The Spanish government is paving the way for the reintroduction of TV advertising on the public TV broadcaster RTVE. The first move has been made by the conservative governing party Partido Popular, which has presented in Parliament a non-legislative proposal urging the Administration to reintroduce TV advertising to rescue RTVE from bankruptcy.
The current financial model of RTVE “has serious deficiencies”, it argues, adding that it will be the end of the group unless it is changed. It is estimated that by year end RTVE will have €133 million debt with the Administration footing the bill as state subsidies.
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 state subsidies and taxes imposed on telco operators, private TV channels and pay TV companies which have to pay 0.9 per cent, 3 per cent and 1.5 per cent, respectively of their revenues to finance RTVE.
Over the last few years, state subsidies have been significantly reduced by 45 per cent (around €250 million) and the taxes have not covered the annual budget of around €900 million. The result is a chaotic situation of the group, which employs 6,500 workers and has over €700 million of accumulated losses.
Private TV groups Mediaset and Atresmedia are opposing the reintroduction of advertising, as they currently control over 80 per cent of the €1.7bn TV ad market.