“For every €160 in licence fee we received from you in 2011, not only did we spend all that but we ran up an extra €61 in losses which we are funding with bank loans” The RTE promotional advertisement that you’re unlikely to hear, but with total losses of €69.7m in 2011 after receiving €183.6m in licence fee income, RTE spent ALL the licence fee and ran up losses equivalent to €61 for each of the 1,148,000 homes that paid €160
“Today, tomorrow, together” reads the strapline to a new RTE self-promotion advertisement launched in the same week as an “independent” PwC report into RTE’s finances was published, which concluded that against all odds, with vertiginous declines in domestic revenue and with shoe-string budgets compared to TV companies in other (bigger) markets, RTE is still the most trusted media outlet, or at least it was in 2009 which appears to be the most recent research into the matter! Add in the RTE Director General’s claim that presenters face 40% salary reductions- though old media reporting omitted the rider that their salaries have already been reduced by 30% so the additional reduction is just 10% – and we appear to have something worthy of the Moscow rules : once is chance, twice is happenstance and thrice is enemy action.
And the “enemy action” in this case is the imminent release of RTE’s financial results for 2012. The old media has been talking for a couple of months about what it calls a “deficit” of €50m for 2012. But the old media ignores losses in the RTE pension fund, and unlike Aer Lingus, if there’s a deficit in RTE’s pension fund, ultimately you and I pay for it. In 2011, that pension fund loss was €49.7m, it is not likely to have gotten better in 2012! Remember RTE had revenues of €350.9m in 2011 comprising licence fee income of €183.6m and commercial revenue of €167.3m. Here is the comprehensive statement of loss for 2011 – the old media will focus on the deficit of €16.8m but the truth is RTE ran up losses that total €70m
So, it would appear we are being softened up ahead of the release of the worst financial results in RTE’s history. These will contrast with TV3 which lost €6.8m in 2011 and TG4 which recorded a total recognized gain of €109,000 in 2011 and UTV which recorded a total recognized gain of GBP 2.998m for the first six months of 2012.
Maybe Richard Curran, brother of the RTE director general – pictured above – might do a special investigation on the putrid mismanagement of an organization TODAY, not 5-10 years ago as was his archaeological piece on Irish Nationwide recently. If we want a pantomime villain, we don’t need to hear about golf balls and stays at the Dorchester half a decade ago. We have a presenter in a broadcasting company being paid €630,000 per annum, RIGHT NOW.
RTE was supposed to have produced a 5-year strategy document by the end of 2012 which would show how the broadcaster was going to return to break-even. We’re still waiting but we had this flim-flam from PwC this week which boils down to “RTE does a fantastic job with limited resources”. Meanwhile these are the recently released presenter salaries which are misleading for 2012 as they don’t refer to final earnings.
It seems that RTE has become a disaster zone, with libels and incompetence overseen by incapable management, and this is reflected in that organisation’s financial results. RTE still employs nearly 2,000 people and supports jobs and industry across independent producers and suppliers; it is a major business. But the time has come to call a halt to delusional management that is sinking the organization deeper into a quagmire which will ultimately need to be bailed out by the State. And Noel Curran is fobbing us off with flying a kite about a reduction in 65-year old Pat Kenny’s salary from €630,000 to €570,000?!
And finally, just to really put you in a bad mood, this is the schedule of today’s programming from the UK’s Freeview service, digital free to air service (in Ireland the standard licence fee is €160 per annum, in the UK it is GBP 145.50 or €171)
And here’s Saorview on Sunday 21st April, 2013
NAMA Wine Lake 
” In 2011, that pension fund loss was €49.7m, it is not likely to have gotten better in 2012!”
[Note 19, RTE account, 2011]
The ‘fair value’ of the DB pension fund was 775 million, against DB ‘obligations’ of 823 million, a deficit of 48 million, which has been recorded as a loss and a liability to RTE, and by extension to the State, the majority of whose citizens have no pension scheme, never mind a DB pension scheme.
The shortfall above is 6%. Why should people who have no pension scheme be compelled to fund a 6% shortfall in the ‘legitimate expectations’ of RTE DB members, a scheme that was closed to new members in 1989.
The government should simply have refused to accept the accounts. The DB ‘benefits’ should be frozen at current ‘fair value’ levels, and the present and future beneficiaries should live off whatever is in the pot.
There would still be a hell of a lot more in the pot for them than there will be for other citizens, many of whom will have no pension pot at all.
@NWL
The above quote was from your article, of course!
The information and figures I referenced were from Note 19 RTE accounts 2011.
@ NWL
In relation to the historical RTE pension, i.e the fund that is closed and holds most of the liabilities, this has been in surplus up until 2010 and assuming average returns for 2012 will be back in surplus. I can’t see what the issue around it is…. The liabilities have bounced about based on the vagaries of FRS 17, with the assets suffering similar movements based on market conditions
The assumptions taken, life expectancy etc are extremely conservative and were adjusted upwards again in 2011 for both future retirees and current pensioners. The increase in the projected life expectancy for the men in membership of the scheme, whether retired or not is particularly striking. See Note 19 of the accounts.
@Niall, communications minister Pat Rabbitte was twice asked about the pension deficit in RTE in 2011 and in March 2013, the parliamentary question was disallowed by An Ceann Comhaire, you can see his response here:
https://namawinelake.wordpress.com/2013/03/27/time-to-place-rte-in-examinership-after-utter-disgrace-of-rte-salaries-when-it-is-making-e70m-loss-a-year/
We know that RTE has been offering redundancy to staff, and my opinion is that a large part of the loss in 2011 is down to these schemes. If the fund swings back in 2012, we’ll know, but as things stand in 2011, that loss is real given the RTE liability on the DB scheme.
Once the TV license fee becomes mandatory, it can be increased dramatically, let’s say up to 250 euro per year.
After paying your license fee, you will be subjected to RTE propaganda advertising as to why the increased TV license fee is worth it.
How can RTE possibly justify these finances? Surely there must be a wealth of performers who would be happy to appear for far less than €150k, nevermind these insanely huge salaries.
[…] an interesting snippet from the ever-vigilant NAMA Wine Lake. Guess which TV station was the only television broadcaster in Ireland to make a profit in 2011? […]
The fact you have twice posted that setanta is on Saorview, when it isn’t, makes me wonder what other factual errors you make.
On the other hand it might be worth investigating how much of the license money goes to orchestras and how much their expenses tax free allowance from Revenue Comm. are
@Colm, both errors now corrected though it doesn’t change the point being made, that our TV service is tiny compared to our neighbours in the UK.