Italy's Prime Minister Considering Cost Cutting Measures for State Broadcaster RAI

Former rival to Silvio Berlusconi's Mediaset faces an uncertain future amid Europe's ongoing debt crisis.

ROME – Italian Prime Minister Mario Monti said on Jan. 9 that significant changes to struggling state broadcaster RAI would likely be part of the next round of government reforms, though he did not give many details.
RAI, which owns three national television networks, a major film production company, and radio and Internet holdings, has been suffering from economic difficulties for months.

RAI International, the company’s international arm, said in November it might not have the funds to stay open beyond this month, and a few days after that RAI’s board of directors announced an emergency economic plan aimed at saving around $111 million this year by slashing costs and selling off assets.

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The company has been hurt by falling advertising revenue, high production costs, and a drop off in subsidies stemming from the "canone" – the annual fee television owners are expected to pay to help underwrite RAI’s activities. Government sources said that payments of the "canone" have eroded as the economic malaise gripping the country have worsened.
Monti, who took over as prime minister of a temporary technocrat government Nov. 16, has been charged with making sweeping changes to reduce government spending, increase revenue, and jump start economic growth as Italy looks to avoid falling victim to Europe’s growing debt crisis. But until now, he has not specifically addressed RAI’s problems.
Monti’s strategy for helping RAI is not yet clear. But in a televised interview – which was itself carried on RAI – Monti said that reforms to the state-owned broadcast giant would likely come sooner rather than later. Monti has been unveiling various reforms in stages, usually around two weeks apart.

Local news sites speculated that the reforms to RAI could involve paring down the company’s activities to focus on core areas, while also seeking new revenue sources.
RAI’s press office said it did not have any information about Monti’s plans.
RAI has been the traditional rival to Mediaset, the broadcast and cinema giant owned by billionaire media tycoon Silvio Berlusconi, who preceded Monti as prime minister. But as RAI weakened during Berlusconi’s tenure as prime minister, News Corp. subsidiary Sky-Italia, a satellite broadcaster, rose up to challenge Mediaset as its main rival.

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