Study: Labor Costs an Achilles Heel for Cash-Strapped Italian State Broadcaster RAI

ROME – Labor costs are the biggest reason Italian state broadcaster RAI is struggling financially, according to a new study from Italian banker Mediobanca, noting that the company employs more workers than all of its rivals combined.

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The study, released Thursday, shows that labor costs were responsible for 35.6 percent of RAI’s total expenses, compared to 25.7 percent at Telecom Italia Media, 13.4 percent of the total expenses at Silvio Berlusconi’s Mediaset and just 7.3 percent at satellite broadcaster Sky-Italia, the Italian subsidiary of Rupert Murdoch’s News Corp.

In absolute terms, RAI employs 11,378 workers. That compares to 10,830 combined for the other three companies -- 6,126 at Mediaset, 3,995 at Sky-Italia and 709 from Telecom Italia Media, the country’s smallest national broadcaster.

All the figures are for 2011, the last year in which complete figures are available. But Mediobanca said the trends appeared to continue this year.

RAI said last month it expected to end this year some €200 million ($260 million) in the red, despite dramatic cutbacks on international news coverage and on the production of new content. The cash-strapped Italian government has said it will reduce its subsidies to the company going forward.

RAI’s leadership is said to be working on a plan to help the company remain more viable economically, but it is limited by Italian laws that make it difficult to lay off workers.