Advanced Television

Spain: RTVE meltdown?

September 24, 2010

From David Del Valle in Madrid

The financial future of the public TV group RTVE looks increasingly bleak. Brussel’s decision to start legal proceedings against Spain over the tax on telco operators to finance RTVE, on the grounds that it may break the European legislation, may ruin its new financial model and open the door for privatization.

The EC’s objection to the tax is encouraging telco operators to rebel against the 0.9 per cent per cent tax over their revenues; about E250 million. Redtel, the Association of operators such as Telefonica, Vodafone, Orange and ONO, is appealing against the law before the Spanish Supreme Court. The operators are also taking the case to the Telecommunications Market Commission (CMT) and in a later phase to the European Court.

To complicate matters, the Spanish Advertisers Association (AEA) has offered to foot the telco operators’ bill of E250 million, on condition that the Government approves a moratorium and allows advertising again on RTVE’s channels. The advertisers want Spain to follow France’s example and postpone from 2011 to 2014 the elimination of advertising (on the main FTA public channel). They say will avoid advertising saturation on other stations (according to them, TV advertising has increased by 30 per cent since the advertising ban on RTVE).

In the meantime, the Government has tightened the squeeze on RTVE again by reducing by 6 per cent its state subsidy in 2011 up to E547 million (down E35 million). Despite of all these bad news, RTVE has just approved a budget of E1.2bn million including the E250 million from telco operators, E100 million from private TV channels (representing 3 per cent of advertising supported revenues and 1.5 per cent in the case of pay-TV channels), E315 million from spectrum tax, and E27 million from the sale of programmes, among other revenues.

The board of directors have also approved to cut the salary of the top managers and directors (a reduction of 10 per cent in the case of members of the board of directors and 5 per cent concerning other managers), and even TV presenters. Alberto Öliart, the president of RTVE, has cut 15 per cent off his salary.

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