RTÉ confirms €20m deficit for 2016 in year of ‘onerous’ costs

Failure to reform licence fee collection is costing media sector jobs, says Dee Forbes

‘Much is now at risk,’ says RTÉ director-general Dee Forbes. Photograph: Nick Bradshaw.

‘Much is now at risk,’ says RTÉ director-general Dee Forbes. Photograph: Nick Bradshaw.

 

RTÉ has confirmed it made a loss of almost €20 million in 2016, a “financially difficult” year marked by “onerous” costs for special events and weaker than expected commercial revenues following the Brexit vote.

Director-general Dee Forbes, who took up her position in July 2016, said “uncertainty” surrounding the television licence fee system was now “making it almost impossible” for the broadcaster to plan ahead.

The net deficit of €19.7 million, recorded in RTÉ’s annual report, follows a €2.8 million deficit in 2015. A deficit of this magnitude had been unofficially flagged since last summer.

The broadcaster also recorded deficits for four consecutive years between 2009 and 2012.

Last year, RTÉ spent €16.1 million in its coverage of the general election, Euro 2016, the Olympic and Paralympic Games and the 1916 centenary celebrations, the annual report shows.

Excluding the impact of these “special events”, other operating costs rose €7 million to €327.3 million.

Total revenues, meanwhile, increased just €3 million to €337.3 million.

Income

Licence fee revenue for 2016 arrived at €179.1 million, up €200,000 on the previous year, which Ms Forbes described as “static” income.

Commercial revenues, which began the year well but faltered in the second half, came in at €158.2 million. This was up €2.8 million or 2 per cent on 2015, but RTÉ had started 2016 hoping to secure much higher growth in advertising income.

“Much is now at risk,” said Ms Forbes, who identified her “primary focus” in the coming years as the galvanising public and political support for the underlying concept of public service media.

“I am fully aware that RTÉ needs to change and constantly earn the trust and support of the public in what it does every day,” she said. However, reform of public funding is essential, she added, if RTÉ is to “renew its relevance with audiences” and thrive in the future.

“The persistent failure to reform the TV Licence system has and is costing jobs across the sector, is causing a stark reduction on Irish-made television programming, is threatening the provision of trusted news and current affairs and is having a stifling effect on the potential of the Irish broadcasting sector as whole.”

RTÉ employed 1,984 people in 2016, up 6 on the year before, the annual report shows. Some 278 of this number were part-time or casual staff.

In June, RTÉ sold almost nine acres of land at its Donnybrook campus for €107.5 million and a chunk of this money is now expected to be used to fund a programme of voluntary redundancies and retirements that could see more than 200 people leave the organisation.

Sale

The broadcaster is also expected to use part of the land sale proceeds to pay down a portion its debt. Net debt increased to €40 million as of the end of 2016, up from €25 million a year earlier, as the deepening deficit took its toll on cash flow and borrowings.

As of the end of 2016, RTÉ had bank borrowings of €57.9 million, up from €50.6 million a year earlier.

The director-general said the investment of proceeds from the land sale, combined with her plans to “reshape” the organisation, would “better equip RTÉ to meet the needs of our audiences in what is a very challenging market”.

RTÉ chairwoman Moya Doherty said achievements such as the growth of RTÉ’s digital services, its track record of investigative journalism and its widely praised coverage of the 1916 centenary had taken place against a backdrop of huge financial challenges.

“The board is continuing to work with the director-general to address these challenges, to help in the development of RTÉ’s new five-year strategy and the important evolution of Ireland’s national public media,” Ms Doherty said.