The economic difficulties of Spain's regional television broadcasters, which led earlier this week to the announcement of 1,295 job losses at Valencia's Channel 9, have now left Telemadrid on the verge of collapse. The financial institutions have turned off the tap and the broadcaster is unable to meet its immediate obligations. Telemadrid needs 88 million euros urgently.
The broadcaster has proposed seeking a cash injection from the regional government of Esperanza Aguirre in order to pay its employees in July and August, finance its debt and pay its providers. The opposition Socialists have condemned the situation, which leaves Telemadrid technically bankrupt, as a case of bad management. Socialist deputies in the regional assembly have refused to lend their support to the emergency rescue plan presented Tuesday by Telemadrid and has called for the resignation of its board of directors and its president, José Antonio Sánchez.
"It would be a way to demarcate responsibilities and not contribute to the theory that the workers are the cause of the crisis, as has been monotonously repeated," said Socialist spokesman Eduardo Sotillos.
The opposition suspects Telemadrid's proposal is a smokescreen to "get the company into shape, lumber the regional authorities with the bill, prepare a labor force readjustment plan like the one at RTV Valencia, to later sell to the highest bidder," Sotillos added.
The broadcaster's financiers have slammed the door on direct funding but have proposed instead lending money to the regional government, which can then pass it on to Telemadrid. "We are talking about a change in the source of financing," says the broadcaster.
We cannot prolong the squandering of public funds through regional broadcasts"
Of the 88 million euros Telemadrid requires to stay afloat in the short term, 34 million is owed in maturing debt to LandesBank, 3.6 million to Bankia, 12 million to Banesto and six million to Bankinter. Only the latter has expressed its willingness to roll over the payment, while LandesBank has elected to call in the entire loan, with a deadline of July 30. In addition, Telemadrid requires 4.9 million to pay its employees, 5.5 million to cover social security and tax obligations and 15.4 million to cover costs to providers and creditors.
The emergency costing plan is certain to be approved in the regional assembly, where the Popular Party holds an overwhelming majority. The Socialists, though, issued their own "formal" suggestion: the guarantee of the workers' salaries by the regional government and the advance of 20 million euros due to the broadcaster in the second trimester in public subsidies. The opposition party has also called for a full audit of Telemadrid's accounts.
The broadcaster currently has debts of 240 million euros. In 2012, costs (mostly wages and the acquisition of content) have run to 131 million. The regional government provides 78.9 million and advertising revenue adds another 30 million, although this has been on the wane as a result of the crisis. In all, a debt of 37 million is forecast to be run up this year.
In a Senate debate, PP spokesman Alejandro Muñoz-Alonso put forward the possibility of the public regional broadcasters being privatized. "We cannot prolong the squandering of public funds that regional broadcasters represent," the senator said. In 2010, Muñoz-Alonso added, the 12 regional television stations (except Canal Extremadura) racked up expenses of 1.75 billion euros, 80 percent of which was funded by the taxpayer.