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Spain to lift RTVE TV ad ban

June 10, 2013

From David Del Valle in Madrid

The Spanish government is planning to lift the TV ad ban on RTVE allowing the state-owned group to be financed by a mix of TV ad revenues and state subsidies, as it was before 2009 when new legislation that prohibited it from broadcasting ads was approved.

The decision is subject to the forthcoming ruling from the EU Court over the next few weeks pertaining to whether or not the taxes law is in breach of European legislation. If the Luxembourg EU Court overturns the government-imposed tax on telco companies to finance the group, the current financial model of RTVE may collapse.

“The government is looking closely at the resolution of several proceedings in Brussels that affect some European televisions and that will have an impact on our decisions”, said the Vice president of the government, Soraya Saenz de Santamaria.

Telcos 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 private TV channels are strongly against the comeback of TV ads to RTVE 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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