Statement from RTÉ

STATEMENT FROM RTÉ

In response to an article today in the Sunday Independent headlined ‘RTÉ scandal: Whistleblower claims broadcaster gave ‘kickbacks’ of €50m to ad agencies’, RTÉ says:

In its annual published accounts, RTÉ reports its total commercial revenues net of any commission and volume discounts. RTÉ clarified to the Sunday Independent yesterday that its auditors have reviewed commercial income as part of their annual audit and that no issues have been raised in relation to controls over volume discounts.

RTÉ is satisfied that the manner in which it grants discounts is compliant with competition law.

RTÉ would also like to make the following points:

• RTÉ, like many public media organisations across Europe, is dual funded, meaning it relies on income from the licence fee and commercial activity to sustain its public services. Licence fee income represents c. 55% of RTÉ’s total income, with the balance coming from commercial activities. RTÉ’s dual funded model was recently reaffirmed by the Future of Media Commission.
• Because RTÉ is dual funded, RTÉ’s commercial activities are restricted by statute and Ministerial decision. RTÉ is permitted approximately half the commercial airtime (on both radio and TV) of independent/commercial broadcasters.
• The Broadcasting Act, which is the statutory basis that underpins all of RTÉ’s activities, obliges RTÉ to maximise the commercial opportunities that arise in pursuit of its public service activities. RTÉ is assessed each year by the media regulator (until recently the BAI, now Coimisiún Na Meán) to ensure it is maximising its commercial revenues.
• Over 90% of RTÉ’s annual advertising/sponsorship revenues are through negotiated commercial contracts with a number of media buying agencies each year.
• Those media agencies buy airtime/advertising space from media organisations, including RTÉ, on behalf of their clients and are paid a commission. RTÉ offers all media buying agencies an industry standard 15% commission.
• In addition, through contractual negotiation RTÉ (and other media organisations) agree a volume discount. The volume discount is determined by the volume of spend a given media agency makes with a media organisation each year. Like in many industries, if volumes or orders are larger then greater discounts typically apply.
• Given this is a competitive marketplace, volume discounts between media buying agencies and media organisations are commercially sensitive and not disclosed.