Media Lab Europe suffers funding shortfall

Media Lab Europe, the flagship research institute set up by the Government at a cost of €35 million, spent €5.6 million more than it raised in funding last year, raising questions about its long-term viability. The Dublin-based institute is already in talks with the Government about its strategy, The Irish Times has learned.

Media Lab Europe, which was a pet project of the Taoiseach set up in co-operation with the Massachusetts Institute of Technology in 2000, raised €2.56 million in funding in 2003 and spent €8.16 million on its operations.

Corporate sponsorship made up less than €2 million of the total funds raised, with the State supplying the remainder in a scheduled payment to the institute.

During 2002 and 2003, corporate fundraising was hampered by a difficult economic climate which forced certain firms, such as RTÉ and 360 Networks, to withdraw financial assistance. Originally it was intended that private funding would provide €10 million a year to support operations and research initiatives, which employ a staff of 66. But results filed this week show that if it maintains its current level of spending without attracting significantly more funding, the institute will run out of cash by 2006.

Media Lab Europe currently has cash reserves worth €9.5 million while operating expenses have totalled €8.16 million in 2003 and €9.4 million in 2002. It is understood it has made representations to the Government, however no decision has been made to supply more State funding.

"There are ongoing discussions between the department and its partner MIT in relation to the operation of Media Lab Europe and its future role," a spokesman for the Department of Communications confirmed.

It is understood that an expansion of Media Lab Europe to a new building, the Vathouse, on the Digital Hub site, has also been put on hold by the State.

Media Lab Europe would not comment on the publication of its financial accounts yesterday. The institute is one of the anchor tenants of the Digital Hub project, which is seeking to create a cluster of technology companies in the Liberties area.

Last year the firm announced it was exploring new ways to support its operations including applying for EU grants and teaming up with public organisations in Europe. This year it has only publicised one sponsorship deal - with AOL, the US internet and media company.

The value of the three-year agreement was not disclosed by the institute.

Prominent business people, technologists and celebrities sit on the institutes's board, including U2 guitarist The Edge, entrepreneur Mr Denis O'Brien and US technology guru Mr Nicholas Negroponte.

The institute's financial results also show that it paid its former managing director, Mr Rudy Berger, compensation for loss of office of some €394,124 in 2002.