RTE’s Financial Challenges and Director’s Warning
RTE, the national broadcaster in Ireland, is grappling with a significant financial challenge, but its director general, Kevin Bakhurst, has clarified that it is not on the brink of bankruptcy. Bakhurst addressed members of a parliamentary committee in Dublin, emphasizing the need for a new long-term funding model for public service media to secure RTE’s future.
To cope with its financial difficulties, RTE has implemented an immediate recruitment freeze, allowing new staff only under exceptional circumstances, and has halted discretionary spending due to declining revenue from TV licence fees, following controversies over the summer.
Cost-Saving Measures and Considerations
Bakhurst outlined various cost-saving measures, including reducing the salaries of top-earning presenters and considering the sale of RTE’s Montrose site in south Dublin. While he couldn’t rule out compulsory redundancies, he expressed a preference for slimming down the organization through voluntary exits. However, he noted that voluntary redundancy schemes were costly, and RTE lacked the funds to run one.
The crisis at RTE began when it was revealed that it had not correctly declared fees to its highest-paid earner, Ryan Tubridy, between 2017 and 2022. Subsequently, other financial and governance issues came to light.
Financial Projections and Government’s Role
RTE had initially requested 34.5 million euros in additional interim funding from the Irish government for the next year. However, it faced a further revenue gap of 21 million euros by the end of the year due to declining TV licence payments, on top of a budgeted deficit of seven million euros for 2023. Better-than-expected commercial revenue intake will help offset some of the shortfall, but not all of it.
The government has not yet decided on additional funding for RTE but has emphasized the need for significant internal reform in exchange for any investment.
Transformation Plans and Funding Concerns
Bakhurst, determined to transform RTE, intends to provide a strategic reform framework in October and a full strategic reform and transformation plan by year-end. He emphasized that these reforms would be in jeopardy if the funding issue for public service media in Ireland is not properly resolved. He argued that the TV licence system and associated legislation were no longer suitable to support public service media.
Taoiseach Leo Varadkar pledged to address the public service broadcasting funding model in the longer term through legislation and implementation by 2025.
Managing Cash and Presenter Salaries
Bakhurst is actively managing RTE’s cash flow and announced a downward trajectory in presenter salaries. He stressed that while RTE faces an extremely challenging financial situation, it is not on the brink of bankruptcy. He called for real and radical change at RTE to better reflect all of Ireland and its diverse audiences across various platforms.
RTE’s board chair, Siun Ni Raghallaigh, acknowledged the organization’s precarious situation and the erosion of public trust. She highlighted the urgency of resolving these issues and securing RTE’s future.