Pols pick up RTVE's $8.2 bil tab
Despite coin rescue, pubcaster's future still murky
|
More Articles:
Most Viewed:
Invictus(5710 views)Football player elbows vampires on Turkey day(3908 views)The Lovely Bones(1262 views)'Burn Notice' gets renewal(865 views)The costs of H’w’d spending(752 views)'2012' breaks B.O. record in Russia(709 views) |
The Spanish government announced it will transfer pubcaster RTVE's gargantuan debt to state accounts.
This is no nickel-and-diming. By the end of 2004, when the debt clearance supposedly takes place, RTVE's red ink will have hit e6.89 billion ($8.2 billion). Its assumption by the state will increase Spain's debt from 52% to 53% of its GDP.
As with so much Spanish media biz, the government's intervention has first and foremost a political reading.
Spain has a general election in March and Aznar's Popular Party came into power in 1996 promising to address RTVE's soaring debt.
It has finally ridden to the rescue -- but it had little choice.
The European Union's executive arm, the European Commission, objected to the government tucking RTVE's debt into the accounts of SEPI, a state-controlled company turnaround entity.
For RTVE itself, the state leg-up augurs a braver new world.
Spain's commercial broadcasters and press were harping on last week about RTVE balancing its budget.
For the short-term, that's whistling in the wind. A zero deficit will save $306 million in financial costs each year, but RTVE's estimated losses for 2004 run to more than double that at $742 million.
"RTVE will probably now go several ways," says one analyst. "It will try to pink-slip some of its 9,000 staff, prune its acquisition budget for U.S. movies and soccer, and cut production costs."
In October, RTVE television director Juan Menor revealed that he had slashed coin spent on U.S. movies by 52% to $48.8 million in 2003. RTVE is sitting on the fence about acquiring Spanish soccer league match rights.
Tightening RTVE's fiscal reins will at least concentrate management minds, curbing account fudging.
Yet an end to RTVE profligacy is one thing, its future as a pubcaster is another.
A debt-free RTVE is a distant hope when compared to, for example, U.K. pubcaster the BBC, which collects $4.3 billion a year in license fees from homes with TV.
Spain has no license fee. If RTVE continues to depend on advertising revs and petty hand-to-mouth subsidies, its future looks diminished. It will be able to afford less quality programming -- which is the reason for its existence in the first place.
