RAI's Reforms to Focus on Efficiency, Not Layoffs

The struggling state broadcaster and former rival to Silvio Berlusconi's Mediaset will undergo a new cost-cutting strategy amid Europe's ongoing debt crisis.

ROME – Analysis by Italy’s Ministry of Finance released Tuesday shows that the Italian government subsidized state broadcaster RAI to the tune of €250 million ($325 million) over the last 10 years, while a key government figure on Tuesday gave the first hints of what the reform of the state broadcaster would include.

Prime Minister Mario Monti, the head of Italy’s technocrat government, said Monday that significant changes to the struggling RAI would be in the works, though he was short on details. But on Tuesday, Antonio Catricala -- the head of Italy’s antitrust regulator, who Monti appointed as the undersecretary of the Council of Ministers -- said the reforms would not focus on layoffs but rather on enforcing payment of the “canone” fee used to underwrite RAI’s activities and to increasing efficiency as a way to cut costs while making the company more nimble.

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Catricala said the “canone” -- which currently costs Italians €112 ($145) per year for their first television, and less for subsequent televisions in the same household --  would be reduced but made to be payable by all households in the country, whether they owned a television or not.

Catricala also said that he believed that by making RAI more efficient could help the company sidestep layoffs and major reductions in services, at least in the short run. RAI, which owns three national television networks, an international television network, a film production and distribution company, and radio and Internet holdings, is thought to include many duplicate administrative offices.

The details of the reforms will be released next month, the government said.

Meanwhile, the analysis from the Ministry of Finance shows that beyond the fees of the “canone” the government has given €250 million ($325 million) to RAI over the last decade as the giant company has suffered economically while media tycoon Silvio Berlusconi was prime minister. Berlusconi owns Mediaset, RAI’s main rival, and as prime minister in eight of the last ten years, Berlusconi is thought to have directed a great deal of state advertising toward Mediaset at the expense of RAI, while grabbing popular programming options at low cost while influencing RAI not to bid on those properties.

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