RTE is not going bankrupt, director general insists

RTE is not going bankrupt, director general insists

RTE is facing an extremely challenging financial situation but is not on the verge of bankruptcy, its director general has insisted.

Kevin Bakhurst warned members of a parliamentary committee in Dublin that failure to implement a new longer-term funding model for public service media in Ireland would jeopardise the future of the national broadcaster.

Mr Bakhurst has introduced an immediate recruitment freeze, with new staff only taken on in exceptional circumstances, and a halt to discretionary spending as RTE continues to grapple with a fall in licence fee revenue following a series of controversies over the summer.

Mr Bakhurst faced almost four hours of questioning as he appeared before committee members on Wednesday.

Outlining potential cost-saving measures, the director general said there would be a move to drive down the salaries of the top-earning presenters and he said the sale of RTE’s prized south Dublin site at Montrose was also under consideration.

He said he could not rule out compulsory redundancies but would prefer to slim down the organisation by way of voluntary exits.

But he stressed that voluntary redundancy schemes were expensive and that RTE did not currently have the money to run one.

Mr Bakhurst also addressed concerns that have been raised about the number and value of allowances paid to managers at RTE on top of their salaries.

“I have to say the issue of allowances is something that we are dealing with, we need to deal with it – there are far too many allowances in RTE,” he said.

The crisis at RTE erupted in June when the broadcaster revealed it had not correctly declared fees to its then-highest-paid earner Ryan Tubridy between 2017 and 2022.

The furore subsequently widened as a series of other financial and governance issues emerged.

RTE pay revelations
It was revealed RTE had not correctly declared fees paid to presenter Ryan Tubridy (Niall Carson/PA)

Prior to its difficulties over the summer months, RTE had asked the Irish government for 34.5 million euro (£29.6 million) in additional interim funding for next year.

Since then, its revenues had taken a further major hit with the broadcaster currently projecting a loss of 21 million euro by year end due to a fall in TV licence payments in the wake of the controversies.

That 21 million euro in revenue gap was on top of a deficit of seven million euro RTE had already budgeted for in 2023.

The committee heard that better-than-expected commercial revenue intake would help make up some of the shortfall, but not all of it.

The Government has yet to decide how much extra funding it will release to the embattled organisation, but has made clear that any investment will have to be reciprocated with a significant programme of internal reform.

Mr Bakhurst, who was appointed in the midst of the crisis, told members of the media committee that he was determined to transform RTE.

He said he hoped to provide an outline framework for strategic reform in October, with a commitment to delivering a full strategic reform and transformation plan by the end of the year.

“I would caution, however, that all of these reforms will be undermined if the question mark over the funding of public service media in this country is not properly resolved,” he said.

“The TV licence system, its supporting legislation and the associated collection methods are no longer fit to support the provision of public service media to the people of Ireland.

“The current crisis has made the problem even more acute and jeopardises the future of public media, and RTE, and the viability of Ireland’s audio-visual sector.”

RTE pay revelations
A full or partial sale of RTE’s Montrose site in Dublin was still on the table (Liam McBurney/PA)

Taoiseach Leo Varadkar said last week that it was important to deal with the public service broadcasting funding model in the longer term and vowed to legislate on the issue next year and have it implemented by 2025.

Mr Bakhurst told the committee that the halt on discretionary spending included limiting outside broadcasts and cutting investment in the RTE digital player.

“I’m pulling every lever I can to try and preserve cash because that is my duty, and that’s the duty of the board to make sure that we as an organisation do not run out of money,” he said.

Mr Bakhurst said a full or partial sale of RTE’s Montrose site was being considered.

“All options are on table,” he said.

He said a professional valuation of the site was under way but he highlighted that a sale could potentially be complicated by the fact that several of the buildings were listed.

On the potential for redundancies, he said: “What I’ve said is, I will do everything humanly possible that we don’t get to the position of having to have compulsory redundancies – for me that would be a failure if we get to that position because that’s why I’ve had to take early action today to try and manage our cash when we have uncertainty.”

Mr Bakhurst said the direction of travel was “downward” on presenter salaries.

“We need to bring down overall presenter salaries at RTE and we’re discussing that in the leadership group,” he said.

The director general insisted RTE was not on the verge of bankruptcy.

RTE pay revelations
Chairwoman of the RTE board, Siun Ni Raghallaigh, said RTE faced ‘hard decisions’ to secure its future (Brian Lawless/PA)

“We are having to manage our cash extremely carefully but we’re not on the verge of bankruptcy and I wouldn’t be able to run the organisation under my statutory responsibilities if I thought we were, and we’re not,” he told the media committee.

He acknowledged that the organisation was facing an “extremely challenging financial situation”.

Mr Bakhurst said real and radical change was needed at RTE.

“RTE must reflect the whole of Ireland better, to all audiences, on the devices and platforms they choose to use,” he said.

He added that it was a “critical moment” for public service media in Ireland.

“We have a choice: we can work together to reform and reshape RTE for the next 100 years, or we can accept its failure and demise. The latter is something that I, and I believe you, cannot accept,” he said.

In her statement to the Oireachtas media committee, RTE board chair Siun Ni Raghallaigh said RTE faced “hard decisions” to secure its future.

“A secure future for RTE is by no means guaranteed,” she said.

“This is currently an organisation under immense pressure across a number of fronts.

“Critically, the erosion of that trust has helped create immediate financial pressures.

“This needs to be resolved as a matter of urgency and is a matter of immediate focus for the board and the interim leadership team.”