EU Court threatens RTVE’s future

rtveThe financial model of the public broadcaster RTVE may collapse if the Luxembourg EU Court overturns the government-imposed tax on telco companies to finance the group.

Telco companies and commercial and pay TV channels are obliged by law to dedicate 0.9 per cent, 3 per cent and 1.5 per cent, respectively, of their revenues to finance RTVE, with a budget of around €900 million including the taxes and the state subsidies. In 2012, telco companies and TV channels paid €217,356,305 to RTVE, according to the CMT (Telecommunications Market Commission), with the former paying €155,83 million, around 72 per cent of the total, commercial TV channels €44.71 million representing 20.57 per cent and pay TV channels €16.8 million, 7.73 per cent. As a result of the tax, Vodafone pulled out of the mobile TV business in order to avoid paying around €30 million a year.

The prospect of a negative ruling from the EU Court is driving the Government to reconsider letting RTVE break back into the advertising market. The private TV channels are strongly against that on the grounds that the decision would seriously damage the TV ad market reducing the ad pie by around €300 million from the total estimated for this year at €1.8 billion.

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