RTE €65.2m in the red for 2012

RTE has confirmed it was €65.2m in the red last year following a major restructuring of the company.

As the state broadcaster insisted it is on target to break even in 2013, Communications Minister Pat Rabbitte warned he would keep a close eye on its finances.

A statement from the minister’s department said he had made it clear RTE must return to stability this year.

“He considers that RTE will continue to operate in a challenging financial environment, particularly in the increasingly fragmented and competitive advertising market,” it said.

“He is concerned by the continuing decline in commercial revenue and his department is closely monitoring the financial position of RTE on an on-going basis.”

The net deficit emerged in the broadcaster’s annual report for 2012, which also revealed an operating profit of €2.2m.

Much of RTE's deficit was due to a one-off €46m restructuring charge.

This funded an overhaul of the company’s operations, which was aimed at ultimately reducing the company’s cost base.

RTE said the €2.2m operating profit was made in spite of further reductions in revenue in 2012 and was driven by reductions in operating costs of €18.4m.

Director-general Noel Curran insisted that while the company restructuring had been difficult, it will enable RTE to return to stability in 2013.

“Although the restructuring has contributed to the deficit for 2012, I remain confident, notwithstanding a very difficult market environment, that the changes we have implemented have stabilised the financial base of the organisation,” Mr Curran said.

“Crucially, throughout this very difficult period RTE has continued to deliver for audiences across all its services. That must always be our primary focus.

“To do so we must continue to manage our costs and sustain and grow revenues through what remains an extraordinarily difficult period for all media organisations in Ireland.”

Cost-cutting measures, such as staff pay cuts, have been in train since 2008.

The major restructuring process that got under way last year is expected to drive RTE’s cost base down this year to 30% lower than it was five years ago.

It was reduced by €104m between 2008 and 2012.

Almost 500 staff have left the organisation since 2008 – 270 of those left in 2012 under the company’s voluntary exit schemes.

RTE Board chairman Tom Savage said the changes last year had led to a “smaller, restructured RTE”.