Cutbacks return to haunt RTVE

The administrative council of Radio-Television Española (RTVE) will meet on Wednesday to study how the government's proposed cutbacks will affect the state broadcaster.

On Friday, the new Popular Party administration announced that it will slash RTVE's budget by 200 million euros ? a drastic amount for the struggling network, which is still adapting to a new commercial-free financing scheme.

At least 80 percent of the 550 million-euro direct government subsidy RTVE received last year has already been committed. The network's annual budget stands at 1.2 billion euros.

But some board members are already talking about reintroducing television advertising to help offset the government cutbacks. There is also discussion over selling the rights to some sports programs and maybe even pulling the plug on one of its channels. (Besides its flagship La Primera, RTVE also owns and operates La 2, Canal 24 horas, Clan-TV, TVE-HD and Teledeporte. It also broadcasts five radio stations.)

Regardless of what measures the board plans to take, RTVE officials have said that there will be no layoffs. However, RTVE also warned that the estimated one billion euros remaining after the 200-million-euro trim is not enough for the state broadcasting network to operate sufficiently. The council is still waiting for a legal opinion from its lawyers before deciding what direction to take.

Santos Ruesga, a professor in applied economics and a member of the board representing the UGT labor union, says the study should determine how much money RTVE can raise and how much it can spend.

Ruesga is in favor of bringing back paid publicity to the television network. Advertising was eliminated a year ago after the Socialist government introduced a new financing model, a move that was applauded by viewers who got fed up with the long commercial breaks between programs.

"Three minutes for every hour," Ruesga insists, adding that viewers won't notice too much because RTVE currently broadcasts four minutes of in-house ads for its own programs. Ruesga proposes substituting the network's own publicity slots for commercial advertisements.

According to some calculations, RTVE could rake in some 100 million euros if it decides to reintroduce advertising. But before commercials are put back on air, there are hurdles that must be cleared.

"We will have to modify the financing law," says Ruesga, who is currently serving as head of the board in RTVE's rotating presidency. "But before the government makes this decision, it will have to consult with the private channels because there will be drops in advertising costs."

Under the financing law, which has only been in effect for a year, RTVE receives its funding from a pot that is fed by the tax levied on other television networks, radio stations and telephone companies for the use of the frequency spectrum, as well as by a special tax on telecoms operators. The government also provides RTVE with its annual subsidy.

Miguel Ángel Sacaluga, the Socialist representative on the RTVE board, says the PP government's cutbacks will "suffocate" the corporation. "It is unreasonable. RTVE will end up making adjustments by having to lay off some 40 percent of its workforce," he says. "The telecommunications operators and the other television networks may end up deciding whether to pay less to finance RTVE."

Before discussing solutions at hand, the administrative council wants to know whether reduction of revenue will also have to go hand-in-hand with a reduction in spending. One of the biggest events that is already in jeopardy is the London 2012 Olympics. RTVE will have to pay 70 million euros for the transmission rights.

"No one wants the Olympic Games. They cost a lot of money, they don't last very long, and there aren't many viewers," says Ruesga.

Broadcast rights to other special sports events, such as the Champions League and La Liga matches, may also be compromised.

If RTVE does decide to pull the plug on one of its channels, many of the board members have already said they are in favor of shutting down Teledeporte, even though they say that the savings will be minimal because the transmission rights to many sporting events have already been purchased.