In a dramatic reversal of its recent financial fortunes, RTÉ is projecting net surpluses for the next four years of beween €9 and €10.3 million, according to a confidential report.
In financial material supplied to consultants PricewaterhouseCoopers (PWC), RTÉ is projecting a surplus of €9 million for 2005 and this is projected to rise to €10.3 million in 2009. Strong advertising and licence fee revenue are the main reasons for the station's financial strength.
The station's main challenge now will be to select the best way to use its resources. According to the PWC report RTÉ is likely to spend €112 million on capital projects between 2005 and 2009. PWC says the station needs to "firm up" the scale and justification for this spending.
While not mentioned specifically in the report, RTÉ sources believe that much of the capital spending will go on developing digital television.
RTÉ's cash position is also starting to become very healthy. It is expected to have cash reserves of €68 million for the end of 2004. By the end of 2009 it could be sitting on cash reserves of €79 million. The report states: "Despite the increased capital spend, by the end of this period (December 2009) the closing cash position is still forecast to be strong at €79 million".
The figures are a marked improvement on the station's performance in recent years. As recently as 2001 the station had a deficit of almost €71 million. At that time major asset sales were considered to deal with the losses. However, in 2002 the Minister for Communications, Mr Ahern, granted the station a major licence fee increase and this helped to reverse its financial position.
In an income and expenditure statement for the years 2003 to 2009, included in the PWC report, RTÉ projects very strong increases in advertising, sponsorship and licence fee revenue. Advertising revenue for example is projected to rise from €143 million at the end of 2004 to €162.8 million by the end of 2009. This is despite the expected growth in competition from other TV companies, some of them registered in the UK.
Licence fee income is also projected to rise strongly from €167 million at the end of 2004 to €217 million at the end of 2009.
2004 was a good year for the station in relation to advertising and Christmas is believed to have gone well for the station. Killinaskully - The Nativity was the highest rated show in December for example, while other shows which did well included British soap Eastenders, the film Die Another Day and Fair City.
The report also discloses that a new performance measurement system has started to be introduced across the whole organisation. All management are believed to be subject to these measures, but the report says "further implementation" has stalled.
"Residual resistance to change is stated to be evident in some areas and may manifest itself in a reluctance to progress from agreements reached in earlier periods," states the report.
It notes that nine cases came before the station's industrial relations tribunal, the same number as 2003.
