Spanish Government proposes new RTVE business model
Juan Fernandez Gonzalez
| 24 November 2014
In order to solve RTVE's financial crisis, the ruling Party in Spain, Partido Popular, has presented a legal initiative to modify the public broadcaster's business model to include a return to advertising.
rtveThe plan states that in order to make RTVE sustainable and financially viable, it's necessary to redefine the economic model of the network, keeping the public budget as its main income but promoting other sources from the private sector, in particular advertising.
The response from the private free-to-air (FTA) channels was immediate. Uteca says the proposition is too ambiguous and doesn't define the terms of a possible return of adverts to RTVE, a decision which would damage market competition as it would give the public broadcaster a favoured position.
However, RTVE's financial situation needs a rapid solution. Since 2009, the channel's debt has grown by €100 million a year. Currently, the only private income is provided by the country's telcos and networks, while the rest of the budget comes from public money. The institution was supposed to reform itself in order to reduce administrative expenses, but this hasn't been achieved.
The financial issues have led to the resignation of Leopoldo González-Echenique, RTVE's president for the last two years. He had requested an extra €270 million to solve the year's deficit while not having managed to reduce the broadcaster's expenses.