Italy State Broadcaster RAI Returns to Profitability in 2013
RAI reported a modest $7.4 million profit in 2013, a dramatic turnaround from $278 million in red ink a year earlier.
ROME – Italian state broadcaster RAI eked out a small profit in 2013, officials revealed Friday, showing the results of a dramatic turnaround for a company that lost more than €200 million ($278 million) a year earlier.
RAI, which is not publicly traded and so does not provide detailed financial results, said it cleared €5.3 million ($7.4 million). Even though the profit margin is small, it is good news for the beleaguered company whose general director, Luigi Gubitosi, predicted a year ago that the company would start to show a profit starting in 2014.
Gubitosi -- who the local press nicknamed “Luigi Scissorhands” for his penchant for dramatic downsizing -- told reporters the profit was just the start of his plan to re-energize RAI amid tough competition from Silvio Berlusconi’s Mediaset and satellite broadcaster Sky Italia, a subsidiary of Rupert Murdoch’s 21st Century Fox.
Sky Italia does not report its financial results separately from the parent company, but Mediaset last month reported a modest profit of €8.9 million ($12.4 million) for 2013, an improvement from the company's first-ever full-year loss in 2012, when it finished €235 million ($327 million) in the red.
Gubitosi revealed that labor costs were reduced by 2 percent without any layoffs, thanks to voluntary redundancy plans. He said the company spent 26 percent less on productions and even cut telephone expenses by a third. All told, Gubitosi said external costs were €189 million ($263 million) less than when he arrived nearly two years ago.
He said the company still owned 40 percent of the free-to-air market and had aggressive programing plans in the works to help expand that. If the economy starts to grow this year as Prime Minister Matteo Renzi has forecast, a growing ad market could help grow RAI’s market further.