Italy's RAI Eyes Return to Profitability by End of 2014

The head of the troubled state broadcaster says, "The era of cutbacks at RAI has finished."

ROME – Troubled Italian state broadcaster RAI will finalize the process of approving on its business plan for the 2013-2015 this week, as the broadcaster’s director general, Luigi Gubitosi, announced the company would return to profitability by the end of next year.

Italy’s slow economic growth and government austerity efforts over the last 18 months have hit RAI hard, forcing dramatic layoffs and cutbacks. The company lost €250 million ($320 million) last year, and is on pace for more losses in 2013.

The broadcaster has also drawn fire from the populist political movement of former comedian Beppe Grillo, who last week said he would use his political muscle to push for radical changes to the broadcaster. Grillo called for a RAI youth movement, noting that only 0.37 percent of RAI’s more than 13,000 employees is under the age of 30.

In an interview with Il Messaggero, Gubitosi said the worst has passed for RAI, promising that “The era of cutbacks at RAI has finished; this is now an era for investing in the future.” He said that the recent layoffs of 600 workers would be the last, and that soon the company would start a “cycle of recruitment” that will result in more young people working for RAI. He predicted that over the next two years, RAI would earn enough to repay its losses in 2012.

Gubitosi has proposed an array of reforms for RAI, including a reduction in the number of high-level directors, the removal of duplicative services, and more autonomy among different divisions of the company.

If RAI is indeed on the rebound, it would be welcome news for Italy’s beleaguered television sector, which contracted for the second consecutive year in 2012, with ad-based broadcasters hit especially hard -- including Mediaset, the media giant controlled by three-time Prime Minister Silvio Berlusconi.

It would also represent more good news for RAI, which this weekend discovered that RAI journalist Amedeo Ricucci, and freelancers Elio Colavolpe and Andrea Vignali, and Italo-Syrian reporter Susan Dabbous -- who had been abducted and held hostage while working on a documentary in Syria -- were released after being held for two weeks. The story was big news in Italy.

Twitter: @EricJLyman