RTVE saved from bankruptcy, ads return?

State-owned TV group RTVE has been rescued from bankruptcy by the Spanish government which has injected €130 million into the debt-burdened company through SEPI, an entity that groups all of the state’s public holdings under one umbrella.

The president of RTVE, Leopoldo González-Echenique had publicly demanded emergency funds to cover costs as the group, with 6,500 employees, incurred in €716 million accumulated losses as of the end of 2013.

More than 50 per cent of the losses are due to depreciation in real estate value, according to the president, but RTVE’s historical deficit is more than €100 million annually.

Back in 2009 the government banned advertising on the public broadcaster and imposed a new model financed by telcos and FTA and pay TV channels which have 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. The RTVE tax on telco companies led Vodafone to pull out of the mobile TV business in order to avoid paying around €30 million a year.

The chaotic financial situation of RTVE is driving the Government to reconsider the comeback of TV ads to RTVE. Private TV channels are strongly against it as, they say, it would seriously damage the TV ad market by reducing the ad pie by around €300 million.

Posted by on Jun 30 2014. Filed under Advertising, Articles, Broadcast, Business, DTT/DSO, FTA.

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