The drama heats up at Montrose

Sat, Jun 13, 2009, 01:00

FOR FIVE years RTÉ never had it so good. The national broadcaster, like the nation itself, lived the high life, buoyed by a generous licence fee settlement and a cascade of advertising revenue.

Faced with the perennial complaint that the failure to agree a substantial licence fee increase was putting RTÉ’s future viability in question, the Government finally acceded in 2002 to a €43 increase in the licence fee, from €107 to €150.

The settlement coincided with years of largesse, as advertising revenue recorded double-digit growth. In 2007, RTÉ generated €245 million in commercial revenue and recorded a €26.5 million surplus.

That year is now like ancient history for RTÉ and for the rest of us. After the boom comes the gloom, after the record surplus comes the record shortfall, after the gain has come the pain.

As its own journalists were reporting on the collapsing economy, RTÉ’s television advertising revenue fell off a cliff in the first quarter of the year, down 34 per cent. Commercial revenue will be a projected €184 million this year and licence fee revenue, usually a constant in good times and bad, will be down €8 million.

“Management are not making it up. The pattern of decline in advertising revenue conforms to declining patterns in the economy generally,” says troubleshooting auditor Eugene McMahon from Mazars, who was asked by trade unions in RTÉ to look at its books.

The parallels between Ireland Inc and RTÉ are all too apparent, and so too is the dilemma presented to staff, who have been facing a crucial ballot to vote through pay cuts.

Staff are being asked for pay cuts ranging from 2.6 per cent for those earning over €25,000 a year to 12.5 per cent for those earning more than €255,000 a year.

RTÉ needs to make up a €68 million shortfall in revenue this year and €10 million will come from staff, a “disproportionately low” level, says director general Cathal Goan, given that wages are half the cost of running RTÉ.

The stakes are high. The Trade Union Group (TUG), which is made up of members of the National Union of Journalists (NUJ) and Siptu, was told that the broadcaster would run out of wages to pay staff by September if cutbacks were not implemented.

RTÉ management was particularly exercised by media reports that extrapolated from that remark that the station would soon be bankrupt.

“If you’re driving towards the edge of a cliff and you don’t turn the wheel, you’ll go off. We are turning the wheel,” says RTÉ’s head of corporate communications, Kevin Dawson. “There is no crisis in RTÉ. There would be one if we were not dealing with the enormous challenge of balancing the books, but we are doing that.”

Viewers and listeners might have feared for the programming output when it was announced last month that the RTÉ1 afternoon programme Seoigewould be axed because of budgetary constraints. Lesser-known programmes have also been axed, and the company has looked for cost savings of between 5 and 10 per cent across the board in programme-making.

“Through all this we have gone for surgical paring not amputation,” says Dawson. “This is the absolute keynote of all we’re doing at the present time and the fact that the public are having to ask when we will start to see cutbacks shows just how effective it has been to date.” The results of the ballot will be known early next week, shortly after voting concludes. The outcome is anybody’s guess.

“At the beginning I would say it was an 80 per cent no, but it is going to be a lot closer,” says one member of staff who did not wish to be named. “There is a lot of fear and worry and trepidation that there is a list of people being drawn up for redundancy.”

BOTH SIDES HAVEbeen putting up posters in the dead of night around the RTÉ campus. “We’ve heard all the excuses and none of them work,” says one, echoing the slogan of the TV licence advertisements and advocating a no vote.

While the public at large were exercised by the huge salaries paid to RTÉ presenters such as Pat Kenny and Gerry Ryan, internally the big issue has been bonuses paid to RTÉ’s management.

Such performance-related bonuses were stopped in 2008, when RTÉ first projected a looming revenue shortfall for the year. In a circular sent to staff this week, director general Cathal Goan promised they would be restored only after staff salaries are increased, but it has not neutralised the issue.

For the no side, the issue of management perks won’t go away. “We’re not against pay cuts. We know we’re going to have to suffer and take the pain a bit, we just want it in an equitable way,” says one long-serving member of staff who wants more information about other perks, such as car allowances and executive pensions.

As in many industrial disputes, the no side has been the most vociferous and the best organised, but lately posters have been appearing advocating a yes vote. “I’m voting yes, I’ll worry about the bonuses tomorrow,” says one poster. “Vote yes, Cowen and Ryan won’t bail us out,” says another.

“The feeling is that this is a better deal than what was originally proposed. The lower paid are better protected,” says RTÉ reporter Laura Fletcher, who stresses she is speaking in a personal capacity and not as mother of the NUJ chapel within RTÉ. “The bonuses are gone. That was an issue that really aggravated people.”

An issue that aggravated the members of the Oireachtas Committee on Communications, Energy and Natural Resources, was the inflated salaries paid to the top RTÉ presenters in good times. Goan, who appeared in front of it on Thursday to discuss RTÉ’s financial position, was left in no doubt that top presenters’ salaries and a request for an increase in the licence fee, currently lodged with Government, are unacceptable in these straitened times.

The issue of presenters’ salaries is regarded as a “serious distraction” by management, given that even swingeing cuts to their pay would hardly make a dent in the station’s deficit, but the optics are troublesome, to say the least.

Goan appeared to indicate that the 2007 figures, which are due imminently, will show even greater largesse being showered on the top talent. He says there will be an “amount of hysteria” about it.

He sounded exasperated when he told committee members that he would not deal with the issue any more.

“It will be about 2007 and not 2009. I’m not going to say any more about the fees of top talent because they are confidential,” he said, though it did not stop chairman MJ Nolan probing further. “We, as members of the Oireachtas, have been criticised because our Taoiseach is earning more than Barack Obama. On the basis of the information that you are giving to me there are clearly people in RTÉ earning far in excess of what Barack Obama is earning.”

“What I can tell you, I’ll tell you, what I can’t, because it is personal information, I won’t,” explained Goan, who did admit that six presenters earn more than €300,000 a year.

Earlier this year, RTÉ’s top 10 presenters volunteered a 10 per cent pay cut, though in the case of Gerry Ryan it was a protracted affair.

There has been no request for a further contribution. “I wouldn’t be found wanting if I was approached again,” said Prime Timepresenter Miriam O’Callaghan, who was one of the first of the best-paid presenters to volunteer a pay cut.

“It’s a difficult time for everyone in here. The mood here reflects the mood of the whole country. There’s a lot of worry and concern and I think there is a reality check. We realise we are in financial dire straits.”

THERE IS Ageneral realisation among staff about the financial state of the organisation, but it is not clear it will translate into a yes vote.

The no side maintains that extracting information about management perks has been like pulling teeth and more concessions can be wrung from them with a no vote.

The TUG has not formally advocated a yes vote, though its circular – which states that union concerns “are reflected in the amendments accepted by RTÉ management” – is unambiguous, as is its statement that what is on the table is management’s final offer.

The consequences of a no vote are unclear, but it has been noted on all sides that the savings requested are the equivalent of 200 jobs.

“When have made that decision, we will deal with the consequences of it,” said Goan, who rebuffed repeated questions from Fine Gael TD Michael D’Arcy as to whether a no vote meant redundancies.

“In a nutshell, if the pay cuts do not come to pass, will you potentially have to consider other options?” D’Arcy asked.

“All I say is, we will achieve the savings we have identified,” replied Goan.

“And, if you don’t?”

“We will achieve the savings we have identified.”

Scaling Back How RTÉ Is Making Savings

The programmes Seoige, Pobal, Class Act, Colm and Jim Jim’s Home Run, The Symphony Sessions, European Dance and Moto GP have all been axed.

RTÉ News and Current Affairshas taken €2 million from its operational budget. It has closed its bureau in Beijing – from which foreign editor Margaret Ward (right) operates – at a saving of €75,000 a year.

Reporters on foreign assignments send by internet link and not by satellite.

Prime Time Investigateshas been reduced from eight programmes a year to six.

The AXA Dublin International Piano Competitioncoverage has been moved from live broadcast to a documentary.

Production values on sports programmessuch as The Road to Croker, Premiership football, boxing and horse racing have been scaled back.

RTÉ has requested a 7-10 per cent reduction in costs from the independent television sector, which produces half of all home programming. RTÉ has put a floor under advertising ratesto stop the downward spiral – changing from a floating price, based on supply and demand, to a fixed-price mechanism. Ad breaks per hour will be reduced from 7.5 minutes to six as a result.

It has reduced staffing levelsby means of non-replacement of staff and reductions in freelance activity – including cover for those on leave.