RTÉ underspends its way to balancing the books

Last year’s light schedule might not be quite the ingenious solution it seems

In timing that can be considered awkward, RTÉ made a rare surplus last year, according to an independent financial analysis commissioned by its trade union group. The official accounts will not be published for some months.

For the management, which is currently insisting that temporary pay cuts affecting those who earn €40,000 or more are necessary to stabilise the broadcaster’s finances, the use of an estimated surplus of €5 million in 2020 to imply that everything is fine and stable is deeply unfortunate.

No wonder director-general Dee Forbes, in an interview with Richard Curran on RTÉ Radio 1 on Saturday, sounded gloomy about the prospect of heading to an industrial relations tribunal should staff reject its proposals.

The numbers suggest that without the injection of €6 million in additional Government funding from the Temporary Covid-19 Wage Subsidy Scheme (TWSS) – for which RTÉ was approved last spring when the advertising market was plunging dramatically – it would have been deficit time as usual. Revenue from public advertising campaigns will also have partially offset the loss of other advertisers’ income.

But there is another factor behind the balancing of the books: unrepeatable underspending.

Production stoppages

Not only was the cost of Euro 2020 and Tokyo 2020 helpfully taken out of the equation last year, so was several months' worth of normal TV commissioning business. At one point, Macalla Teo's Home School Hub, VIP's Operation Transformation: Keeping Well Apart, and Indiepics' Ireland on Call were the only independent shows in production.

As a result, RTÉ is understood not to have met its statutory minimum spend of €40 million on independent television and radio commissions, falling short of it by about €2 million.

The key word here, however, is statutory. The legislation allows it to carry over any shortfall in spending to the two financial years that follow, but that’s about it. Meanwhile, Euro 2020 and Tokyo 2020 – as they are still officially known – both look like they will be back with a vengeance, weighing on its 2021 expenditure.

Spending less – including spending less on programmes – has long been put forward as the obvious answer to RTÉ's financial woes by commercial rival Virgin Media Ireland, which has its eye on a bigger share of the market.

But others, from licence-fee payers to independent production companies, will regard this particular solution as less than ideal.