RAI on track to come up short

Ad revenue for first half of October down 10%

ROME -- Italy's Communications Authority -- the government agency that oversees state broadcaster RAI -- is predicting that the company's revenue for the year will fall as much as 40 million euros ($54.4 million) short of budget estimates.

Most of the shortfall will come from a decline in ad revenue caused by the slowing of Italy's economy. Last week, RAI reported that ad revenue for the first half of October was down 10% compared with the same period last year, but this is the first time that an absolute figure has been placed on RAI's woes.

The authority said the situation could continue into 2009, with the year ahead expected to be "dark" for the state-owned giant, which survives on a combination of state funding and advertising.

There's no word from RAI on how the shortfalls are expected to affect its operations. But one move expected to is a possible joint venture with rival Mediaset that will allow the two companies to compete against satellite broadcaster Sky Italia on the satellite platform.

RAI and Mediaset will reportedly be in talks this week to create a combined satellite entity to be called Tivu Sat.