RTÉ has been warned by the Minister for Communications, Mr Ahern, that running a deficit for 2003 "is simply not sustainable".
In a confidential letter sent to RTÉ chairman Mr Paddy Wright, the Minister tells the State-owned broadcaster that, after getting a licence fee increase in December 2002, producing a loss in 2003 "would send the wrong signal".
The letter, sent at the end of May, has been released under the Freedom of Information Act, following an internal review.
RTÉ has been experiencing serious financial difficulties in 2003 because of a global downturn in advertising. According to evidence given before an Oireachtas committee in July, the station's deficit is €13.5 million. The company has also lost revenue because of a disagreement with multinational firm Procter & Gamble over advertising rates.
However, outgoing director general Mr Bob Collins and chief financial officer Mr Conor Hayes have insisted cost savings will be made across RTÉ in the second half of the year and a surplus of about €3 million will be produced.
In the letter, which the Department of Communications originally refused to release, the Minister states: "Should commercial revenue and licence fee revenue continue to be lower than budgeted for, then clearly RTÉ will have to take further action.
He adds: "While it is a matter for RTÉ to manage its finances, it is clear that running a deficit on a year-on-year basis is simply not sustainable. Furthermore, in light of the substantial increase in the licence fee and the implementation of the change management programme, running a deficit this year would send the wrong signal."
It is understood that, since the letter was sent, the Department has set up a line of communication with RTÉ so it can be kept informed of the financial situation.
The Minister's letter also refers to the issue of a commercial television licence for pubs and hotels. He says he is still pondering the idea that pubs and hotels should pay a separate licence fee but revenue is unlikely to come from this source for some time.
Mr Ahern does not appear to be the only concerned observer of RTÉ's financial situation. In another letter released under the Freedom of Information Act, Mr Ciarán O hóbain, a senior official in the Department of Communications also raises concerns.
"While it is a matter for RTÉ to take decisions on its own finances, running an unplanned deficit this year would clearly be a bad result and would send the wrong signal," he says in a letter dated May 16th.
In a memo sent to Department private secretary Mr Eamonn Confrey, Mr O hóbain says: "It is considered important that the Minister reply to the chairman clearly signalling that RTÉ should address the situation it now faces. It is difficult to see how RTÉ can turn things around without reducing costs."
