Spain Props Up Public Broadcaster With Emergency Funds (Report)
MADRID — The Spanish government via the SEPI, which groups all of the state's public holdings under one umbrella, saved public broadcaster RTVE from bankruptcy by pouring €130 million ($177 million) into the debt-laden entity, according to a report in the Spanish daily El Mundo.
RTVE president Leopoldo Gonzalez-Echenique has publicly requested emergency funds to cover costs since he announced in May accumulated losses for the pubcaster of €716 million ($977 million) as of the close of 2013. More than 50 percent of the losses are due to depreciation in real estate value, according to the president, but RTVE's chronic deficit is more than €100 million annually.
While never particularly buoyant economically, RTVE was further crippled in 2009 when the government banned advertising on the public broadcaster.
The new finance model relies on Telcos and commercial and pay TV channels to dedicate 0.9 percent, 3 percent and 1.5 percent, respectively, of their revenues to finance RTVE, with a budget of around €900 million ($1.2 billion), including the taxes and the state subsidies.
In 2012, that amounted to roughly €217 million ($296 million) to RTVE, according to the Telecommunications Market Commission. As a result of the tax, Vodafone pulled out of the mobile TV business in order to avoid paying around €30 million a year.
The private TV channels are strongly against TV ads returning to RTVE on the grounds that the decision would seriously damage the TV ad market, reducing the ad pie by around €300 million ($409 million).
The cash infusion came with no strings attached, according to the El Mundo article, though Gonzalez-Echenique is expected to present a so-called efficiency plan next week that will cut costs at the pubcaster, which employs some 6,500 people.