of the strategy, we said rather than being this amorphous mass of An Post, we said there’s two distinct businesses. One is the post office business. That’s the one that gets all the political heat; it’s actually the smaller business in revenue terms. But it’s very visible, because that is the post offices throughout the country.
The other business is our mails and parcels business, which is the delivery service and that’s the much bigger business. That’s a massive machine. So, we actually split into those two businesses. As they’ve developed, the post office business has really become a retail business. It’s all about these buzzwords. Digital, omnichannel…
“So, are we going to become a bank that takes on a bank? I can’t be sure yet, but do you know what, the signs are pretty encouraging.”
SS: The mortgages and the credit cards mean you are going up against the big bad banks – the AIBs and so on.
DM: So, we set up those two businesses and what did we say we’d do around the retail business? Brought in a fantastic chief executive, Debbie Byrne, probably the best marketer in this country. And she took a look at it and we took a look at it with McKinsey and we said: “Yeah, I’ll tell you what we’ll do is we’ll go very big on government services, financial services and we’ll sort out the network.”
We immediately set about to renegotiate the contract with all the post masters, because it’s owned by individual postmasters. We closed 153 post offices, which I remember a famous journalist in this town said: “I know you say you’re going to do that but you won’t close one.” And we closed 153 and that was very important.
SS: Wasn’t 200 jobs gone in Little Island in Cork alone?
DM: That is on the other business, the mails businesses. But in terms of post offices and closing those, what that meant was all the traffic transferred to the other post offices. All the time you’re giving another couple of years. It’s constantly another couple of years life you give by doing these things.
And the big move is financial services. So, are we going to become a bank that takes on a bank? I can’t be sure yet, but do you know what, the signs are pretty encouraging. Credit card sales are going phenomenally well. It is something like one in three or one in four of new credit cards are coming to us. Our loans, which we’ve just started, they’re going incredibly well. Our current account was slow to start off. It’s now picking up fantastically.
We’re building an ecosystem, as they call it, which really is a way of saying we can now build any product digitally. We’re entering into agreements with world class providers. We’re working closely with fintechs. We’re doing everything to turn it into what looks like a bank.
SS: It’s a marketing thing? Where you’re up against people who the public always had a great fear of, I think and resentment of in some ways.
DM: Yeah, and people love An Post. I take no credit for that. I take a bit of credit that they don’t hate us yet. But people love An Post because, for years, it has been a company that’s been owned by the citizens.
SS: Will they still love you though when they have to pay back their loans? When someone comes knocking on their door?
DM: That’s a real issue. It’s a very good question Sam. That becomes a real issue. There is a reason people don’t like the banks and that’s because banks look for their money back and they look for it back at awkward times. I think there was something else with the banks. The banks perhaps went through a period, I think they’re changing now, where there was very little focus on the customer, where they were just big institutions. Big bonuses at the top. That whole culture that we all know about. I think that turned people off the banks.
An Post never had that culture. It was always community based, An Post. Ever since Feargal Quinn first split out the post office from the old P&T, it has had that very nice culture around it. So, using that culture and using that brand, our retail business is going to really be big in financial services.
SS: Except you’re going to keep some of the services offline. Robert Watt, the Secretary General of the Department of Public Expenditure, was sort of raising eyebrows about that wasn’t he?
DM: Yeah. It was unusual to see your emails in front of the Irish Times. Listen, I appreciate Robert Watts’ style because he’s very direct and he says it as it is. And I much prefer that as it’s refreshing to have that.
SS: An exciting civil servant. Is that how they’re supposed to be designed?
DM: I may enjoy working with that, I’m not sure everybody else enjoys it. But actually, the reality is offline is just a word that’s used within Government. I actually used that in one of my mails and I was horrified to see that because I don’t believe in the word at all. I really do believe in omnichannel. So, whatever you see in a post office should also be available online. Whatever’s online, you should be able to get some physical contact with people.
Our line, and it’s a bit of an advertising line, but our line is that ‘we’re human about money’, and if you are going to be human about money you need to have humans. You can’t be human about money and just have some ATM machine. So, it is all about using the heritage and the strength of An Post, which is its network and combining that with us leap-frogging the banks in terms of technology with the best financial products. And we can do that. I mean we’ve got a few big advantages. We have a lower cost of capital typically than the banks because we don’t have the same profit incentive. We don’t have the huge technology systems, those old systems that the banks have. So it’s much easier for us to take advantage of.
SS: So, you’re saying you’re not going online because it would be too expensive?
DM: No, we are going online.
SS: What was his line then? He says you’re taking some services offline.
DM: This is around government services. He’s talking about things like the passport services. You can go online and do the passport service and that’s provided through the government, but you should be able to go into the post office and do the passport. That’s what he means by offline.
“I don’t have to spend my time trying to persuade Department A to speak to Department B to knock me on to Department C to write a memo for cabinet that then gets demoted to a memo”
SS: Oh, government services?
DM: That’s just on government services. The reason I like doing financial services is it’s not about government. Frankly, doing government service with government has been three years of pain. To try and get government to use the post office network, I mean, the politicians are on to me day and night, and I can absolutely understand it about every one of those 152 post offices. Or even more, you relocate a post office within a town and they’re on to you. And there’s marches and there’s petitions and all of that. But they’ve done absolutely nothing to get services through post offices.
And I’m on to them all the time and Debbie Byrne and her team are on to them and saying: “Why don’t you use the post office network?” There’s a harp above the door for a reason. It’s a government office. Use it to put services out. You should be able to get you motor tax in a post office. You should be able to get a leap card in a post office. You should be able to transact in whatever way you can by going to a post office.
I remember reading something Leo Varadkar wrote and he said that he had been reading something about France and that the areas where there was the greatest social unrest were the areas where there wasn’t a post office. You know, that benign presence of government. And that matters. But then they’ve got to use it.
So, the great thing about financial services is, I don’t have to spend my time trying to persuade Department A to speak to Department B to knock me on to Department C to write a memo for cabinet that then gets demoted to a memo for another committee and then doesn’t appear and then merges with something else. And all the nonsense that goes on. Financial services – we get on and do it ourselves. So, if you talk to postmasters, they’ll say An Post has done a fantastic job in financial services, where are the Government services?
Broadband, Eircom and regulators
SS: Well, I’m just saying here, when you’re talking about offline stuff there, there’s a lack of broadband services in rural Ireland. This goes back to the state-owned Eircom, but they were sold to the private sector, and you were the managing director of Enterprises at Eircom.
DM: I had various different roles at Eircom and I was certainly one of the senior management team there. You know, the story of broadband is fascinating in this country. I’m currently the Non-Exec Chairman of eir, and I don’t speak about eir in that role because I’m not an executive. But I just say in relation to broadband – broadband in Ireland is good compared to most countries.
SS: Go back to Eircom, at that time, I can remember, for personal reasons, there was a lot of criticism that you were not providing a broadband service in Eircom?
DM: I think that’s right, and I think Eircom deserved a lot of criticism at the time for it. Now, having said that, we did start the roll out of broadband. I was certainly very committed to that. But I think the company wasn’t sufficiently committed at the time. I think there were the pains of going through privatisation, going through a failed IPO.
SS: You were one of the bright guys in there. There was a report at the time that you had received more than €6 million in the three years before Eircom was sold up?
DM: Yeah, I remember a report saying that. I think it as over a longer period actually Sam. But…
SS: That’s not bad though?
DM: Yeah, I made some money, it wasn’t bad. Am I personally glad I made it? Yes. Do I think I made it by not providing broadband? No. I would have worked day and night to try to do that.
SS: I can remember at the time…
DM: Let me.. But Sam.. Here’s the thing.. I remember, and I still see it happening. I fought ComReg because ComReg absolutely failed at the time to understand that the need to roll out broadband was to be able to get a return on investment. And all it was, was following some ridiculous model that would work in London or somewhere, where it would say: ‘We’ll drive down the price you could earn from broadband and, by the way, now will you invest?’ And I’m kind of going, ‘I can’t get the money.’ How do we get people to put in money if they’re going to lose money every time someone buys broadband?
So the real issue in this country, quite often, is to get that alignment between what an investor is going to do, and investors are rational, capital is rational – and forget about executives and whether executives are making money. We can come back to that and criticise that all you like. But investment isn’t some greedy individual. Investment is usually my mother’s pension fund or it’s a teacher’s pension fund, that’s usually what it is. And you need to make sure that if you’re going to invest a teacher’s pension fund you need to make sure it can make a return.
SS: Eircom, when you think of it, was a principle conduit by which people would receive broadband from in this country, and it failed.
DM: Well I think actually as I’ve said today, broadband in this country is pretty good. Now, it’s not everywhere it needs to be.
“I wouldn’t do it if I felt there was a conflict of interest. By the way, nor would the shareholders of eir want me to do it if there was a conflict of interest and nor would the shareholders of An Post”
SS: I don’t want to say you were the genesis of the failure. But it was pretty early I think. It all goes back to then.
DM: Well I think it goes back way earlier. I think it goes back to when it was in state ownership and there was an underinvestment in the telecoms network. And they kept talking about great investment in the network. Eircom, famously, had a really poor access network. As broadband develops overtime, I’ll say it again, Ireland has done pretty well and most of that provision, I think, has been through Eircom, or eir. You can criticise it Sam but all you’re doing is criticising the timeline by which it was delivered. The fact it has been delivered and has caught up with other European countries and has now passed out most European countries, I think is credible. And by the way, it’s done so without any recourse to taxpayer money or taxpayer funding. That’s been pretty good.
Now, you get to the point where you’ve got the issues that you have in every European country of rural broadband. Most European countries are putting in schemes like the Irish government are putting in a scheme where it has to subsidies the edges of a network. So that happens.
SS: About eir, you were Group Director there from 2002 to 2006 and now you’re back as chairman. Is there any potential conflict of interest there with your job as CEO of An Post and you being chairman of eir?
DM: I don’t think so. I wouldn’t do it if I felt there was a conflict of interest. By the way, nor would the shareholders of eir want me to do it if there was a conflict of interest and nor would the shareholders of An Post want me to do it if there’s a conflict of interest. And they’ve all agreed that I should do it. There’s probably a small overlap but you always manage those by saying, ‘I don’t get involved in decisions around mobile in An Post.’ Because that’s a relatively small business of ours. So, I don’t get involved in that.
SS: Why did eir pull out of the broadband tender?
DM: I’m not going into that because Carolan Lennon has covered that. She covers that and she’s the chief executive of eir. I’m non-executive so it’s wholly wrong for me to talk about eir when you’ve got Carolan, who by the way is one of the finest CEOs in the country. She’s doing that and she explained all the reasons. She was asked a question and she gave an answer.
SS: And do you support her totally in that?
DM: Absolutely, absolutely. I think she’s been spot on. I think she’s done a phenomenal job with eir and I think eir has a lot to be proud of in terms of how its transforming and what it’s delivering,
SS: Tell me, you’re also chairman of the Powerscourt Group, they’re a communications company.
DM: No, when I took up the eir role I had to give that up, because I only can do one non-exec role so there’s only so much time I have.
SS: So, do regret that?
DM: Do I regret?
SS: Having to say goodbye to..
DM: Having to drop a role? Yeah, I do of course. I’d love if there were more hours in the day. I’d love to be doing more. But there isn’t the time.
SS: Communications is a fascinating business. Very few companies now do not have a communications consultant employed.
DM: Yeah, the whole communications industry, the PR industry. Look Sam, what I like in business, whether it be Eircom, sometimes you can be in an unpopular position. An Post, sometimes you can be in a popular position. TV3, sometimes you can be struggling and then doing well. In all of them, what I really enjoy is that kind of public interface, the point at which you’re doing something and it’s the point at which that hits the public. That’s when it gets really interesting because that’s when it comes alive. So, I think PR is really at the nexus of that. I think it’s an important industry.
Powerscourt has done phenomenally well. It was set up by Rory Godson. It’s done phenomenally well in London. It is principally a London based company, but it’s also done well in the Irish market.
SS: But you’re also a non-executive director in PLI. That’s Premiere Lotteries Ireland. Now An Post stopped running lotteries in 2014. Is there any connection between the fact you’re now a non-executive director in PLI, Premiere Lotteries Ireland, and the fact that An Post stopped running lotteries? Now it was before you arrived there.
DM: No, An Post owned the lottery and it sold it. It sold the national lottery about three or four years ago.
SS: To Canadian teachers?
DM: Correct. But we retained 25 per cent so that’s why I’m on the board. I’m on the board ex officio, it’s just as CEO of An Post to make sure we look after our investment. That’s very important. It’s very important that we look after our investment.
SS: Obviously I’ve watched through the years, and everybody has, that was your years, in a way, in show business. Literally show business. And business with a capital B it was too. That was after the London bankers Doughty Hanson invited you to become the CEO of TV3.
The TV3 years: sparring with Vincent Browne and cutting deals with bankers
DM: Yes, so I went to TV3 after Eircom and I loved it. It was a much smaller scale company. You know you could fit everybody into the newsroom so if you needed to talk to all of the staff in the company you asked them to a town hall with 250 people in the newsroom. There’s something really nice about being able to do that.
The media is a fascinating business. It was really tough timing because it was about a year before the crash so to be in a leveraged private equity media company is about as tough a place as you’re going to be when a crash comes but we worked our way through it and I think we came out the other side after some very tough years.
“It could get fiery at times with Vincent and get pretty heated at times. But it was always absolutely with the shared aim just to have the best programme possible.”
SS: Obviously, I was there from time to time during that time. Now, one of the things about media is that it’s all done in public. Tell me, at that time you had the likes of Vincent Browne who was presenting the main show. How did you find wrestling the egos of media people etc, etc to your role as chief executive? Was it a tricky role?
DM: No, if it was anything that was the attractive part of the role. I love journalism. My daughter’s a journalist, my father was a journalist. I love journalism. I probably really wanted to be a journalist. I may still want to be a journalist. So, no. That was the attractive and enjoyable part. Look egos in showbiz – there are egos everywhere. It is no different to egos in business or anything. It tends to be, sometimes, a bit more dramatic.
For example, somebody like Vincent Browne who I’d count as a good friend, Vincent you know, it could get fiery at times and get pretty heated at times. But it was always absolutely with the shared aim just to have the best programme possible. That’s what it was all about it was always about having the best programme possible. And he was very passionate about it and that’s what made that programme so great. Was that passion that he brought to it.
SS: How much, at that time, was there an element of public service broadcasting in that?
DM: I think a huge element. I don’t like this notion of you go back and you challenge Eircom, and how it was privately owned, or you can talk about An Post. This private versus public ownership I think is overplayed. You know private companies have every bit as much a public service ethos.
SS: Have they an obligation do you think to have a public service?
DM: Yeah, I think you do. There might not be a huge difference between a market obligation and a public service obligation. One sounds a little more onerous than the other. Certainly, in something like broadcasting you do. Or in something like telecoms. Because usually, particularly in a sub-scale country like Ireland, you’re usually one of three providers. So, there was only TV3 – the only non- state broadcaster was TV3.
SS: And you were losing money, I think at that time?
DM: Well we lost money at certain years. But we had an obligation but here’s the thing – if you’re a broadcaster, you want to build a franchise. If you build the public service, I don’t like the public service title, but if you build that sense that you’re there to serve your audience and you care about your audience, that’s going to work for you. And in the end it was my job to make sure I could translate that into making money. If I looked at TV3 at the time, where did we make our money? We probably made our money in Ireland AM and in Vincent Browne. First in the morning last at night. Because those were the slots we owned and those were the slots we were beating RTÉ in and that’s where we could make our money.
Things like sport are really important and big soaps are important but they’re expensive and typically you don’t make money in them.
SS: Coming towards the end, Doughty Hanson, I think you said that for a banker they had been very supportive through the recession.
DM: I think so. For a private equity firm, they stuck with it. They could well have walked away and just said ‘look, this is too difficult’. Typically, private equity companies don’t like their money tied up and they don’t like having their investment focused or time tidied up. So, I think they stood by it. I think they always knew that as a management team we were determined to get through the recession. And they knew that, once we got out the other side, there would be the possibility, and there was a possibility – we knew that between Virgin Media, eir or Sky – there was going to be a buyer.
SS: And where you involved in the sale of the company?
DM: Yeah, pretty much involved. Probably led it. And you know what we had to do it because Ireland is just too small of a media market to be able to be able to support a commercial broadcaster purely through advertising. So that’s why it had to be with one of the big platforms. Where they can make their money through broadband, sales and whatever else on the back of it. So, it was inevitable it was going to be owned by one of those three platforms.
SS: Although now, the Irish taxpayers, they paid €83 million at the end of the day to Doughty Hanson?
DM: I don’t think the Irish taxpayers paid anything to Doughty Hanson.
SS: Was there not money that went back to Doughty Hanson?
DM: No, the money that went back to Doughty Hanson was from the sale of the company. So you know, what happens is the company gets restructured, you refinance the company. Yes, loans were written down because it was with Anglo Irish Bank which then became IBRC. Loans were written down but that was all done in a very structured way.
“We had to let a number of jobs go. People took big pay cuts. A whole load of things had to happen so that we could restructure. We worked very, very hard so that we could keep 200 jobs going and keep a commercial broadcaster going.”
SS: Oh, I have no doubt it was structured. But at the end of the day it was €83 million that was not paid back?
DM: That was not paid back to IBRC?
SS: Yeah.
DM: Yeah, I think you could…
SS: Which was owned by the state so..
DM: Well it was owned eventually by the state. It wasn’t owned by the state when the deal was done and probably wasn’t, I’m not even sure of the degree, I can’t remember when all the state ownerships happened. But you know, when you refinanced you refinanced. That’s what you do as a company. There was always a possibility, and it would have been easier in some ways at that stage, just to walk away and say ‘this is too tough.’
I wasn’t going to make money from it at that stage so I could have just walked away. But actually, much better to do, and what we did was a deal. At the time I think it was seen as a deal which was responsible and smart because it incentivised everybody to try and keep this company afloat – to try and keep the 200 jobs. We had to let a number of jobs go. People took big pay cuts. A whole load of things had to happen so that we could restructure. We worked very, very hard so that we could keep 200 jobs going and keep a commercial broadcaster going. And the issue is not the state lost money in the end because, and I don’t know, because I don’t know if that was funded by…
SS: Well the loans?
DM: Well I don’t the loans, how much they were funded by the state and how much were backed up. I don’t know all of that. What I’d say Sam, is you look at point in time forward and you say ‘what are the right things to do here and what are the best things to do here?’
Banks lose money sometimes on loans. Companies lose money sometimes doing things. The job of management is to try to repair that and try and find the best path forward and that’s what we did and that’s what good responsible companies and good responsible management does. To then find some roundabout way of saying ‘oh well a bank had to be rescued and money had to go in from taxpayers.’ I don’t believe that that adds up.
A Jesuit education and working at Waterstones
SS: You come from a very ethical and logical background. You were a Gonzaga boy. Educated by the Jesuits in Dublin. That’s a privilege.
DM: I think certainly, education shouldn’t be a privilege. It’s a right. I was pleased to get a good education and I got a good education with the Jesuits. To be honest, I think there’s many good educations so you may call it a privilege, others might just say it’s one education.
SS: If you and I were out and we saw two guys at the other end of the bar and one of them went to Blackrock and the other went to Gonzaga. Could you tell the difference of which was educated where?
DM: I couldn’t possibly go there.
“I wouldn’t reduce life to either or. Money is something, we all need some. It’s interesting to work out how much do you need. But life is rich and interesting.”
SS: I’ve friends that do go there.
DM: Yeah, no I couldn’t. Luckily in Ireland we have a good education system. But we all know, as a parent, 70 per cent of the education is at home. Not in doing their homework, or anything like that and I certainly can’t claim to have done that, but it’s how your parents bring you up. It’s what’s in your environment. What you learn and all of that.
It’s funny when you ask that question, could you tell where someone’s educated from? Well, actually do you know what, probably not. If I look at An Post and I look at all the people in An Post, it’s interesting. There’s a huge variety of backgrounds but the education, I think, is fairly similar.
SS: Although the Jesuits people, generally they’re just marginally more smug I suppose. But listen, you went on then to UCD and surprisingly, given your subsequent career, you did an arts degree?
DM: I did. I guess it was my background at home. It was a very liberal home and they said go and get an education and I went on and did an MA in Modern Irish History.
SS: What I was thinking when I was asking that question was ‘David seems to have a preference for higher thoughts than mere money?’
DM: I wouldn’t reduce life to either or. Money is something, we all need some. It’s interesting to work out how much do you need. But life is rich and interesting.
SS: But then you took a job with Waterstones the bookstore.
DM: I only took that job because I couldn’t get any other job. I went to the UK and..
SS: There was no choice involved?
DM: There literally was no choice. I thought I’d become editor of The Times or a producer in the BBC at the age of 21 or 22 when I went over. And actually, I ran out of money after a few weeks, so I got a job in a bookstore and it was the second Waterstones bookstore that opened. I was interviewed by Tim Waterstone and became great friends with Tim Waterstone.
SS: And you were the USA project director in Boston. Then CEO after WH Smith bought the company. That’s impressive.
DM: There was a gang of us who built that Waterstones into a big book chain. Some very good people before me and very good people after me. Tim Waterstone is an incredibly charismatic person and had that real white-hot belief. That was a company that just believed in books. It didn’t believe in business at all. It just believed in books and nice places and life and lifestyle.
So, he sent me off to open it in the United States when I was about 27 or 28. And that kind of half worked spectacularly well and half worked spectacularly badly but that…
SS: And did you wear a cardigan and smoke a pipe around the bookshop?
DM: No, I wasn’t wandering around with battered copies of Ulysses. I wasn’t doing any of that.
So that was great fun and then I was brought back here. I was actually the Operations Director and then I went back to the States as CEO of a company there. So, I went back and forth doing retailing and it was great.
SS: Obviously it stuck with you. Are you reading a book at the minute, is there a book beside the bed?
DM: There is, it is a book which was recommended to me, I saw about three weeks ago, by a great American friend and it’s called Fleishman Is In Trouble.
SS: It’s a woman who works with the New York Times Magazine, I think, that wrote it.
DM: That’s right. it’s a rollicking read. And a bit of an eye opener for me. I’ve suddenly realised I’m much more innocent person than I thought. It’s great fun.
SS: Do you go to the cinema?
DM: Not really. Ah I’d go sometimes. I wouldn’t be a huge cinema goer but I like a good film occasionally.
SS: Your son Ben was an early employee at Intercom and is now valued at €1 billion and now has a start-up creating smarter emails. Did you give him a leg up along the way?
DM: No, no. I gave him no leg up in fact. Ben is entirely self made. I remember, he went to the States after school here. He said ‘I’m not going to university. I’m not going to waste the years of my life I’ll be at my most productive in the start-up world,’ and that’s a big tech thing.
He was born when we lived in the United States so maybe that was the only advantage we gave him. He at least had a US passport. So, he went to New York and worked for a start-up there and then worked for Intercom and now he’s doing his own start up and he’s doing extremely well. He’s been widely successful. I’m very proud of him.
RTE financials woes and why he did not get the top job at Montrose
SS: Going back then, your father Louis McRedmond, he was a very distinguished journalist. He was the first director of the journalism course in Rathmines.
DM: He was. He also was very involved with John Horgan in establishing the journalism course which is, now I think, DCU. Yeah, very involved in journalism.
SS: Former editor of the Irish Independent.
“It was odd at the time. I think I was told ‘I lacked programme making experience.’ I said: ‘I’ve literally built a studio.’ I put blood, sweat and tears into TV3 to building that studio.”
DM: Yeah, he was the youngest editor, I think. I think he got fired because he was trying to take the paper too up market. That was allegedly what was said. He has an extraordinary reputation still amongst journalists in this city. I’m really pleased and thrilled that his granddaughter, Finn McRedmond, is now a budding journalist in London. And I keep reading op-eds by her in The Irish Times over the Summer. So that’s a great thing to see.
SS: There’s a rich heritage there. So, tell me, given that heritage in public service journalism, there was a story that you applied to be the Director General of RTÉ?
DM: Yeah, I did. I had a meeting with a head-hunter, and they said the board of RTÉ didn’t want to see me. That’s fine, that’s their choice.
SS: You didn’t get an interview?
DM: No. It’s kind of a bit odd. It was odd at the time. I think I was told ‘I lacked programme making experience.’ I said: ‘I’ve literally built a studio.’ I put blood, sweat and tears into TV3 to building that studio. We were producing seven hours of live TV a day and doing a whole load of other things. So look, that’s fine.
SS: Well RTÉ is now looking for €55 million. Do they deserve it?
DM: It’s a funny question. A funny way of putting it. Do they deserve it? I think it’s important that RTÉ does well and is well funded.
SS: Ok sorry. They want euro €55 million. Have they earned it?
DM: I think there’s a way to go. I think RTÉ has a huge amount of funding, but it also has obligations. Dee Forbes is in there and it’s a very, very tough job. It’s a very tough time being in media.
My own view is there’s only so much funding you’re going to get out of a country of this size. And that we have to accept that. The problem we have is, as a sub-scale country, can we afford that public service broadcaster model? And I think we’d all want it. I think we’d hate to see RTÉ go.
SS: Well do you think the answer is, rather than you collecting the licence fee at the post office, which would be handy, but there should be a charge like a broadcasting tax that you pay?
DM: That’s a model that could work. Possibly. But I don’t think..
SS: That’s what RTÉ are looking for.
DM: You know what, I think there’s a couple of problems with it. First of all, is it a tax? It’s interesting that you call it a tax I think they call it a broadcasting charge.
SS: Well that’s semantics, isn’t it?
DM: Yeah, but they’re kind of important semantics because if you call it a tax..
SS: Yeah but that’s ‘tomato/tomato’.
DM: But should you have a tax? Why should I be taxed for something that only exists voluntarily for me. I mean roads don’t exist voluntarily. I’m going to use a road. But what if I don’t watch RTÉ? That’s the tricky issue around it.
“I think there is an argument for RTÉ being smaller, narrower but being absolutely brilliant.”
SS: Well, except that if you want to call it a charge and it’s mandatory. What was the recent thing they had: ‘It’s mandatory but not compulsory.’ Nonsense. Playing with words. But if it’s a compulsory charge, it means you get put in prison if you don’t pay it?
DM: And I think mandatory might mean you don’t. Your requirement to pay the licence fee is because you have a television. It’s not because you’re a citizen or it’s not because you live in the State. It’s not the same as a tax requirement and that is an important distinction. Now should that distinction be erased? Why wouldn’t you go as far then of just saying ‘why don’t you pay it out of the exchequer funding?’ You know, why don’t you just pay it out of income tax and just agree a fee for 10 years to RTÉ? That would be a model.
SS: Would you be attracted to that as a model?
DM: I don’t know. I think Government does have to work out how is RTÉ going to be funded. I think RTÉ itself needs to be clear about really how much funding it needs. It’s not good enough to say ‘we could do loads of things if we had loads more money.’ How about, we don’t need you to do loads of things. How about we need you to do a few things really, really well.
SS: Are you talking about shrinking RTÉ to its public service?
DM: I think there is an element around that. And RTÉ’s always resisted that. It’d be like public service broadcasting in the States. And it’s a minority and it’s a niche. I hear that argument. It’s a bit thin though just to say that, I think the work needs to be done. I’m sure they’ve done it, but I think there is an argument for RTÉ being smaller, narrower but being absolutely brilliant.
I mean if you talk to anybody, everybody loves RTÉ Radio 1. Even if you don’t listen to it, you like it. The same way that British people love BBC. We love RTÉ Radio 1. It just kind of works.
RTÉ television, there’s things that people like. The Late Late Show, The News. Beyond that, what is the remit? Why do we have all these other things? We needed RTÉ 2 at one stage and God knows my poor father spent his life in RTÉ and going around the country arguing against Conor Cruise O’Brien so that there could be an RTÉ 2. There was a need at a stage when you didn’t have Netflix, you didn’t have cable, you didn’t have a satellite. You are the only choice was what would be available, or that you could bring in so you needed another channel.
SS: Well now we’ve got TG4, which dare I say, is a public service broadcaster.
DM: It is and it’s an expensive one, it’s expensive for its viewership. But that might potentially be a more honest model, which is to say this is what it is. Now, the problem you always have with exchequer funding is then do you say you’re turning it into a state broadcaster? And they love this distinction between being a public service broadcaster and a state broadcaster. And that is an interesting distinction. So can a Government say ‘we’re going to cut your funding, then we’re going to increase it and influence it.’ You need some arms-length agreement. There are mechanisms for putting that in certainly.
“Am I in a rush to get out the door? No, because we’ve just sat down, we’re looking at our strategy again.”
SS: Tell me, would running RTÉ bookend the closing chapter of your career?
DM: Absolutely not. I’m not saying I would never do it but no it’s not there as something I have to do to bookend a career. Maybe I’ve got a couple more goals before I think of the bookend.
Look, life is wild, it’s varied. My last daughter is leaving home. She’s off to do psychology in the UK in university. So, she’ll follow that route and people follow different roots. So who knows, life is wide open. And the one thing I always say, if you look at the things I’ve done in my career, there isn’t really a lot of sense to any of it.
SS: How many more years do you see yourself giving to An Post?
DM: Oh, I said I’d do the transformation of An Post and my contract is seven years. Would I stay the whole seven years? Possibly not, because you need to start thinking of looking for something else at a certain stage. Am I in a rush to get out the door? No, because we’ve just sat down, we’re looking at our strategy again. We have so much to do. We have fantastic momentum. Our company is doing really well. Our mails and parcels. Taking over e-commerce, that’s doing amazingly. We’ve built a great team there. We’ve great people coming through the company.
The union was key to us doing that. I mean you talk about public service; it was the union who actually took the most market approach when I was in An Post. The head of the union, Steve Fitzpatrick, took me aside and said ‘David you’ve one thing to do. Get into parcels,’ because An Post was getting out of parcels. ‘You’ve got to get into parcels in a big way.’ That was the business brains behind it. That was the market motivation. So, when I say sometimes you look at a company and you say: ‘They should look at the public sector because the private one’s purely about profit.’ Both tend to go in both directions and its how you manage that mix. So, I could see myself doing it. There’s plenty more opportunities.
SS: Is there anything else interesting in you?
DM: You are right at hinting at me around media and that. I love media and I love journalism. Involvement in that at some stage again. It could be non-exec involvement it could be exec involvement, it could be whatever. But I also love the infrastructure work. You know companies like eir. eir went through all of its difficulties but it really matters. Particularly when you’re outside Dublin. When you’re in Dublin you can kind of go ‘eir, is it that good?’ or ‘An Post, is it that good?’ These are magnificent companies and it’s when you’re outside Dublin you see them at their best. If you go to Sligo and you see the call centre for eir or you go and see An Post in Athlone, it really matters. And then you see it in every town and place so I love that public aspect but there’s a bit of me that also yearns after journalism.
“I’m sitting there in An Post and watching all these people passing me out. They’re cleverer, they’re smarter, they think faster.”
SS: You have of course straddled both public and private sectors. Tell me, which businessmen and women have impressed you most?
DM: I think Tim Waterstone would absolutely be top of my list because Tim had this extraordinarily emotive approach to business. To him it was all about the emotion of what you were doing and caring and he deeply, deeply cared about book selling and he used to always describe it as a noble profession. The nobility of it, the nobility of work. And just that deep respect for people. And that I adored and think he’s totally inspirational and I still see him very occasionally.
Tony O’Reilly, who I worked with at Eircom, was an extraordinarily larger than life individual and great breath to what he was doing and I like that. I think what’s most interesting now though is it’s not so much about businessmen but it’s more about probably businesswomen coming through. If I look in An Post when I joined three years ago, we had a top team of 12 men. I said: ‘they’ve got to be kidding, is there any women in the organisation?’
Nowadays, the team is eight. Four women, four men. It’s an extraordinary change what that brings. I have a brilliant chief of staff, Aoife Byrne, she changed that. People come in like Debbie Byrne. These are super, super smart people. One of the slightly melancholic things in life is, I’m sitting there in An Post and watching all these people passing me out. They’re cleverer, they’re smarter, they think faster. For the first time in my life I slowed somebody down. I said ‘no, you need to go more slowly at this.’ I’m seeing that happening. I think that’s the interesting story looking forward.
