How political manipulation led to financial meltdown at Telemadrid

Telemadrid managers define it as a "restructuring process," employees say the regional broadcaster is being "dismantled," and a former director general, Francisco Giménez-Alemán, describes the whole thing as "shameful." Plans to fire 925 workers from Madrid's public television and radio stations (around 80 percent of the staff) means the end of Telemadrid as people knew it over the last two decades.

On Tuesday, a group of nine employees attempted in vain to hand a letter to regional premier Ignacio González asking him to "save the lives of 925 families" by finding alternative ways to reduce spending while preserving jobs at Telemadrid.

The company insists that the current model is obsolete and unsustainable and that a new corporate structure is required to adapt to the economic situation in general, and to the broadcasting sector in particular. It is the same rhetoric employed by the Valencian region's own broadcaster to fire 70 percent of its own staff. Both stations share many traits: they are paradigms of journalistic manipulation, always at the service of the regional government; they have racked up colossal debt (1.3 billion euros at Canal Nou and 260 million euros at Telemadrid), and they ended up with an excess of personnel by regularly hiring journalists who were sympathetic to the party in power.

"The Telemadrid staff was bloated to the point of bursting," says Jorge Martínez Reverte, director of the radio station Onda Madrid when the region was ruled by Socialist premier Joaquín Leguina. "[The previous Popular Party premier] Esperanza Aguirre began interfering with the newscasts, and every time a journalist at the station started to bother her, instead of firing them, she would just hire a more sympathetic replacement. There was a duplication of positions in every department where uncomfortable journalists worked. That is how the staff grew out of all proportion and how the cost of a news program grew radically."

Premier González needs to be on the newscasts to build himself an image"

The shrinkage now proposed by the consulting firm Deloitte Cuatrecasas will leave the station functioning on the bare minimum. Programming will be whittled down to newscasts, series, movies and a couple of long-running programs (Madrileños por el mundo and Madrid directo) which might now be produced by private companies. This is the ideal setup for Madrid premier González. "The premier lacks the charisma of Esperanza Aguirre and nor does he enjoy her popularity rates. He needs the newscasts. They have to show him on screen at all hours of the day because he needs to build himself an image," said a source close to the regional government.

The change came about in 2004, when the director general's chair was occupied by Manuel Soriano, who had been Aguirre's press chief in the Senate. People still recall the note he sent regional authorities informing them that a Telemadrid documentary on the March 11, 2004 bomb attacks on commuter trains had turned out "quite well cinematographically and ideologically." When this note was leaked, Soriano called it "an attack against my privacy."

The actual running of the company has not exactly been a model for others to follow, either. Since 2006, Telemadrid has had to be bailed out by the regional government. That year it was forced to request an extraordinary loan of 20 million euros to make it to year's end. The plea for help became a regular occurrence. In 2009, the broadcaster asked for 31 million, which gives a sense of how much managers erred when it came to sticking to the budget.

Audits commissioned by Telemadrid - and which never saw the light - already warned about serious management problems back in 2004. Auditors wrote about "an absence of economic goals," "no savings mentality" and "decision-making without proper transparency."

Deloitte's report says that "for a total of 1,169 employees, there are 51 different types of professional categories, an amount that is clearly excessive." Its recommendation, approved by the board of Telemadrid on Wednesday, brings the staff down to 182 workers and halves the 2013 budget to 85.8 million euros. Content will be farmed out and much of the money will be spent on movie rights.

In the meantime, Telemadrid workers went on strike again at midnight Monday, when for a full half-hour the station showed a still shot of Gerardo Díaz Ferrán, an entrepreneur and former president of the business association CEOE who has been arrested on charges of money laundering and concealment of assets.