Marc MacSharry, the Fianna Fáil TD for Sligo-Leitrim and member of the Public Accounts Committee writing in TheJournal.ie
has called for drastic moves to return RTÉ to profitability and create an opportunity to change its funding mechanism away from traditional advertising and the TV licence.Like most people in this country, I grew up watching and listening to RTÉ through some of the most important changes in this country’s history. It’s provided an invaluable service, catering for all the different tastes of Irish society.
As time has gone on and with the advent of new services like Netflix, streaming and social media, the way we are entertained and consume news has changed drastically.
Why is RTÉ losing money?
This was evident when RTÉ released its annual report showing a net deficit of €19.7m after tax. It’s clear this situation is not sustainable, however, how we decide to fix it will be a point of contention.
Indeed, there’s already been talk of job cuts, increases in the licence fee, retransmission fees and even a bailout. All of these solutions end with the consumer paying the price, be it through a decline in quality or an increase in costs.
But why is RTÉ losing money? Having a dominant position in the Irish market with guaranteed income from the licence fee, RTÉ should be able to make a profit. RTÉ’s Director General Dee Forbes said the impact of Brexit and licence fee evasion rates had contributed to their losses. She even went as far to call for an increase of the licence fee to €175.
2017 was a landmark year for advertising in Ireland, for the first time in history the amount spent on digital advertising in Ireland is expected to overtake traditional media. Irish advertisers are tipped to spend €433 million on digital ads this year, up 12% on 2016’s tally, mostly benefitting tech giants like Twitter, Google and Facebook. We’ve seen other newspapers like INM experiencing great difficulties adjusting to these new realities. We need to change our approach to funding this public service if it is to survive.
To change a business, you have to do an analysis of what assets it has to leverage change. RTÉ sits on 25 acres of land in the most exclusive area of Dublin. Located beside the plush Ailesbury road and within a 20-minute walk of Dublin’s central business district, RTÉ’s best asset is its land.It’s not surprising that Cairn homes bought 8.64 acres of RTÉ’s 25 acres for €107.5 million. Based on this transaction, it would be reasonable to estimate that the rest of RTÉ’s land would be valued at over €200 million.
With Dublin in the midst of a housing crisis and with new businesses moving into the central business district, demand is set to skyrocket for high-quality apartments in this area. How will selling this land facilitate change?A new business model
As a rural TD, it’s a constant theme in every election of the over reliance on Dublin for growth. It has skewed regional disparities and is unsustainable in the long run.
My proposal is to see real meaningful decentralisation. For RTÉ, this would mean moving RTÉ outside of Dublin, into an area with a surplus of housing and cheap land costs and funding it through the sale of the Donnybrook studio.
This would mean moving the majority of the 1,984 RTÉ employees out of Dublin to rural Ireland and establishing a smaller office in Dublin city centre for news and current affairs. By moving the main studio outside Dublin, RTÉ could invest in modern studio space and introduce meaningful structural changes to adapt to future consumer demands.
I also believe by moving RTÉ to rural Ireland, it creates an opportunity to change its funding mechanism away from reliance on traditional advertising and the TV licence. Demand for film and television studio space in Ireland from international productions remains high thanks to the Section 481 tax incentive scheme.
The government’s Creative Ireland Strategy plans to make Ireland an international hub for film and TV production, by allowing our state broadcaster to create a state of the art studio with access to RTÉ’s facilities, it would diversify RTÉ’s revenues with fees from international productions funding public services.