Explainer: What is a barter account? 

RTE board members and executives (left to right) RTE Director of Legal Affairs Paula Mullooly, RTÉ Interim Deputy Director General Adrian Lynch, Strategy Director Rory Coveney, RTÉ Commercial Director Geraldine O'Leary, Chief Financial Officer Richard Collins and former Chairperson of the RTÉ board Moya Doherty.

In the latest twist in the ongoing RTÉ payments saga, it has been revealed that the broadcaster has three barter accounts and not one as had previously been claimed.

Here we explain what a barter account is and how RTÉ used them.

What is a barter account?

Bartering involves the trade of goods and services for other goods and services. For example, a mechanic could provide services to a website-building company in exchange for a website.

Typically, a barter account is where a company records these trade transactions.

Businesses earn trade credits as opposed to cash and these are deposited into their account. These credits can then be used to purchase goods and services from other members utilising their trade credits.

Accounts for barter transactions are often operated by brokerages that charge fees.

Barter transactions are common among media organisations as they can trade advertising space for services rather than spending cash.

In the case of RTÉ, the broadcaster said barter accounts are solely used in the context of its commercial activity of selling advertising airtime.

Barter has become an effective method of increasing sales, conserving cash, and making use of excess production capacity.

How has RTÉ used its barter accounts?

The national broadcaster has said that the accounts are used solely in the context of its commercial activity of selling advertising airtime.

"A barter account may be used for the purpose of hospitality and entertainment in relation to advertising clients/media agencies to ensure that RTÉ can continue to increase its advertising revenue and to retain it going forward," RTÉ said in a written statement.

Traditionally, ad campaigns would be paid in cash but barter campaigns are billed 50% in cash and 50% in credit.

The transactions are priced at 65% of the face value which allows for discounts and the fees charged by the bartering company.

During the 10-year period between 2012 and 2022, RTÉ said it spent an average of approximately €150,000 per year on client entertainment/hospitality which was paid for through the barter account.

In the same period, RTÉ used approximately €1.6m of barter account revenue for client entertainment and corporate hospitality.

The broadcaster said the practice of using barter accounts "does not impact on licence fee revenue in any way, nor is any spending on client hospitality/entertainment derived from licence fee income in any way".

If this is a common practice, what is the issue with RTÉ using a barter account?

The initial issue in relation to RTÉ's barter accounts was that one was used to make two undisclosed payments worth a total of €150,000 to presenter Ryan Tubridy.

The two payments were made through the barter account despite the fact that the commercial partner was no longer involved.

Cash payments from a barter account involve a 35% additional cost and so the €150,000 paid to Mr Tubridy resulted in a total cost of €230,000. The payment was made after a commercial agreement with Renault to pay Mr Tubridy €75,000 per year from 2020 was underwritten by RTÉ.

Last week, chief financial officer Richard Collins told the Public Accounts Committee (PAC) that €1.25m went through barter accounts in the last 10 years.

The controversial barter account was used to pay €111,000 spent on trips to the 2019 Rugby World Cup, €138,000 on a number of 10-year IRFU season tickets, and €26,000 on a trip to the 2019 Champions League Final in Madrid.

There was further controversy on Tuesday night when it was revealed that RTÉ has a total of three barter accounts.

Mr Collins had flatly denied the existence of any additional accounts when asked directly during his appearance before the PAC.

What do we know about the additional accounts so far?

Details of the three barter accounts - named Astus, Active and Miroma - show that in 2022, €300,739 was spent in total regarding the tripartite deal struck between the Mr Tubridy, RTÉ and Renault to ensure payments of €75,000 per annum to Mr Tubridy over three years.

RTÉ was also found to have spent:

• €26,000 on Bruce Springsteen and Ed Sheeran concerts 
• €23,100 on 36 tickets to the 2016 Champions League Final 
• €32,200 on a ‘cinema’ expense labelled ‘RTÉ Sport no other detail’ 
• €53,700 on RTÉ’s new season launch in August 2018 
• €21,000 on RTÉ’s client summer party in August 2016 
• €33,400 on two golf outings held for clients at Powerscourt Golf Club in 2016 and 2018