Italian State Broadcaster Could Be $850 Million In The Red By 2012
Broadcast and cinema giant RAI may have to consider selling its historic Rome headquarters
ROME -- According to the latest in-company projections, the red ink for Italian state broadcaster RAI is expected to rise dramatically over the next two years, reaching as much as €600 million ($850 million) by the end of 2012, forcing the broadcast and cinema giant to consider selling its historic Rome headquarters.
RAI's board is holding a series of meetings this week to explore options for its future. According to Wednesday's editions of Corriere della Sera, Italy's largest newspaper, one option on the table is selling off the company's massive headquarters on Rome's Viale Mazzini, possibly renting the building back from the new owner for continued use.
This year, RAI is expected to finish at least €120 million ($170 million) in the red, due to drop offs in advertising and in revenue from the "canone," the annual television license fee, combined with rising production, acquisition, and administrative costs.
But the debt figure is projected to balloon over the next two years, totaling as much as $850 million by the end of 2012. If it is indeed reached, that figure is significant because it would surpass RAI's capital reserves of €550 million ($780 million), casting in doubt the company's ability to meet payroll obligations in 2012.
Strategies for avoiding financial problems over the next two years are expected to emerge in the coming days.