TVE close to bankruptcy with €800 debt
Details
Juan Fernandez Gonzalez
| 05 May 2014
The Spanish Government is looking for emergency solutions to TVE’s unsustainable financial situation.

According to a report published by El Mundo, TVE's debt is over €800 million, which could, theoretically, drive the channel to closure. Although this is unlikely to happen, the Government has been forced to intervene. According to El Mundo, the channel's directors will leave and a new financial model will be put in place.

Since 2009, the channel's debt has grown by €100 million a year. The channel doesn’t support advertising and the only private income is provided by the country's telcos, while the rest of the budget is directly paid by public money. The institution was supposed to reform itself in order to reduce administrative expenses, but this hasn't been achieved.

TVE has a capital stock of €1,510 million, half of which will be endangered by the huge debt. According to Spanish regulations, when the debt exceeds half of the capital stock of a company, the association should be dissolved.

The situation is a bit different for TVE, mainly because the public TV service is too important to allow it to close. In addition, the political interests represented in TVE’s board of directors make it difficult for the Government to force the executives to resign.

The Government is said to be preparing an extra credit line of €120 million to support the network while it finds another solution and works out a different financial model.