RTVE subsidy under threat

Iñaki Ferreras | 27-07-2010

Spain's Ministry of Economy and Taxes has proposed to RTVE's president Alberto Oliart that it cut down the state's subsidies to RTVE by €35 million, around 6%.

The move has prompted fears that the reduction could worsen the already weak financial situation of the broadcaster, which has a yearly total budget of €1,200 million.

The proposed cuts are part of a plan of economic adjustment designed by the government, with authorities all across Europe on a belt-tightening crusade.

But the situation of the public company could even get worse in the near future because the rhythm of incomes is not what its executives had forecast according to the newspaper 'El País'. This year, the first without advertising, RTVE will get €580 million from the state. The end of advertisements mean for the public audiovisual group a cut of €500 million in incomes per year. In order to compensate for this the government has given RTVE an extra loan that together with the subsidy represents a total of €700 million.

The state funds for RTVE come from the new tax on the private broadcasters and the telephony companies that pay for using the radioelectric space. But the stocks do not match for the public broadcaster.

On the one hand it forecasts the incomes from the radioelectric tax will be inferior to that foreseen according to the Ministry of Industry, Tourism and Commerce. On the other hand the private broadcasters and the telcos are late in their payments under the new law. These payments represent a total of €260 million.

By law the national private broadcasters must pay 3% of their incomes (1.5% in the case of pay-TV) while the telcos must contribute with 0.9%. RTVE's problem comes from the fact it has not yet had a single Euro from any of these sectors.

And what is worse is the private broadcasters have appealed over the new tax to the European Commission, while the tax on the telcos is also being studied by Brussels.