RTÉ facing months of cost-cutting as it struggles with looming €28m deficit

RTÉ faces months of painful cost-saving measures as it struggles to conserve cash in the face of a €28 million deficit driven by a drop in licence-fee income, which has put its finances under “extreme pressure”.

On Wednesday the broadcaster instituted a hiring freeze and a stop to discretionary spending that will halt investment in its online platforms and cut back on travel, as well as potentially curtail broadcasting from sporting and political events as it seeks to protect its balance sheet.

However, RTÉ executives said cutbacks to core functions such as news output or programme commissioning would have to be considered unless interim funding was forthcoming from the government.

“Our initial strategy is around [a] hiring freeze, it’s around production, but if there isn’t a solution found, whether that’s an increase in sales or interim funding, we will obviously need to cut back on spend,” RTÉ's financial controller Mike Fives told the Oireachtas media committee.

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“It’s the non-committed spend where we will have to do that, whether that’s commissioned programmes, whether that’s the level of output we have in news,” he said.

Government sources said they expected a voluntary redundancy scheme to come as part of a package of reforms – although RTÉ director general Kevin Bakhurst said on Wednesday the broadcaster would struggle to fund one given the pressures it is facing.

“We have limited levers to pull,” he said. “We are working on a contingency plan but I think it’s safe to say that the hole in licence-fee income is extremely difficult to address on our own.”

With fixed costs such as staff extremely high – accounting for some 80 per cent of spending at the station – the focus remains on obtaining a Government bailout and reforms to the licence-fee model.

[ Five new things we learned about RTÉ from the Oireachtas committee meeting ]

There were signs, however, on Wednesday evening that Mr Bakhurst’s initial eight weeks in charge at RTÉ was inspiring confidence within Government that sufficient reform was being planned to enable the Coalition to turn on the funding taps.

While all cautioned that a credible plan had to be delivered in October, when RTÉ plans to present an initial scheme to right-size its operation and address cultural and governance issues, one Cabinet source said Mr Bakhurst was “showing government that he is taking every [necessary] step” and was not “shirking hard decisions”.

A second said he had been “frank in his openness and determination to restructure things”, while another senior Government source said there was enough now to “give hope”.

Mr Fives told the Oireachtas media committee that RTÉ's projected loss this year was to be €7 million, but when the drop in income from the licence fee was factored in it could jump to €28 million.

The committee also heard that lawyers acting for former presenter Ryan Tubridy had made contact with RTÉ over his contract. “There has been an exchange of legal correspondence and we take a different view on the position of Ryan Tubridy’s contract,” RTÉ's director of legal affairs Paula Mullooly said.

“It’s fair to say there is a dispute over the contract,” Mr Bakhurst said.

The director general also made clear that there was no mechanism to pursue the repayment of €150,000 that had been paid to Mr Tubridy under the tripartite agreement between RTÉ, Renault and the former Late Late Show presenter for work on events that never took place.

The presenter had indicated he was open to repaying it, and his proposed return to the station was conditional on him doing so. Mr Bakhurst told the committee that while there were no legal tools to pursue Mr Tubridy, there was a “moral case” for him to pay it back.