Italy's RAI Broadcaster to End 2012 More Than $250 Million in the Red

The good news is that the company held a slim lead as the prime time leader over the first of of the year, helped by the Euro soccer tourney and the Festival of San Remo.

ROME – Italian state broadcaster RAI announced Thursday it expects to close 2012 around €200 million ($252 million) in the red, despite new statistics out the same day that show that RAI’s three networks held a small lead as the most watched networks in prime time over the first half of this year.

The report from newly-installed director general Luigi Gubitosi announced the weak results in a board meeting in which it was revealed that due to the economic crisis ad revenue alone over the last six months had fallen €72 million ($91 million) compared to the equivalent period a year ago. In retrospect, Gubitosi said, the optimistic budget presented a year ago by predecessor Lorenza Lei was not realistic.

“We have to change the way we look at the way RAI is run,” Gubitosi said.

The disappointing results come despite statics released Wednesday in the Italian media showing that RAI’s three national networks combined to own 41.7 percent of prime time television viewing hours over the first half of this year, just ahead of the percentage for Silvio Berlusconi’s Mediaset, though overallr evenue still trailed Mediaset's. The results were buoyed by broadcasts of key European Championship soccer matches and the popular multi-day musical spectacle, the Festival di San Remo, RAI said.

RAI’s weak financials, hurt by lower support from the debt-ridden Italian government, has forced it to push through cutbacks in several areas, including the closure of foreign news bureaus, layoffs, and lower production and product development budgets.

RAI has also been prevented from considering participation in the bidding for the television holdings of Telecom Italia Media, which include MTV-Italia and the La 7 network, the smallest of Italy’s seven national networks. Berlusconi’s Mediaset and Sky-Italia, a subsidiary of Rupert Murdoch’s News Corp., have both said they would not participate in the bidding, but around a dozen other companies are said to be interested in the process.