The legal ban on advertising on RTVE may come to an end over the next few months as the new Government is considering its reintroduction. In a move to tackle the budget deficit, the Government has tightened the screws on RTVE by reducing by €200 million its state subsidy out of the total RTVE’s annual budget of €1.2 billion making a big hole in its accounts. To mitigate such a significant cut, the Administration is to lift the advertising ban to allow RTVE to capture ad revenues.
The advertising ban came into force in January 2010 after a campaign from private TV channels which benefited from €400 million in ad revenues released from RTVE. The advertising ban came along with a new financial model for RTVE supported by taxes imposed on telco operators, private TV channels and pay TV companies and even a radioelectric spectrum tax amounting to a total of around €700 million plus €500 million in state subsidies.
The reintroduction of advertising on RTVE would also have a big negative impact on private TV channels at a time when the advertising market is in free fall with a drop of 7.5 per cent until September.