NHK under fire for affiliate surplus

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TOKYO -- Public broadcaster Japan Broadcasting Corp. (NHK) was criticized in parliament by the Japanese government's Board of Audit on Wednesday for an ¥88.6 billion ($775 million) surplus earned by its affiliates in 2006.

The excess earnings relate to work subcontracted to the affiliates by NHK. The report states that NHK had invested money in 21 affiliates that were run as private companies and often staffed by ex-NHK employees.

The surplus remained after dividend payments were made to the affiliate companies, including to NHK. The broadcaster claims the profits are in line with those in the private sector.

NHK is a public broadcaster with multiple channels and three radio stations, which are covered by a basic monthly subscription fee of 1,345 yen ($11). It also has three satellite channels which require a separate and optional monthly fee.

The Board of Audit called for more of the money to be returned to NHK through dividends and for that to be used to finance a reduction in monthly subscriber fees.

NHK already had been facing calls for cuts in its fees from the public and Japan's Communications Minister Yoshihide Suga after it announced profits of ¥23.4 billion ($195 million) for last year.

NHK collected ¥613 billion ($5.3 billion) in fees last year and is under pressure to cut its monthly dues by up to 20%. NHK has proposed a 7% cut.

"As long as NHK's major source of revenue is its subscription fees, it should save more costs by not providing excess benefits to its affiliates," the board said in its report.
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