RTÉ’s €8.6m funding increase questioned by rival Virgin Media

Department of Communications boost for broadcaster follows regulator’s warning

RTÉ will receive €8.6m more as a result of Budget 2019. Photograph: Cyril Byrne / The Irish Times.

RTÉ will receive €8.6m more as a result of Budget 2019. Photograph: Cyril Byrne / The Irish Times.

 

RTÉ will receive additional funding of €8.6 million as a result of Budget 2019, according to Minister for Communications Denis Naughten.

Virgin Media, the owner of RTÉ’s rival Virgin Media Television, said it would “seek clarification” about how the extra revenue would be spent, saying it wanted to “ensure it doesn’t further distort the overall television market”.

The majority of the funding increase comes from the Government’s decision to raise by €5 million the cap on the sum the Department of Employment Affairs and Social Protection pays the Department of Communications in respect of the free television licences to “better reflect” the cost of the scheme.

Free licences are received by some 430,000 households as part of the household benefits package, which is mostly awarded to older people.

The cap on the payment was cut by €5 million in Budget 2014. The Government began to reverse this move over the past two years, however even with the latest increase, the total does not cover the “true value” of the licences issued, Mr Naughten said.

His department receives some €60 million from the Department of Employment Affairs and Social Protection in respect of free television licences. However, the value of the licences issued is €68 million, the Minister said.

The remainder of the boost to RTÉ’s funding has been achieved by switching a further portion of TG4’s funding from the licence fee back to direct exchequer funding, the Minister said.

RTÉ received €186 million from licence fee receipts in 2017, its annual report shows.

Rival response

In a statement, Virgin Media said it believed RTÉ “should be held accountable for losing €30 million in the last three years”, despite combined public and commercial revenues of more than €1 billion in this period.

“Additional funding without any conditions is a reward for RTÉ’s inefficiencies to the detriment of the independent broadcasting sector.”

RTÉ has recorded operating deficits in seven of the last nine years. Under both current director-general Dee Forbes and her predecessor Noel Curran, it has campaigned consistently for higher public funding and pushed for licence fee reform.

These calls have followed a collapse in its commercial revenue over the past decade - the result of sweeping media market changes that have also affected Virgin Media Television and other media groups.

The Broadcasting Authority of Ireland recently warned that RTÉ needed an “immediate” increase of €30 million and TG4 some €6 million in their annual funding in order for both public service broadcasters to continue carrying out their statutory remits.

TG4’s funding was maintained at its current level by the Minister in this budget.

Mr Naughten said the Broadcasting Fund, which is administered by the Broadcasting Authority of Ireland , would rise by €647,000 in 2019. This fund is used to distribute money to independent production companies for films and television programmes commissioned by broadcasters and also to encourage the preservation of audiovisual archive material.

Overall, his department’s allocation for broadcasting in 2019 is €265 million, up €9.5 million or 4 per cent on 2018. The amount had been cut by 2 per cent in the previous budget.