Italy's RAI Nets Small Profit of $5.4 Million
The struggling state broadcaster scores a minor financial victory, but it's not out of the woods just yet.
ROME – After five consecutive years of bleeding cash, troubled Italian state broadcaster RAI announced it ended 2011 in the red, with a slim profit of €4.1 million ($5.4 million).
The financial results, which were voted on by the company’s board on Wednesday and published Thursday, were welcome news for the company but they did not mean it was out of the woods. The profit came mostly from dramatic cost-cutting late in the year, which will result in less original programming over the course of 2012. And, in any case, the profit is tiny compared to the company’s budget of more than €1 billion ($1.3 billion) per year or its reported losses of nearly €200 million ($262 million) the year before.
Approving the 2011 balance sheet was the last official act of the nine-member RAI board, which collectively resigned just after the vote. The board is elected each time for a three-year term, which just expired. A new board will be appointed before the next board meeting, set to take place May 4.
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Earlier this month, RAI endured criticisms from long-time RAI presenter, who said the current incarnation of the once-proud state broadcaster "sucks" and said it desperately needed the leadership of an expert turnaround artist like Sergio Marchionne, the Ferrari executive credited with reviving Italian automaker Fiat.
Meanwhile, indications from Italy’s technocratic government led by former European Commissioner Mario Monti are that the cutbacks at RAI could continue, though some reform efforts have run into political opposition led by the coalition that includes Silvio Berlusconi, who preceded Monti as prime minister and whose media giant Mediaset is RAI’s chief rival.