RTÉ could be facing further financial trouble only six months after being awarded a major licence fee increase.
Unless the station cuts costs or brings in more advertising revenue in the second half of 2003, it is in danger of slipping back into deficit and possibly needing extra licence-fee revenue to cover the shortfall.
A spokesman for the Minister for Communications, Mr Ahern, said last night the station was entitled to seek a licence-fee increase in line with inflation this year, but any increase in excess of this would not be sanctioned for at least five years. Late last year Mr Ahern granted the station a €43 increase in the licence fee.
The station has also expressed major fears about a new BBC satellite service which is due to broadcast into Ireland "unencrypted" and free from July 10th. This service will allow Irish consumers once they buy a satellite dish to access up to 90 channels free.
RTÉ management is concerned that viewers will lose the habit of watching RTÉ channels because of the new service. However, its impact is expected to be more long-term than immediate. The station said yesterday that Government or EU intervention might be needed on this issue.
The warning about the station's finances came in the annual report and results for 2002, which showed the group losing €56 million, with €35 million of this relating to restructuring at the station.
The chairman, Mr Paddy Wright, said, however, that despite the licence-fee increase RTÉ's financial pressures had increased into 2003.
Because of a worldwide drop in advertising revenue, the station was facing a tough year. "It is difficult to forecast how this will evolve over the year, but it is quite clear, at the end of the first quarter, that the negative impact will be significant", he said, citing the war in Iraq as one of the main causes for the advertising downturn.
The station's director-general, Mr Bob Collins, who is leaving the station shortly, also referred to potential financial problems in 2003. While the station faced the current year with "greater optimism" its aim to produce a modest surplus would be severely tested by the adverse conditions in the early part of 2003, he said.
Management accounts obtained by The Irish Times recently showed the station was running a deficit of €2.1 million for the first two months of the year. The station had budgeted for a surplus of €3.1 million for this period.
While advertising revenue has been sluggish, the other source of income - licence-fee revenue - has also been patchy, with the number of licences sold in the first two months falling below target. Sponsorship income has also come under pressure.
A spokeswoman said the station remained determined to generate a surplus of about €3 million for the year and this would have to come from higher licence-fee income, cost control and better licence-fee collection.