minister for communications, marine and natural resources · audience and reflecting the importance...

November 2002

application for Licence Fee Increaseto the

Minister for Communications, Marine andNatural Resources

Radio Telefís Éireann 1

Table of ContentsEXECUTIVE SUMMARY.....................................................................................................................................................................................................................................2

INTRODUCTION...................................................................................................................................................................................................................................................8

1. CURRENT POSITION................................................................................................................................................................................................................................12

1.1 EXISTING ACTIVITIES .................................................................................................................................................................................................................................121.2 CURRENT FINANCIAL POSITION..................................................................................................................................................................................................................22

2. VISION FOR SERVICE DEVELOPMENT .............................................................................................................................................................................................26

2.1 RTÉ RADIO ................................................................................................................................................................................................................................................272.2 NEWS AND CURRENT AFFAIRS ...................................................................................................................................................................................................................292.3 RTÉ TELEVISION........................................................................................................................................................................................................................................32

3. CHANGING STRUCTURES......................................................................................................................................................................................................................43

3.1 REPORTING................................................................................................................................................................................................................................................433.2 COMPLIANCE ..............................................................................................................................................................................................................................................473.3 OPERATING.................................................................................................................................................................................................................................................50

4. FOUR-YEAR FINANCIAL PROJECTIONS ...........................................................................................................................................................................................58

4.1 INCOME STATEMENTS.................................................................................................................................................................................................................................584.2 BALANCE SHEETS.......................................................................................................................................................................................................................................594.3 SUMMARY CASH FLOW PROJECTIONS ........................................................................................................................................................................................................604.4 ASSET UTILISATION STRATEGY..................................................................................................................................................................................................................61

Appendix I RTÉ Television and Value for MoneyAppendix II Draft Public Service Broadcasting Charter; Statement of CommitmentAppendix III Audience CouncilAppendix IV Code of Fair Trading PracticeAppendix V Independent Production Unit Commissioning PolicyAppendix VI Development Plan for ArchivesAppendix VII Development Plan for Performing Groups

Appendix VIII Financial Projections, 2003-2006 Confidential – bound separately


Executive SummaryRTÉ entitled its submission to the Forum on Broadcasting “Put the public interest first”. The public referred to is the people of Ireland – but RTÉ alsoacknowledges its responsibility to those abroad who take an interest in Irish affairs. Public Service Broadcasting is all about national debate and identity andcultural enhancement. To compete in the contemporary broadcasting environment a public service broadcaster must be a streamlined and efficientorganisation, providing a high level of top quality indigenous programming and be supported by an appropriate level of erosion proofed public income. RTÉis currently engaged in a change process to ensure that once it is on a secure and sustainable financial basis the audience will benefit, immediately and on anongoing basis, with more top quality indigenous programming. The need for appropriate public funding is recognised by the Europe Union.

The European Parliament calls on Member States to “ensure consistent, stable and realistic funding for public service broadcasters to ensure theirviability in a competitive market ….”(Art. 36, EU Parliament’s resolution on Public Service Broadcasting, 19 Sept. 1996)

Context for ApplicationIn March 2002 the Minister for Arts, Heritage, Gaeltacht and the Islands established a Forum on Broadcasting to address a wide range of issues relating tobroadcasting in Ireland. The members, chaired by former Governor of the Central Bank Maurice O’Connell, comprised six people drawn from the public andprivate sectors and with expertise in broadcasting and related fields. After significant public and private consultations the Forum reported to the Minister forCommunications, Marine and Natural Resources in August 2002. The Forum’s Report, and in particular its 44 recommendations, provides the backgroundcontext for this application.

Recommendation 1 of the Forum Report states:“The role of RTÉ as the designated public broadcaster should be reaffirmed. RTÉ should continue, for the present, to operate its existing range of televisionand radio channels in order to fulfil its role as described under Section 28 of the Broadcasting Act, 2001”.This recommendation is at the core of this application.

Financial contextAs Ireland’s public service broadcaster RTÉ has two revenue sources – public via a licence fee and commercial sources primarily advertising andsponsorship. Over many years the imbalance between the two sources has grown to the extent that it is currently two-thirds commercial; this inevitably putsenormous pressure on the public service remit. In line with European policy and practice RTÉ is seeking a realistic and consistent licence fee which willpermit it to discharge its public service obligations by not being over-reliant on commercial revenue.

RTÉ has generated substantial deficits over recent years; this is unsustainable. One of the key reasons is the imbalance referred to above which is exacerbatedby the uncertainty of the current advertising marketplace. This highlights the inappropriateness of Ireland’s public service broadcaster being dependent oncommercial revenue to a greater extent that any comparable European broadcaster. The insecurity of the dependency has been highlighted by the impact ofworld economic trends over the past few years. But, of even greater significance, is the erosion in the real value of the licence fee. If it had been index linkedin 1978 it would currently be in excess of €190 per annum.


RTÉ is now seeking an increase of €43 to a figure of €150 per annum; furthermore RTÉ is seeking, in line withForum recommendations, that this sum be erosion proofed. RTÉ is also urging that consideration be given to theintroduction of a commercial licence fee to address the current inequity where householders pay the same rate asthose who benefit commercially from having access to television services.

RTÉ recognises that the allocation of public moneys demands full and transparent accountability and is committed to ensuring value for money.

The public interest - accountabilityThe public looks to RTÉ primarily for broadcasting services; RTÉ regards the public, and specifically its audience, as the shareholders, the owners of theorganisation. This demands a very high degree of accountability - members of the public who seek information about RTÉ or who wish to complain about itsservices are entitled to find an organisation committed to accountability and openness. To facilitate this RTÉ has proposed the establishment of an AudienceCouncil, with effect from mid 2003, and the publication, on an annual basis of a Statement of Commitments, promises to the audience that can be measuredat year-end.

RTÉ has a well-structured ongoing accountability to the public through the elected Government of the day, and in particular through the Government Ministercharged with responsibility for broadcasting. This is a crucial relationship and RTÉ believes it is imperative that it not be reduced in any way; it is a coreelement of the national broadcaster’s accountability to the public. RTÉ has outlined, in its submission on legislative implications arising from the Report ofthe Forum on Broadcasting, the importance it attaches to the powers of the Minister of the day in relation to RTÉ, which derive from existing legislation,being retained.

Challenge facing RTÉThe broadcasting landscape in Ireland has changed dramatically over the past ten years and the welcome development of competition has broadened theprogramming spectrum needed to ensure the democratic benefits of pluralism and diversity. Private broadcasters must maximise shareholder value andtherefore focus on the 15-34 age group, tailoring programming to suit that niche market. On the other hand, as the public service broadcaster RTÉ is chargedwith addressing the needs of all people, of all ages and interests, with consequent demands for high investment in programming – not all of which will attracthigh ratings but will fulfil audience needs.There are inadequacies in current RTÉ TV schedules, which will be addressed as a priority. For example, broadcasts currently consist of 45% acquiredprogramming compared to 40% home-produced programming in peak time; with an erosion proofed licence fee of €150 from January 2003 this imbalancewill shift significantly so that by 2006 the balance will be 47% home-produced as against 38% acquired. A €150 licence fee would increase public funding toRTÉ in 2003 by c €50m; approximately two thirds of this sum, c€32m would go directly to programming.


Broadcasting contentThe primary interaction of the audience is through broadcasting; hence a primary focus for RTÉ is the range and quality of content. In this application theimprovements to on-air content that an erosion-proofed licence fee of €150, with effect from January 2003, would secure are identified. These improvementsall focus on programming content directly related to RTÉ’s public service broadcasting; it must be recognised that some of this content will not attract largeaudiences but will fulfil an important function in Irish society.

Highlights include:

(a) Regional DevelopmentsSpanning all output areas will be an enhanced focus on Regional Developments; this is inrecognition of the strong regional identification and attachment of most members of theaudience and reflecting the importance for a public broadcaster of reaching out to all parts ofthe community. RTÉ has a physical presence in non-Dublin locations as shown on mapoverleaf.

Among the regional developments will be:� new post created - Head of Regions� two new regional correspondents in News� increased television coverage with an expansion of Nationwide; new musical and

cultural initiatives from across the country� 40 prime daytime Radio 1 programmes a year from the regions; increased regional

output of live music on 2fm and Lyric fm� new education and outreach programmes from the performing groups and Lyric fm� an increase in the number of independent productions commissioned from non-Dublin

sources.

(b) Improved quality and breadth of Radio contentImprovements on radio are identified channel by channel with overall commitment tosetting standards of quality and breadth in broadcasting for the entire population and a comprehensive service in Irish and English.

There will be encouragement of new Irish talent in word, music and performance

BelfastDundalkRathcairnWaterfordAn RinnCorkDromadTraleeBaile na nGallLimerickAthloneGalwayCaslaCastlebarSligoNa Doire BeagaLetterkennyDerry

Regional Facilities ex. Dublin

Information Source - RTÉ Analysis


(c) Expansion of News contentKey areas, which have to date been inadequately addressed have been prioritised by the newly established News Integrated Business Division. These includethe appointment of an Education Correspondent, the provision of news programmes for children and young people and the establishment of a NewsInvestigative Unit. Additional coverage of political and business news will be complemented by the development of a series of ‘event’ documentaries onnational issues to generate debate and reaction.

(d) Home produced content on televisionThere will be a significant increase in Irish produced content on television, with a consequent drop in the level of acquired programmes. RTÉ will still bringthe best possible programmes from overseas to the Irish audience as early as possible but it is committed to enhanced volume and quality of home producedmaterial.

This commitment to enhance Irish, and Irish interest, content into peak time TV schedules results in an increased focus on all parts of the island and on allinterests of Irish people. For example, there will be:� developments in sports to include expanded coverage of GAA and rugby� increased production from RTÉ Cork� new strands of programming for children and young people� increased hours of home-produced drama� new bilingual programming� development of a documentary strand examining contemporary Irish life

Non-broadcasting activities(a) ArchivesThe EU has identified broadcast materials as “a form of cultural expression reflecting contemporary society and … an excellent means of recordingeveryday events, the basis of our history and a reflection of our civilisation”. There are no statutory requirements on broadcasters in Ireland toestablish and/or maintain archives but in this legal vacuum RTÉ has amassed very rich archives, in radio, television and stills, which ‘tell the story’of contemporary Ireland. An Archive Project, focused on cataloguing, conservation and digitisation, is underway but to secure the unique collectionsin a sustainable and accessible way will require capital to provide an appropriate audio-visual heritage building.

(b) Performing GroupsThe cultural value of RTÉ’s Performing Groups was explicitly recognised by the PIANO Report in the mid 1990s and more recently in the Report by theForum on Broadcasting.

The Performing Groups operate within a separate division in RTÉ and enjoy artistic autonomy.

The major development focus for the division over the coming years is a three strand initiative linking Education, regional performances and new musiccomposition.


(c) DigitalAs is the case for all national broadcasters, RTÉ must integrate the implications of new technologies in its view of the future. This application and itsassociated budgets are based on existing radio, television and on-line services: no provision is made for new channels. Digital development requires thatcurrent broadcasting legislation is revisited and amended, particularly in relation to the:� absence of any future framework for radio� changing implementation of DDT throughout Europe.

RTÉ reiterates its commitment to play a full part in articulating and realising the Government's plan for a digital infrastructure in Ireland. In the interim, usingexisting technology and infrastructure RTÉ makes existing and new Irish content available for access by worldwide audiences. RTÉ Online currently providesaccess to four radio services, breaking news/sports/business/entertainment and a wide selection of video and audio on demand including micro-sites such asCeolnet, Classicnet and Millennia - an encyclopaedia of Irish culture, biography and history in text and multimedia format.

(d) Service DevelopmentA relatively modest provision is made in this application which will permit some development in relation to a number of strategically important projects -although difficult choices may inevitably require to be made. These include the introduction of some service of RTÉ television content to Britain, theextension of RTÉ's radio availability in Britain and Northern Ireland, the renewal of overseas tours by the Performing Groups and the extension of thenetwork of foreign news correspondents.

FutureRTÉ has embarked on a change process building on earlier changes, that resulted in retention of all services and increased flexibilities, during the period 1999to 2002. These included:

� Staff Reduction, a net reduction of 450 staff in 2000/2. Of this number, 400+ were permanent and pensionable.� Closure and outsourcing of TV Outside Broadcast Unit, negotiated through RTÉ’s Partnership and IR mechanisms with no loss of service; resulted in

annual savings of €1.5m+ or equivalent volumes of operations.� Closure of Construction Workshops, which was a costly and inefficient operation because of the seasonal nature of demand. Negotiations with four

different craft unions achieved full closure without dispute or service disruption.� Desktop Self-Operated Video Editing negotiated as part of Transformation. 30% of all TV News bulletin packages are now edited by Journalists as a

result of significant changes in work practices.� Reduced TV Studio Crewing, including the introduction of unmanned and remote control camera facilities and implementation of the single operator TV

News headline facility.� Stills, the closure of this operational activity, no longer essential to RTÉ production activities, was achieved through negotiated early retirement and

redeployment.


The new process will drive efficiencies throughout the organisation while ensuring value-for-money and an effective and sustainable workforce. Core to thechange process is the devolution of central services to newly established Integrated Business Divisions (IBDs) where the MDs will have responsibility forrevenues and costs. To secure these new structures there will be an additional staff loss but the outcome of the process will result in a sustainable and effectiveworkforce by end 2003.

Financial projections for the period 2003 – 2006 are included with this application; they are realistic and show the fragility of the balance between income andexpenditure. A strategic asset utilisation policy is being addressed by the Authority: if asset disposal is being considered, the deployment of resulting moneyswill be identified at that time.


IntroductionRTÉ recognises that as a public body in receipt of substantial public moneys considerable responsibility rests upon it to ensure that full value is returned to thelicence payer. This requires that the organisation be managed in such a way as will ensure, consistent with its programming objectives, that it is efficient inits operations and effective in meeting its targets. This will give confidence to the audience that all funding, public and commercial, will make the optimumcontribution to the schedules. These obligations are fully accepted by RTÉ.

A system of dual funding has been in place for Irish radio since 1926 and for Irish television since 1961. The Report of the Forum on Broadcasting to theMinister for Communications, Marine and Natural Resources, describes dual funding “…as the only practical approach towards funding public servicebroadcasting in Ireland”.

The public element of the funding is through a licence fee. The Forum comprehensively addressed several aspects of this fee and made three specific butinter-linked recommendations.

The licence fee should be reviewed with the objective of establishing a base on which RTÉ can meet its public service remit. TheGovernment should ensure through a series of adjustments over defined periods that the value of the new licence fee will not beeroded.

Recommendation 25

In making recommendations to the Government in relation to the licence fee, the Minister for Communications, Marine andNatural Resources should have regard to the level of public funding required for RTÉ to fulfil its public service broadcastingobligations as well as to the maintenance of a balance between RTÉ’s revenues from commercial and public sources.

Recommendation 26

Adjustments to the licence fee should be dependent on RTÉ’s performance in meeting the requirements set out under the Charter.Recommendation 27


RTÉ believes that the speedy, fair and comprehensive implementation of these recommendations is of prime importance in securing the future of publicservice broadcasting in Ireland. It would also urge immediate consideration, as recommended by the Forum, of the introduction of a commercial licence. Acommercial licence would apply in circumstances where access to television is provided as part of a service, for example in hotels, pubs and bookmakers. It isclearly inequitable that such licence holders pay the same amount as individual householders.

Key elements of the recommendations are addressed separately.

A. Licence fee base required to meet public service remitThe concern of the Forum in relation to the licence fee base is clear within the body of its Report:

“There is a substantial imbalance in the sources of funding for RTÉ. This is seen to have an impact on its ability to fulfil its public service broadcastingobligations…. Additional resources are needed if RTÉ is to adequately fulfil its public service broadcasting obligations.”(page 35, Report of the Forum on Broadcasting)

Unlike public service broadcasters, commercial channels are businessescharged with maximising profits for shareholders. The audience is the soleshareholder in RTÉ and public funds protect free and fair communications,impartial coverage of news and current affairs, a comprehensive scheduleproviding something for everyone and the highest possible standards ofoutput. The Amsterdam Treaty’s Protocol on public service broadcastingnotes that “the system of broadcasting in the Member States is directlyrelated to the democratic, social and cultural needs of each society and to theneed to protect media pluralism.” In effect public service broadcasting is partof a society’s infrastructure.

RTÉ has identified the base level of licence fee necessary at this timeto provide an adequate programme of development to meet minimumaudience needs and entitlements. Proposed schedule enhancements,dependent on the implementation of an erosion-proofed €150 licencefee in January 2003, are detailed in Section 2 of this submission.

As demonstrated on this chart €150 would still leave Ireland with the thirdlowest licence fee as a percentage of per capita GDP in the EU.

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

0.90%

Denmark Austria SwedenUK

Belgium Germany Finland France Italy Ireland

Average - 0.59%

Information Source - OECD, European Broadcasting Union SIS

Licence Fee as % of per capita GDP - 2000

Key Current Level Increase to € 150

€ 88

€ 150

€ 91

€ 114

€ 166€ 173

€ 190€ 173€ 186

€ 221€ 253

€ 107


B. Adjustments to licence fee to prevent erosionA combined TV and radio licence fee was introduced in January 1962. Nine years later it was re-designated as a TV licence fee. In 1978 there was an ear-marked increase in the licence fee to make provision for a second television channel. It was predicated on a very low level of original indigenous production.

The following table illustrates the changes in licence fee graphed against cost of living increases (CSO) from 1978 to date.

The imperative of an inbuilt mechanism to prevent erosion is clear; if, for example, the licence fee had been index linked in 1978 its current level would be inexcess of €190. The most appropriate mechanism to prevent erosion would appear to be indexation – not least because key expenditure items required of RTÉare themselves index-linked, implicitly or explicitly; on such items as sports rights RTÉ has in recent years faced exponential growth in costs.

Information Source - CSO, RTÉ

Colour TV Licence Fee versus CPI - 1978 to 2002

0

25

50

75

100

125

150

175

200

1978197919801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002

Euro

Fee - € CPI


C. A balance between commercial and public revenues“ In reviewing the licence fee…the aim should also be to establish a moreappropriate ratio as between public and commercial revenues. In other Europeancountries the absolute level of the licence fee and the ratio of public to commercialfunding are both, in general, much higher than in this country.”(page 36, Report of the Forum on Broadcasting)

The scale of the imbalance in RTÉ’s revenue between public and commercialrevenue is striking when compared with fellow broadcasters in the EBU MediumMarkets.

RTÉ believes that there is a demonstrable need to gradually change the balance,through a mechanism of periodic review, to achieve the EBU Medium Marketaverage of 2:1 for public:commercial funding. This exercise is separate from, andindependent of any mechanism to prevent erosion. The financial projections 2003 –2006, section 4 of this submission, show that an erosion proofed licence fee of €150per annum would be a key step in the implementation of this recommendation.

D. Adjustments to the licence fee dependent on performanceRTÉ welcomes this recommendation and to facilitate its implementation hascommitted to publishing, on an annual basis, a Statement of Commitments inrelation to content. The commitments will be in both qualitative and quantitativeterms because ‘more’ does not always equal ‘better’. The Statement of Commitments will, for example, propose the quantitative mix for schedules, byindividual channel and genre, identifying new and repeat material. In television there will be identification of source – home produced or acquired. Theperformance will be independently evaluated and result in the licence fee increase, to protect against erosion, being approved, limited, refused or qualified.

Public Service Broadcasters Funding - EBU Medium Markets - 2001

99%

91%

73%

65%

64%

60%

58%

51%

37%

9%

27%

35%

36%

40%

42%

49%

63%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

RDP - Portugal (2000) *

ERT - Greece (1999) *

SRG-SSR - Switz

VRT - Belgium (2000) *

NOS - Netherlands

RTF - Belgium

ORF - Austria

RTP - Portugal (1999) *

RTÉ - Ireland

Public Funding Other Funding

Information Source - European Broadcasting Union SIS* Note - 2001 figures unless otherwise stated

Note: Portugal and Belgium both have two public service broadcasters inthe EBU Medium Market


1. Current Position

1.1 Existing ActivitiesRTÉ’s primary interaction with its owners – its audience – is via broadcasting. The organisation believes that its output must set standards of quality andbreadth of service for the entire audience and that its schedules must provide:

� a News Service trusted for its independence, authority and scope of coverage� current affairs to complement News with scrutiny, analysis and debate� documentary programming to range beyond the factual and analytic agenda of News and Current Affairs� drama, for the story-telling essential to our public culture and communication� sport for the pleasure of shared experience – local, national and international� entertainment to enrich our social life by presenting performing talent� programming to educate and entertain our children� acquired programmes that bring the best in all genres of production from abroad, and help to create mixed schedules with resources assigned to key home

production priorities.


RadioEvery day more than 1.6 million people listen to RTÉ Radio’s fournational channels: Radio 1, 2fm, Raidió na Gaeltachta and Lyric fm.Together they hold a 48% share of listening – almost half the nationalaudience – to prove the impact which RTÉ’s services have in thecommunity they serve.

The analysis of Radio 1 hours, for the first quarter of 2002, shows therange and diversity of programming choice.

Base -7am-7pm weekdays Information Source - JNLR-MRBI / RTÉ Audience Research

National Radio Share - 1998 to 2001

27% 27% 26%

2 % 2%

8 % 9%

39% 40%

5% 5 % 4%

31 %

27 %

18 %

19%19%20%20 %

1% 2%

6%

10%7%

38% 39%38%

4 % 4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1998 1999 2000 2001 2001/02

Radio 1 2fm Lyric fm Today fm H ome Local O ther Local

Radio 1 Hours Analysis - January to March 2002

Information Source - RTÉ Radio Analysis

Music31.16%

R1 Through The Night14.96%

Religious (Incl MW Split)1.41%

Irish Language1.05%

Weather & Sea Area Forec.0.62%

Children0.24%

Other3.33%

Drama/Comedy/Books/Arts7.20%

Sport(Incl. MW Split)6.18%

Features & Documentaries8.08%

News and Current Affairs29.09%

0 100,000 200,000 300,000 400,000 500,000 600,000

Five-Seven Live

John Creedon

Larry Gogan

Gareth O'Callaghan

News at One

Liveline with Joe Duffy

Today with Pat Kenny

Gerry Ryan

Marian Finucane

Morning Ireland

Reach

Information Source - JNLR-MRBI / RTÉ Audience Research

Radio 1

2fm

Ireland’s Top Ten Weekday Radio Programmes - July 2001 to June 2002


News and Current AffairsIndependent market research shows the consistently high regard for RTÉ’s news coverage of national and international affairs. There is less satisfaction withcoverage of regional and local affairs – hence the priority attached to regional developments since the initial research was undertaken.

The news coverage is supported by a central news room and by a network of correspondents – at home and abroad.

Fulltime Foreign Correspondents

Population (millions)

Number of Bureaux

Average per Million Population

Denmark 6 5 4 1.2Austria 17 10 11 1.7Finland 10 5 7 2Holland 10 12 10 0.8RTÉ 4 4 3 1

Correspondent Analysis

• RTÉ Newsroom– 14 Specialist Correspondents– 7 Regional Correspondents– 7 Regional Studios– 4 Foreign Correspondents– 5 Oireachtas Unit

• Foreign Correspondent Analysis

Information Source - RTÉ News

Quality of News Coverage

Very well covered

INTERNATIONAL NATIONAL REGIONAL/LOCAL

Neither

Fairly well covered

Poorly covered

33

Very poorly coveredDon't know

49

8

81 1

40

46

6

61

30

52

8

72

43

521

11

31

14

33

10

2

23

41

12

19

3 1

'95 '98 '00 '95 '98 '00 '95 '98 '00

41

49

45

11

43

47

621

24

43

14

16

2 1

'02

40

46

9

41

43

47

82

'02 '02

22

43

16

14

16

41

Base: Watch RTÉ 1 or Network 2 news programmes regularly - 88%Information Source - Landsdown Market Research

48


Audience trends in both News and Current Affairs are monitored by Nielsen and JNLR in television and radio respectively, as well as by specific research.Arising from research results, appropriate actions and specific solutions have been identified which have successfully addressed slippage.

� Note 1: share is the amount of viewing obtained by a particular programme, expressed as a percentage of all TV viewing in private households, acrossthe programme duration.

� Note 2: the charts show the remarkably high audiences RTÉ News and Current Affairs enjoy on a consistent basis.

National Channel, All Adults 15+ Information Source - AC Nielsen / RTÉ Audience Research

Television News and Current Affairs Trends

0%

10%

20%

30%

40%

50%

60%

1998 1999 2000 2001 2002-Sept0

100,000

200,000

300,000

400,000

500,000

600,000

6.01 Share 9 o'clock Share News2 Share Primetime Share6.01 Audience 9 o'clock Audience News 2 Audience Primetime Audience

Aud

ienc

e Sh

are N

umber of V

iewers

0

100,000

200,000

300,000

400,000

500,000

600,000

July 2000-June 2001 Jan-Dec 2001 July 2001-June 2002

Pro

gram

me

Rea

ch

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Mar

ket S

hare

Morning Ireland Reach News at One Reach This W eek ReachMorning Ireland Share News at One Share This W eek Share

Information Source - JNLR-MRBI / RTÉ Audience Research

Radio News Audience Trends


TelevisionThe television market in Ireland has changed dramatically in the past 20 years; with 80% of households receiving a minimum of 8 channels and some 270,000households receiving satellite Ireland is one of the most competitive markets in Europe. RTÉ’s market share is as a result under constant pressure.

Information Source - AC Nielsen Establishment Survey, 2002

Channel Penetration 2002

0 %

20 %

40 %

60 %

80 %

100 %

RT

E 1

Net

wor

k 2

TV

3

TG

4

UT

V/H

TV

BB

C1

BB

C2

Ch4

/s4c

Sky

One

Sky

New

s

Dis

cove

ry

MT

V

Eur

ospo

rt

Nic

kelo

deon

Per

cent

age

Pen

etra

tion

Peaktime - 18.00-23.30 Information Source - AC Nielsen / RTÉ Audience Research

Percentage Market Share in Multi-channel Homes - PeaktimeSept 1998 to Sept 2002 - RTÉ v TV3 v Others

27%

32%

9%11%

11%

2%

53%55%

0 %

1 0 %

2 0 %

3 0 %

4 0 %

5 0 %

6 0 %

Sep-98Nov-98Jan-9

9M

ar-99

May-99Jul-9

9Sep-99N ov-99Jan-0

0M

ar-00

May-00Jul-0

0Sep-00Nov-00Jan-0

1M

ar-01

May-01Jul-0

1Sep-01Nov-01Jan-0

2M

ar-02

May-02Jul-0

2Sep-02

R TÉ O ne Netw ork 2 TV 3 O thers


While all radio schedules consist almost entirely of home-produced programmes there is need for a mixture of both acquired and home-produced content ontelevision. Given economies of scale, acquisition is a cheaper option than home production and adequate public funding is a pre-requisite of maintaining aproper balance between the two content sources. Another balance that must be considered is that between first run programming and repeat transmissions.The latter have an important role to play in schedules. Members of the audience welcome the opportunity to reacquaint themselves with their favourite seriesand programmes or to have a second chance to see a programme they may have missed.

RTÉ Peaktime Programme Analysis - 01/02 Season

Home Production

Repeat18%

First Run82%

Acquired Programmes

First Run82%

Repeat18%

Peaktime - 18.00-23.30 Source - RTÉ TV Content System

Home Production

Repeat10%

First Run90%

Acquired Programmes

First Run76%

Repeat24%


Implementation of the programming proposals contained in this application will result in a significant re-alignment between home produced and acquiredcontent on air peak time 2002 to 2006, as shown below:

Total Actual/Projected Hours Broadcast RTÉ 1 & Network 2Peak time 18.00 - 23.30 hrs

Year 2002

Home Production(In-house & IPU)

40%

Acquired45%

Presentation1%

Promotions3%

Commercials11%

Year 2006

Home Production(In-house & IPU)

47%Acquired

38%

Commercials11%

Promotions3%

Presentation1%


Total Actual/Projected Hours Broadcast RTÉ 1 & Network 2 Peak time 18.00 - 23.30 hrs

Years 2002 - 2006

0:00:00

240:00:00

480:00:00

720:00:00

960:00:00

1200:00:00

1440:00:00

1680:00:00

1920:00:00

2160:00:00

Hours:minutes:seconds

Acquired 1839:34:56 1671:21:27 1609:21:27 1590:21:27 1581:21:27

In House/IPU 1666:59:48 1835:13:17 1897:13:17 1916:13:17 1925:13:17

Promotions 112:17:14 112:17:14 112:17:14 112:17:14 112:17:14

Presentation 54:43:54 54:43:54 54:43:54 54:43:54 54:43:54

Commercials 467:28:56 467:28:56 467:28:56 467:28:56 467:28:56

Year 2002 Year 2003 Year 2004 Year 2005 Year 2006


Archives

RTÉ’s archives are continuously growing with new material being acquired daily – at the rate of 10+ hours in television and 20+ hours in radio. A briefoverview of the current work shows:

Television Archive Radio Archive Stills� Comprises 50,000+ hours of broadcast video

material in a variety of formats.� Some 25,000 hours of broadcast material,

representing 77,000 items, have beentransferred to digital from older formats.

� Combined with the live archive, daily off airrecordings of output, it gives a total of 38,000hours of programmes in the digital collection

� Holds in excess of 100,000 hours of audio in avariety of formats – both analogue and digital.

� The digital live archive has been ongoing since1995 and there are now 25,000+ hours ofdigital audio. A radio archive project that hasbeen in operation since April 2001 hasdigitised almost 10,000 hours and cataloguedalmost 3,500 hours of legacy audio to date.

� The archive holds the most comprehensivecollection of audio material (including asubstantial collection of commercial materialof Irish interest) in the country representing allaspects of Irish life and culture, including thelargest collection of folk music in Europe.

� Holds approximately 400,000 images in avariety of formats including glass plates,negatives, contact prints, lantern slides, 35mlslides – both colour and black and white

� As well as the RTÉ collection it also holds theMurtagh, Cashman, Johnson and Shardcollections

� The first public exhibition of prints from theRTÉ collection was mounted recently.


Performing GroupsThe 2001/2 work commitments of RTÉ’s Performing Groups saw significant developments in the areas of live performance, education initiatives, new music,and broadcasts.

In 2001, audiences at live events for the RTÉ Concert Orchestra (RTÉCO) and the National Symphony Orchestra (NSO) rose by 42% and 22% respectively.Live broadcasts and recordings of the majority of these performances were also available to national and international audiences via Lyric fm, RTÉ's EBUpartners and the RTÉ Website. Commercial recordings with the Naxos label were released world-wide, with many being critically acclaimed in theinternational press.

By year end 2002, the Performing Groups will have presented a total of 234 performances, at national and local level; including 47 educationalconcerts/workshops, 15 performance seminars, and the premieres of five newly commissioned works by Irish composers as part of the new RTÉ LivingMusic Festival.

Additional highlights over the last 18 months have included collaboration, through the RTÉCO and NSO, with the Office of Public Works in producing twofestivals of music, free to the general public, at Farmleigh House and Estate; an increased number of out-of-Dublin tours by the RTÉ Vanbrugh Quartet. Ofmajor significance was the first community residency by an RTÉ orchestra, with the NSO breaking new ground through a week-long residency in West andNorth Kerry.


1.2 Current Financial PositionForecast Consolidated Income Statements, Balance Sheets and Cash Flow Statements for 2002 are set out on the following pages with relevant summaryextracts below:

Deficit before Exceptional Items� 2002 Forecast € 20.5m� 2002 Budget € 20.3m� 2001 Actual € 42.9m� 2000 Actual € 12.3m

Exceptional Charges� 2002 Forecast € 35.0m (including restructuring € 27.5m)� 2001 Actual € 34.1m (including restructuring € 21.5m)� 2000 Actual € 2.0m

Net Deficit� 2002 Forecast € 55.5m� 2001 Actual € 70.9m� 2000 Actual € 14.3m

The Aggregate Net Deficit for 2000, 2001 and 2002 is expected to amount to €141 million.

Capital Expenditure� 2002 Forecast € 13.4m� 2001 Actual € 31.6m� 2000 Actual € 24.2m

Aggregate Capital Expenditure for 2000, 2001 and 2002 is expected to amount to €69 m.


Net Cash & Marketable Securities(see bottom line page 26)Forecast as at 31/12/2002 € 21.7mActual as at 31/12/2001 € 77.8mActual as at 31/12/2000 € 149.1m

The net decline in RTÉ’s cash resources during 2000, 2001 and 2002 is expected to amount to a total of some € 156 m after adjusting for the balance of cashreceived in early 2000, in respect of the 1999 disposal of shares in Cablelink.

In summary terms the reduction in Cash over these three years is broadly made up as follows:

Operational Deficits and Working Capital (€48m)Capital Expenditure and Disbursements (€62m)Restructuring costs (€62m)Interest Receivable €16m

_______

€156m

This critical level of decline in RTÉ’s cash resources, predicted since early 2001, is manifestly unsustainable.


2. Vision for Service Development

2.1 RTÉ Radio – The Benefits of an Increased Licence Fee to the Audience

Radio 1, 2fm, Raidió na Gaeltachta and Lyric fm, hold a 48% share of listeners with a combined total of 35,000 hours a year of programmes that are nearly allhome-produced.

RTÉ Radio is committed to set standards of quality and breadth in broadcasting for the entire population. It provides a comprehensive service in Irish andEnglish. News and Current Affairs are central to its schedules, both in the prime daytime schedules and as part of the special interest output during theevening. Drama, documentary, sport, entertainment and music, cultural and religious programmes are produced for all age groups to meet a wide spectrumof tastes and expectations.

An increase in the licence fee income will improve the range and standard of the radio services. It will ensure the production and commissioning of newstrands of programmes and it will enrich the quality of existing series. By renewing the skills of the programme-makers and deploying the most cost-effectivetechnology, the increased licence fee will enable RTÉ Radio to:

� increase its output from the regions by reaching out to communities all over Ireland and reflecting their experiences to the nation� develop the national debate on public affairs, parliamentary proceedings and important social issues such as health, crime, transport,

science, education and the environment, as well as nationally important issues in business, science and technology� enhance and increase News and Current Affairs output for the audience under-35 years of age, with special emphasis on 2fm’s audience� commission the writing and production of innovative comedy and drama by engaging new Irish writers and actors to ensure that

contemporary work takes a prominent place in the schedules� encourage new Irish talent in music-making, the performing arts and in broadcasting� implement education and outreach programmes in association with RTÉ Performing Groups� achieve greater collaboration and synergy between the four national channels in producing and presenting services.

As virtually all the radio schedules are home-produced, these initiatives will not add to the number of hours of home-produced output. What they will do isto raise the quality and diversity of the mix in the schedules. They aim to create opportunities for new talent, with particular emphasis on talent outside themajor cities. They add to radio’s capacity to strengthen the substance of its news and current affairs as well as to attract younger listeners for whom theexisting formats and styles of presentation offer little attraction. They extend the range and ambition of the content on 2fm, Raidió na Gaeltachta andLyric fm by supporting new work and seeking new audiences. And they serve mainstream as well as minority interests.


This set of developments takes risks and initiatives of the very kind that public funding is intended to promote. They represent distinctive choices made by apublic broadcaster in response to the challenge of doing new work for new listeners.

Radio PrioritiesThe chart below describes in detail specific radio projects, series and programmes by channel with their related costs, the timescale for their commencementand the number of hours of output in each category.

Station Programme Area Tx Date Annual2002 Prices - € 2003 2004 2005 2006

Originate 40 prime daytime programmes a year from regions Q1 2003 100,000 60 60 60 6026 hours a year of social documentaries Q2 2003 130,000 16 26 26 2620 hours a year of comedy and drama for younger audiences for broadcast on 2fm and Radio 1 Q3 2003 100,000 10 20 20 20Enhance Oireachtas, EU Parliament and NI Assembly coverage jointly with News Division Q2 2003 60,000

390,000

Enhance and increase News and Current Affairs output for the audience under-35 Q3 2003 120,000 60 125 125 12526 hours a year of student access programming Q2 2003 78,000 16 26 26 26Invest in Independent Radio Production for 2fm By Q1 2004 200,000 52 52 52Develop feature programmes employing new technologies enabling interactive features Q2 2003 160,000 13 26 26 26Increase regional output of live music Q2 2003 60,000 2 4 4 4

618,000

Additional Drama – 25 hours a year Q2 2003 85,000 17 25 25 25Additional Features and documentaries – 20 hours a year Q2 2003 60,000 15 20 20 20Additional Young People’s programmes – 20 hours a year Q3 2003 25,000 10 20 20 20Additional urban and outlying regional programmes – 25 hours a year Q4 2003 40,000 6 25 25 25

210,000

Education and outreach programmes, jointly with Performing Group Q3 2003 50,000Music / Community / Arts Festivals Q3 2003 100,000 25 50 50 50Re-instate Young Musician of the Future Q3 2003 100,000 2 5 5 5Contemporary spoken arts – 12 hours a year Q3 2003 50,000 6 12 12 12Commission new music for broadcast Q3 2003 50,000 5 10 10 10

350,000

Radio Programme Development Fund 250,000Radio DPC Special Events 2004 - 2006 (To cover Olympics,World Cup etc.) 250,000

Note Projects listed above are in order of priority by channel. 2,068,000

Lyri

c fm

Programme Hours

Rad

io 1

2fm

Rai

dió

na

Gae

ltach

ta


2.2 News and Current Affairs – The Cornerstone of the Schedules

An increase in licence fee income will be used to expand and deepen News and Current Affairs coverage and to provide substantial additional material for theschedules on TV and Radio. The specifics identified take advantage of new work practices, such as self-editing by journalists and crews, and maximise thepotential of Studio 3, Single Operator Control Room (SOCR) and other News facilities.

News Gathering / Special Events Contingency

Area Description Approx. Costs € – at 2002 Prices Avail. PriorityRegionalCorrespondents

Two additional correspondents based in Dundalk and Dublin.Operating as Video Journalists (VJs) they will have onecamera crew between them. This will facilitate extra regionalprogramming and enhancement of main news programming onradio and television.

Approximate cost of correspondents andcrew - €300,000

Q1 2003 High

EducationCorrespondent

Fills a serious gap in RTÉ’s public service requirement. Thiscorrespondent will also provide a radio series as part of his/herbrief as well as contributing to and enhancing all News andCurrent Affairs output.

Approximate cost €100,000 Q1 2003 High

NewsInvestigative Unit

This Unit will work with the Chief News Correspondent onbreaking stories and following up major news events for allRadio and Television News.

Approximate cost €150,000 Q2 2003 High

Foreign Activity An initiative to deepen and increase our on-location foreignreporting for all News and Current Affairs output. This willallow for long-term presence on the ground and coverage ofrunning stories.

Approximate total cost €300,000 Q1 2003 High

Special EventsContingency

Increased outside broadcast coverage of major national events.For example, State visits, Policy Forums and significant publicoccasions. More Outside Broadcasts for Questions & Answersand Prime Time.

Approximate cost €1,000,000 Q2 2003 Medium

€1.8m approx.


News and Current Affairs – TelevisionArea Description Approx. Costs € Tx Priority Programme Hours

at 2002 Prices 2003 2004 2005 2006PoliticalProgramme

A new Sunday evening programme of 40 minutes duration produced fromStudio 3. Annual run of 32 weeks – total time 21 hours.

Cost: €30,500 perhour – €640,000

Q2 2003 High 10 21 21 21

Nationwide 3 days a week for the programme with a complete revamp and additionalproduction resources. An additional 42 programmes per annum

Cost: €20,000 perhour – €420,000

Q1 2003 High 21 21 21 21

Children’s NewsProgramme

7-10 minutes into the Den on Network 2 each afternoon. Funded for 2003,but this may require full funding in 2004. 45 weeks, 5 days a week @ 8minutes is approximately 30 hours.

Cost: €10,000 perhour – €300,000

Q1 2003 High 30 30 30 30

Current Affairsinvestigativestrand

A series of 10 ‘event’ documentaries on important national issues that willgenerate national debate and reaction. Total programming 10 hours.

Cost: €80,000 perhour – €800,000

Q3 2003 High 3 10 10 10

BusinessProgramme

A weekly programme on national and international business issues. 32x40minutes programmes – total of 21 hours

Cost: €30,500 perhour – €640,000

Q3 2003 High 10 21 21 21

Regional NewsProgramme

Contingent on the appointment of two additional regional correspondents.This will be a weekly round-up of significant regional news stories. 44weeks and 30 minutes a programme – total 22 hours.

Cost: €7,000 perhour – €154,000

approx.

Q2 2003 Medium 11 22 22 22

Early MorningTV NewsBulletins

Addresses a significant gap in our Television News service. This will alsofacilitate development of our Online News capacity by giving the potentialfor round-the-clock online news. Six-minute bulletins at 7.00, 8.00 and 9.00five days a week – total of approximately 72 hours per annum. This woulduse the News-developed SOCR (Single Operator Control Room) studiowhich allows short-duration bulletins to be put to air in a cost effective waywithout the necessity for a full studio crew.

Cost: €5,500 perhour – €400,000

approx.

Q2 2003 Medium 36 72 72 72

Order ofBusiness

A morning programme covering Leaders’ Questions in the Dáil, withanalysis. This would be 2 days a week, 64 programmes of 30 minutesduration. Approximately 32 hours per annum.

Cost: €1,500 perhour – studiocosts only –

€50,000 approx.

Q2 2003 Medium 16 32 32 32

€3.4 m approx.


News – RadioArea Description Approx. Costs € Tx Priority Programme Hours

at 2003 Prices 2003 2004 2005 2006NewsProgramme for2fm

This would provide 2fm with News Programming five days a weekenhancing the existing bulletin service with more substantial feature reportsand analysis. Up to 30 minutes a day and 50 weeks a year. Approximately125 hours a year.

Cost: €150,000 Q2 2003 Medium 60 125 125 125

Regional NewsHeadlines onRadio

Daily news headlines from the regions in the News At One. This would bepossible with the appointment of the extra regional correspondents and withsome extra Newsdesk co-ordination. 5 minutes a day by 50 weeks – total 21hours.

Cost €65,000 Q1 2003 Medium 20 21 21 21

€215,000 approx.

Unprojected RevenueNote: any unprojected or windfall revenue would be used to develop a TV morning news programme

Area Description Approx. Costs € Tx Priority Programme Hoursat 2002 Prices 2003 2004 2005 2006

News andBusinessProgramme

From September 2005, the early morning TV News Bulletin could move to afull early morning programme, 2hrs per day, 40 weeks a year.

Cost €6,000 perhour - €2,400,000

Q4 2005 Medium 100 400

€2.4million


2.3 RTÉ Television – Television for All the Irish People

The Commitment to the AudienceRTÉ Television is the window on Ireland and the world for most Irish people. In an age of ever increasing competition from internationally owned mediaorganisations, the Irish people’s own television services will continue to be the channels of most relevance. The passions, concerns and interests of RTÉ’sowners, the Irish people, will be foremost.

The Dividend for the AudienceA licence fee increase must result in a dividend for the audience on air and as soon as possible. The difference must be distinctive and relevant programmingfor Irish audiences at peak viewing times. RTÉ’s commitment to the audience in return for enhanced funding is to:

� deliver more Irish, and Irish interest content into our peak time schedules� rely less on programming acquired from international sources� develop Irish journalistic and artistic talent to cater for the needs and expectations of our audience� invest in new Irish creative talent in drama, music and entertainment� reflect Irish society in all its cultural and political diversity� address in our programming all ages, social classes and regions� provide Irish children with distinctive home production which reflects their lives.

It must be noted that the assumptions and programme proposals after 2003 are based on RTÉ’s current analysis of schedule requirements and these willnecessarily change as audience needs and the competitive environment changes.


The Specifics

RTÉ will give effect to these commitments in the following areas, and these specific actions are designed to maximise and optimise Irish content in peakviewing times:

Children /Young People

� A Children’s News Service� New Children’s Drama� New Arts, Music, Science strands for Den TV� New Teenage weekly Drama serial

Regions � Expansion and Enhancement of Nationwide� Two new Regional Correspondents and expanded

Regional News coverage� Increased production from RTÉ Cork

Factual / Arts � Series of Investigative documentaries� New Irish History series� New Documentary strand examining contemporary Irish

life� New Factual series for a younger audience� New Arts documentaries

News and CurrentAffairs

� Creation of Investigative Unit� Early Morning Television Bulletins� Expanded Political coverage� New Business programme� Education Correspondent� Expansion of location foreign reporting

Drama � Fair City goes to 4 nights per week all year� New Sunday night Drama series� New Monday night Drama series� New Summer Drama series� Increased support for Irish Feature Film production

Irish � New bilingual Irish Music programme� Sustain and enhance RTÉ programming for TG4� Primetime transmission for quality TG4 programmes on

RTÉ*

Entertainment /Music

• New Summer Entertainment show• New Comedy on Network 2• New Family Entertainment series• New Initiative covering major Musical and Cultural

events across the country

Education � Irish Language Learning series� New life long learning and Curriculum based series

* This action is not reliant on additional Licence Fee income


These commitments will mean:

� 25%+ increase in peak time Home Produced Drama on RTÉ1 by 2006

� 28%+ increase in Home Produced Young People’s programming on RTÉ1 and Network 2 by 2006

� 16%+ increase in peak time Factual and Historical programming on RTÉ1 by 2006

� 10%+ increase in peak time Factual and Historical programming on Network 2

� 30%+ increase in Entertainment programming on RTÉ1 and Network 2

� 45%+ increase in Home Produced programming during Summer months

� 30%+ increase in Irish Language and Bilingual programming

� 17%+ increase in News and Current Affairs programming by 2006

� 50%+ increase in subtitling overall; 80%+ increase in peak time subtitling

These specifics are elaborated in the charts on the following pages

Proposed HoursThe hours used in the charts over leaf are Actual Broadcast Hours and projected Actual Broadcast Hours and are calculated using the internationally acceptednorms.


Implementation of the specifics outlined would result in changes as follows for RTÉ 1 and as overleaf for Network 2 in key EBU genres.

Breakfast News programme for 2005/2006 is not reflected in peaktime chart

RTÉ 1 Factual News & CurrentAffairs

Drama Entertainment Music

Increase from 2002 to 2006 45+ hours 60+ hours 30+ hours 40+ hours 10+ hours

R T É 1 H o m e P r o d u c t io n (A c tu a l B r o a d c a s t H o u r s ) Y e a r s 2 0 0 2 - 2 0 0 6 P e a k t im e 1 8 :0 0 h r s - 2 3 :3 0 h r s

K E Y G E N R E S T R A N D S - W ith A d d it io n a l F u n d in g

0 :0 0 :0 0

1 2 0 :0 0 :0 0

2 4 0 :0 0 :0 0

3 6 0 :0 0 :0 0

4 8 0 :0 0 :0 0

6 0 0 :0 0 :0 0

7 2 0 :0 0 :0 0

H o u r s :m in u te s :s e c o n d s

F a c tu a l 2 9 7 :2 4 :0 8 3 2 8 :0 0 :0 0 3 4 0 :0 0 :0 0 3 4 2 :0 0 :0 0 3 4 7 :0 0 :0 0

N e w s & C u r re n t A f fa ir s 5 3 9 :3 5 :1 9 5 9 5 :0 0 :0 0 6 0 4 :0 0 :0 0 6 0 4 :0 0 :0 0 6 0 4 :0 0 :0 0

D ra m a 1 1 1 :5 7 :2 9 1 2 9 :0 0 :0 0 1 3 3 :0 0 :0 0 1 4 1 :0 0 :0 0 1 4 5 :0 0 :0 0

E n te r ta in m e n t 1 6 3 :5 5 :4 7 1 8 7 :0 0 :0 0 1 9 6 :0 0 :0 0 2 0 5 :0 0 :0 0 2 0 5 :0 0 :0 0

M u s ic 3 1 :2 0 :3 0 4 2 :0 0 :0 0 4 2 :0 0 :0 0 4 2 :0 0 :0 0 4 2 :0 0 :0 0

2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6


Network 2 Factual News & Current Affairs Entertainment MusicIncrease from 2002 to 2006 5+ hours Approx. 20 hours 20+ hours Approx. 10 hours

N e tw o rk 2 - H o m e P ro d u c tio n (A c tu a l H o u rs B ro a d c a s t) Y e a rs 2 0 0 2 - 2 0 0 6 P e a k tim e 1 8 :0 0 h rs - 2 3 :3 0 h rs

K E Y G E N R E S T R A N D S - W ith A d d itio n a l F u n d in g

0 :0 0 :0 0

1 2 :0 0 :0 0

2 4 :0 0 :0 0

3 6 :0 0 :0 0

4 8 :0 0 :0 0

6 0 :0 0 :0 0

7 2 :0 0 :0 0

8 4 :0 0 :0 0

9 6 :0 0 :0 0

1 0 8 :0 0 :0 0

H o u rs :m in u te s :s e c o n d s

F a c tu a l 8 7 :3 4 :1 0 9 4 :0 0 :0 0 9 4 :0 0 :0 0 9 4 :0 0 :0 0 9 4 :0 0 :0 0

N e w s & C u rre n t A ffa irs 6 7 :4 5 :5 9 7 7 :0 0 :0 0 8 8 :0 0 :0 0 8 8 :0 0 :0 0 8 8 :0 0 :0 0

D ra m a 3 2 :2 3 :1 1 3 3 :0 0 :0 0 3 3 :0 0 :0 0 3 3 :0 0 :0 0 3 3 :0 0 :0 0

E n te rta in m e n t 4 4 :1 4 :1 6 5 0 :0 0 :0 0 6 7 :0 0 :0 0 6 7 :0 0 :0 0 6 7 :0 0 :0 0

M u s ic 4 4 :3 5 :4 2 5 4 :0 0 :0 0 5 4 :0 0 :0 0 5 4 :0 0 :0 0 5 4 :0 0 :0 0

2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6


Home Production in Young People’s programming would increase from 659 hours in 2002 to 848 hours in 2006, an increase of nearly 30%.

RTÉ1 & N etw ork 2 - Young People's Program m es (Actual Hours Hom e Production) Years 2002 - 2006 - W ith Additional Funding

0:00:00

120:00:00

240:00:00

360:00:00

480:00:00

600:00:00

720:00:00

840:00:00

960:00:00

Hours:m inutes:secondsYoung People 659:00:00 770:00:00 836:00:00 839:00:00 848:00:00



Sports programming can dramatically change from year to year due to thescheduled international activities of interest to Irish audiences.For example in 2002 – World Cup, 2004 – Euro Soccer and Olympics,2006 – World Cup.

By 2006 an additional 15+ hours Irish language output will be broadcastrepresenting a 20%+ increase from 2002. In addition to the home productionshown here, RTÉ will acquire 60 hours per annum from TG4 for broadcast inpeak time.

Sports initiatives in train include a new magazine programme focussing ondomestic rugby, beginning January 2003 and improvements to the SundayGame in 2003 to enhance GAA coverage. A new Saturday afternoon “SportsStadium” is under consideration to afford greater access to Sports which donot currently enjoy major television coverage.

Irish Language Learning series (10hrs) to be broadcast across 2003/2004.Additional funds from 2004 to 2006 will go to other new Irish language series(13hrs) plus increase in Educational programming (6hrs per annum). IrishLanguage Learning series will be repeated in 2005 but repeat hours are notshown in bar chart.

RTÉ 1 & Network 2 SPORTS - Years 2002 - 2006

0:00:00

120:00:00

240:00:00

360:00:00

480:00:00

600:00:00

720:00:00

840:00:00

960:00:00

1080:00:00


Sports 923:48:02 644:00:00 950:00:00 600:00:00 850:00:00


RTÉ 1 & Network 2 Irish Language (Home Production Actual Hours Broadcast in the Irish Language)

Years 2002 - 2006

0:00:00

12:00:00

24:00:00

36:00:00

48:00:00

60:00:00

72:00:00

84:00:00

96:00:00

108:00:00

Hours:minutes:secondsIrish Language 77:49:16 88:00:00 99:00:00 95:00:00 95:00:00



Approximately 500 extra hours of peak time programming will be subtitledby 2006 (over the 2002 figure). This represents an increase of nearly 80%.

An additional 170+ hours of peak and non-peak News and CurrentAffairs will be provided in 2004 over and above the figure for 2002,an increase of 17%. This excludes the proposed new Children'sNews Programme of 30 hours per annum, which is included in thechart for Young People’s programmes.

News & Current Affairs RTÉ 1 & Network2 - 2002 - 2006Actual/Projected Hours - With Additional Funding

900

950

1000

1050

1100

1150

1200

Hours

News & Current Affairs 999 1097 1172 1172 11722002 2003 2004 2005 2006

RTÉ 1& Network 2 - Home Production Subtitling Years - 2002-2006 Peak time 18:00 hrs - 23:30 hrs

0:00:00

120:00:00

240:00:00

360:00:00

480:00:00

600:00:00

720:00:00

840:00:00

960:00:00

1080:00:00

1200:00:00


Subtitling 619:56:10 778:00:00 936:00:00 1040:00:00 1116:00:00



Television Priorities – giving the best to the Audience

The strategy adopted in prioritising programming spend in the context of additional licence fee money has been to examine a range of proposals againstagreed criteria.

These criteria are as follows: -

1. Distinctly Irish programming2. Enriching the schedules3. For Transmission in primetime4. Maintaining and increasing RTÉ’s share5. Cost-effective

The underlying logic and ambition is to bring additional relevant programming to the Irish audience; programming not already available to the audience fromother broadcast sources, at times when they are available to watch and at a cost which represents value for money.

The programme areas reflected in RTÉ’s submission to the Forum on Broadcasting and those identified in the Forum’s report have been given priority. Inaddition, areas of the schedule that are currently particularly weak have also been identified and are reflected in these commitments. The intention is to deliveradditional programming which is distinctive, is patently an appropriate use of additional licence fee, and which will assist the two TV channels to retain andgrow their share of viewers in primetime, thereby bringing this publicly funded programming to the greatest possible number of viewers.


Programme Priorities – High

Hours noted in the Financial Schedule are Production Commercial Hours and are based on expected production timeframe.


Programme Priorities – Medium

Hours noted in the Financial Schedule are Production Commercial Hours and are based on expected production timeframe.


3. Changing Structures

3.1 ReportingRTÉ is committed to operating across all aspects of its public service remit in an open and accountable fashion. Putting the audience first includes fullfinancial accountability, but also accountability in a variety of other terms including:� commitments made to the audience� value for money� fair trading with respect to a range of activities� legislative requirements.

RTÉ has proposed to the Minister for Communications, Marine and Natural Resources a draft Public Service Broadcasting Charter, (Appendix II), which itenvisages will be the subject of public consultation before being finalised. The Charter will be reviewed periodically. RTÉ will prepare an annual Statementof Commitments, complementary to the Charter and which will contain specific promises, for example in terms of output, that are measurable and which ineffect form a contract with the audience. A draft Statement of Commitments for 2003 is also presented in Appendix II, with the draft Charter.

In order too facilitate a more structured communication with the audience, RTÉ will launch an Audience Council during the first half of 2003. The structureand purpose of the Council is outlined in Appendix III.

RTÉ is also introducing a Code of Fair Trading Practice, Appendix IV, which will cover a range of current and future activities and includes a complaintsmechanism and a suggested form of external recourse.

Financial ReportingRTÉ is implementing a new organisation-wide, Enterprise Resource Planning (ERP) system, Agresso, which will go live in Q1 2003. This is part of theradical overhaul of RTÉ’s accounting systems, practices and procedures. Taken together with the recruitment of additional accountancy expertise and theestablishment of the IBDs the implementation of Agresso will result in significantly improved financial controls with a high level of financial transparency,accountability and quality reporting.

The charts on following pages show how RTÉ proposes to report on key measurables across the organisation and in individual IBDs.


Financial and Personnel InformationMeasurable Targets Source Ability to DeliverIncome � Licence Fee

� Advertising� Other – RTÉ Guide, Network Income, Merchandising, Programme Sales,

etc.

Agresso Yes

Total Expenses � TV Programming – Cost of Content, Broadcasting, Cost of Sales, etc.� Radio Programming - Cost of Content, Broadcasting, Cost of Sales, etc.� News Programming – Cost of Content of News and Current Affairs� Publishing� Performing Groups – Orchestras and Choirs� Transmission Costs� Cost of non-broadcast commercial activities� TG4 Programming – TG4 to provide this

Agresso

TG4

Yes

TG4 to provideNote 1

Analysis of total spendon programming bygenre

� RTÉ in-house production� IPU� non-IPU commissioned production.

Agresso Yes

An analysis of administrative expenditure Agresso YesLevel of Executive Board remuneration (including bonuses and benefits) and the criteria against whichbonuses are paid

Manual Yes

Pricing policy adopted with regard to selling programmes – Hours Sold and Revenue Generated Agresso/DistributionCompany

Yes

Details of the costs charged for providing access to the transmission network, to other Irish broadcasters Note 2

� Note 1: TG4 – The exact nature of the information being provided by TG4 still needs to be determined.� Note 2: Network – The Network costs will be available. It should be noted these costs will have been prepared on the basis that Network is part of RTÉ. A Regulator

however may subsequently determine that such information and accounts be prepared and presented on a different, and as of now, undefined basis.


IBD InformationMeasurable Targets Source Ability to DeliverSeparate income andexpenditure accounts foreach of the main IBDs

� TV� Radio� News (Note – Intermediate I&E)� Publishing� Performing Groups� Network (Note – Intermediate I&E)

Agresso Yes

Staffing Levels � TV� Radio� News� Publishing� Performing Groups� Network

Peoplesoft Yes – Q3 2003

Staffing Costs � TV� Radio� News� Publishing� Performing Groups� Network

Agresso Yes

Organisation StructureMeasurable Targets Source Ability to DeliverThe organisational structure with the names and roles of key personnel Manual Yes

RTÉ RadioMeasurable Targets Source Ability to DeliverNumber of hours of broadcasting output by genre, by station and by source Manual System at

presentYes – Q2 03

The cost of broadcasting output by source, by genre and by station/channel Agresso YesThe percentage of programmes broadcast more than once Manual System at

presentYes – Q2 03

RTÉ Radio’s market share versus competitors – National, Dublin, Cork JNLR / MRBI Yes

RTÉ News and Current AffairsThese areas are reported through the Financial and Personnel Information section and the Television and Radio IBDs.


RTÉ TelevisionThe following will be given by channel where possible.

Measurable Targets Source Ability to DeliverNumber of hours of Broadcasting Output, by genre and by source TV Content System YesThe cost of content output by genre and by source (In-house and Independent Production only) See Note 3 Agresso YesThe percentage of programmes broadcast more than once, by genre TV Content System YesThe percentage of original indigenous programming hours that are broadcast during peak viewing hours (6p.m. to 11.30 p.m.), and the related spend on this programming. See Note 3

Agresso & TVContent System

Yes

Cost per hour of originated programme broadcast by genre. See Note 3 Agresso & TVContent System

Yes

RTÉ’s market share relative to competitors – National Share / Multi-channel Share, All Day and Peak(18.00-23.30)

AC Nielsen System Yes

Subtitles information – specific output for news programmes TV Content System Yes

Total spend on originated programming (in-house and independent sector production) versus the spend ofacquisitions

Agresso Yes

Analysis of RTÉ’s commitment to the independent production sector Agresso / IPUAnnual Report

Yes

Sales by RTÉ of RTÉ produced content – Hours Sold and Revenue Generated Agresso YesSales of RTÉ commissioned content – Hours Sold and Revenue Generated Distribution

CompanyYes

Total hours of co-production IPU Annual Report YesTG4 Refer to TG4 TG4 (Note 1)Archives – spend by category, content by genre, % programmes digitised, revenues Agresso Yes

� Note 3: Cost of Content Broadcast – RTÉ’s accounting policy in relation to programme expenditure is to expense all programme expenditure in the year in which it isincurred as it has been considered prudent to do so. Programme inventory values thus are not carried in the balance sheet for untransmitted or uncompleted programmes.As a result however the cost of content reported through Agresso will not in the case of all programmes correspond to the cost of material broadcast in a reporting period.


PublishingMeasurable Targets Source Ability to DeliverAn outline of the main development / initiatives in the Publishing IBD IBD YesIncome and Expenditure Account for Publishing Agresso YesIncome and Expenditure Account, costs, costs of services etc for – Aertel / Online / SMS Agresso Yes

Performing Groups – Orchestras and ChoirsMeasurable Targets Source Ability to DeliverNumber of public performances by GroupNumber of public performances by Location

Manual Yes

Number of recordings hours, by Group Manual Yes

NetworkMeasurable Targets Source Ability to DeliverIncome and Expenditure Account, costs, costs of services etc Agresso Yes

3.2 ComplianceCompliance is a critical element of all reporting mechanisms; as a statutory body regulated by the Broadcasting Acts and other legislation, RTÉ must beaccountable, both for the way in which it carries out its operations and in the way it expends public moneys. Members of the public who seek informationabout RTÉ or who wish to complain about its services are entitled to find an organisation committed to accountability and openness.

The following are specific examples of compliance mechanisms that will be operated by RTÉ.

Freedom of Information ActSince April 2000 RTÉ is covered by the terms of the Freedom of Information Act (FoI), and has to date received over 400 requests for information or recordsabout RTÉ’s management, finances, administration, etc.

RTÉ has in place a clear structure which:� describes people’s rights to access information under FoI� provides an accountable service� provides an internal review process, by a more senior officer to initial respondent, if the applicant is not satisfied with the initial response.


Specific time frames apply to all stages of the process:� requests for records acknowledged within a week of the receipt of the request� full reply within four weeks� review process completed within three weeks of receipt of the request for review.

Complaints about programmingRTÉ makes a commitment in its Guidelines for Programme-Makers, available to the public free of charge to respond to all complaints about mattersbroadcast within 20 working days of receipt of the complaint. As for FoI an appeal process is available if a member of the public is not satisfied with theresponse s/he receives. The Complaints Review Committee chaired by a more senior officer to the initial respondent carries out reviews. The ComplaintsReview Committee always:• informs members of the public of their rights to take their complaints to the Broadcasting Complaints Commission (BCC)• provides information about how to contact the BCC and its terms of reference.

RTÉ is committed to establishing an Audience Council by quarter 2 of 2003, and believes it would be appropriate for a member of that Council to form partof the Complaints Review Committee.

The Broadcasting Complaints CommissionComplaints that relate to issues of objectivity and impartiality, or privacy or certain areas of advertising may be made to the BCC. RTÉ responds to allcomplaints received from the BCC within 21 days of receipt of the complaint.

Between January – October inclusive of 2002 the BCC received some fifty complaints from members of the public who believed that some aspect of RTÉ’sprogramming breached regulations. Twenty-two of these complaints have to date gone to full adjudication, with the complaint being upheld in two cases andrejected in twenty cases.

RTÉ publishes the findings of the Commission’s deliberations in the RTÉ Guide, and if requested to do so by the BCC will broadcast any finding whichupholds a complaint at a time appropriate to the broadcast that led to the original complaint.


Code of Fair Trading PracticeTo coincide with the publication of the Code of Fair Trading Practice, RTÉ intends to introduce a complaints system for anyone who believes that there hasbeen a breach of the Code. Internally the system, will be based on existing practices as outlined above, and will ensure:� a full response to any complaint will issue within 20 working days of the receipt of the complaint� a review process will be available to any complainant not satisfied with the response s/he receives� the review process will be carried out by a Code of Fair Trading Practice Review Committee, chaired by an officer more senior than the initial

respondent� the review will inform the complainant of his/her rights to seek an external independent review of both the initial response and the Review Committee’s

response.

RTÉ believe that, under existing legislation, the Competition Authority could undertake the review.

The CharterRTÉ is committed to the introduction of a Broadcasting Charter. This Charter will lay down clear commitments to the level of service the public can expectfrom its public service broadcaster. If a member of the public feels that RTÉ has in some way failed to fulfil a promise made in the Charter s/he will beentitled to initiate a review process. As with other complaints the process will have three tiers. The first response, which will be issued within 20 workingdays, a review of the initial response by someone more senior than the initial respondent and a guarantee of the provision of information about anymechanism for independent external review which may exist. It is the recommendation of the Forum of Broadcasting that the independent external reviewshould form part of the function of the Broadcasting Authority of Ireland when it is established.

Information and Record-KeepingRTÉ recognises that information and knowledge are essential parts of any process of compliance. RTÉ is committed to a full and open administration andmanagement of all its operations and to maintenance of comprehensive record keeping. RTÉ is further committed to making as much information as possibleavailable to members of the public who seek it, withholding only that material which is essential for editorial and commercial activities.


3.3 Operating

Change ProgrammeFollowing the proposal of an outline strategic plan by the Executive Board, the RTÉ Authority commissioned independent consultants to undertake acomprehensive review of the proposal and develop a detailed plan. Subsequently the Authority committed to a radical change in how RTÉ does its businessembarked on a process of change to be implemented by the end of 2003.

The process represents a significant challenge at all levels of RTÉ. Its successful implementation, within an extremely demanding timeframe, willfundamentally alter the organisational life of RTÉ and will provide a viable and sustainable environment for television and radio programme making.

The rationale for this programme of change is based in the recognition that:� the organisation’s structure needs to fit more closely to its primary purpose� responsibility for activities and their associated costs should be co-located� decision making in respect of all related costs and revenues should be integrated� flexibility of response is vital in an uncertain and rapidly changing world� more comprehensive accountability is a key requirement for a body in receipt of public funding.

The principal elements of the change process include:� the establishment of new Integrated Business Divisions (IBDs) for Television, Radio and News� the introduction of base loading in television programme production� the reduction in the scale and cost of centrally located activities� the achievement of greater effectiveness in commercial revenue generation� development of an RTÉ asset management strategy.

Much progress has already been achieved: the integrated divisions have been established: the three managing directors appointed; the recruitment process hascommenced for senior level finance personnel; human resources devolution is already underway; technology and IT devolution is at an early stage. Furtheraction is set out in the chart overleaf, which sets out a range of key actions with associated timescales.


Key Activity Start End Key BenefitSecond tier management appointments in the three main IBDsmade

Q4 ‘02 Q1 ‘03 Senior management team in place is core to the IBD process.Establishment of clear reporting relationships.

Operational roll-out of baseloading facilities in TV Q1 ‘03 Q3 ‘03 Result in reduced cost structure and increased flexibility forprogramme making. Establishes comprehensive bases fortelevision programme costing.

Departure packages designed and offered to staff Q4 ‘02 Q4 ‘02 Essential for staff departuresStaff Departure Process Q1 ‘03 Q2 ‘03 Achieves optimum staffing levels and realises budgetary

objectives.Physical devolution of Sales, Finance and Technology personnelto IBDs

Q4 ‘02 Q2 ‘03 Completes the development of IBD structures.

Roll out of work practice changes Q4 ‘02 Q3 ‘03 Increased flexibility in scheduling, production, etc. AchievingIBD objectives; helps realise budgetary targets

Implementation of staff appraisal system for all staff Q1 ‘03 Q4 ‘03 Ensuring consistent approach to staff evaluation anddevelopment, which will be integrated into managerial processesthereafter.

Roll out of Agresso (ERP) Phase IPhase II

In TrainQ2 ‘03

Q1 ’03Q1 ‘04

Meeting enhanced financial control and reporting.Enhanced programming and activity based costing (ABC).

Conclude Service Level Agreements between IBDs Q1 ‘03 Q2 ‘03 Setting the basis fir effective working relationships with clearand well understood objectives

As part of the process of reviewing the level of central services and of recasting production and other functions within the IBDs the numbers of staff in theorganisation will reduce. The additional public funding will permit additional internal production in RTÉ. It will be important to ensure that staff with skillsand / or experience not easily replicated, are not released in a staff reduction programme if those skills would be required for the increased production. Thefollowing table outlines the expected departures and the related savings under “steady” and “expanded” states.

Staff Departures – 2003 Steady State Expanded StateNumbers 156 110 – 130Salary Cost Saving (1/2 Year) €3.62m €2.56m – €3.02m


The key benefits of the programme will be:� The commitment to output will be reinforced with reduced expenditure helping to make increased funds available to programme-making� Decision-making will be integrated in the IBDs. For Radio and Television the Managing Directors will have responsibility for all costs and revenues

together with the concomitant accountability. The News IBD will be a cost recovery entity servicing the agreed needs of radio and television subject tomeeting defined public service obligations to be articulated by the Director-General.

� RTÉ’s cost base will be more flexible� Greater organisational effectiveness will return better value to licence payers through more productive use of public funding and through enhanced

schedules� A comprehensive and robust system of internal and public financial reporting will enhance transparency and reinforce accountability� Early cost savings through staff reductions will be realised as outlined above

Based on the KPMG/Logical recommendations the Change programme iscurrently centralised with a small team working with the existing divisions tofacilitate the development of the new IBDs and the devolution of staff andresources from the centre. At the beginning of 2003 most members of the teamwill devolve to work within the new IBDs, reporting to the Managing Directors.A central co-ordination process will be retained to direct the completion of theprogramme.

The key areas of concern for the central unit will be:� focus on interdivisional matters� monitoring divisional performance� reporting to the Director-General and to the Authority

Progress reports will be submitted to the Director-General (fortnightly), to theAuthority Sub-Committee (fortnightly) and to the Authority (at each meeting).The Director-General will review each report with the Executive Board. Theprincipal reporting lines in the change process are outlined in the organisationalchart opposite.

The tests of the change process for the Executive Board and for the individualMDs at the end of 2003 will be – budget performance, achievement of theStatement of Commitments and introduction of the necessary organisational,operational and procedural change.

Change Process - principle changes, reporting lines

AuthoritySub-committee

Director GeneralExecutive Board

MD - O&D MD - TV MD - Radio MD - News CFO

CentralChange

ChangeManager

ChangeManager

ChangeManager*

Publishing*

* Shared Change Manager


New Structures and objectivesThe current working draft structures for RTÉ and for the new IBDs TV, Radio and News are:

Director General Corporate Centre• Organisation and

Development• Group Finance• Communications

Integrated Business Divisions

Television• RTÉ1, N2, TG4 output• Production, Acquisitions, HR,IT, Facilities, Finance, Services,Commercial, IPU, Press Officers,Library & Archive

Radio• R1, 2fm, lyric fm, RnaG• Production, HR, IT, Facilities,Finance, Services, Commercial,Press officers, Library & Archive• Regions

News• News, Nuacht, Current Affairs• Production, HR, IT, Facilities,Finance, Services

Performing Groups• NSO, RTÉCO, VanbrughQuartet, Cór na nÓg, NationalChamber Choir, RTÉPhilharmonic Choir• HR, Finance, Services,Commercial

Publishing• RTÉ Guide• RTÉ Online, Aertel• HR, IT, Finance, Services,Commercial

Future structure - Corporate (working draft)

Other Divisions

Networks• Transmission services to RTÉand other broadcasters• Third party servicesNote: RTÉ is proposing a wholly-owned subsidiary company forthis activity

Group SecretaryInternal Audit

Teilifis na Gaeilge


Scheduling andplanningScheduling andplanningCommissioningCommissioning

Acquisitionsand programmesales

Acquisitionsand programmesales

IndependentProduction UnitIndependentProduction Unit

Managing Director TV

Future structure - TV (working draft)

Head ofProduction

Head ofBroadcast

Head ofOperations

TV SportTV Sport Promotions /pressPromotions /press

PresentationPresentation

ProductionresourcesProductionresources

HumanResourcesHumanResources

TechnologyTechnology

ServicesServices

CommercialDirector *

Accountrelationshipmanagement

Accountrelationshipmanagement

DealnegotiationDealnegotiation

Direct salesDirect sales

SalessupportSalessupport

Non advertsalesNon advertsales

* including key account mgmt# functional reporting line to CFO

Library &archiveLibrary &archive

FinanceDirector #

Admin,contracts andrights

Admin,contracts andrights

PurchasingPurchasing

Financialplanning, control,and reporting



Managing Director Radio

Future structure - Radio (working draft)

Airtime SalesTeamAirtime SalesTeam

Sponsorship,Roadcaster,Merchandising

Sponsorship,Roadcaster,Merchandising

Commercial Director *

* including key account mgmt** Deputy to MD# functional reporting line to CFO

Channel Heads

Radio 1**Radio 1**

2fm2fm

lyric fmlyric fm

RnaGRnaG

Press Officers,Websites,Overseasbroadcasting

Press Officers,Websites,Overseasbroadcasting

Head of Operations


Facilities -Technology, IT,Buildings,Services

Facilities -Technology, IT,Buildings,Services

Library andarchiveLibrary andarchive

Head of Regions

Corkproductioncentre

Corkproductioncentre

Regionalstaff andfacilities

Regionalstaff andfacilities

Administration,Contracts andrights

Administration,Contracts andrights

Finance Director #




FinanceDirector #FinanceDirector #

ManagerAdminManagerAdmin

ManagingEditor TVManagingEditor TV

EagarthoirNuacht TG4EagarthoirNuacht TG4

TV EditorialTV Editorial

ProductionResourcesManager

ProductionResourcesManager

FacilitiesFacilities

TechnologyTechnology


AdminAdmin

ServicesServices

Managing Director News

Future structure - News (working draft)

EditorCurrentAffairs TV

EditorCurrentAffairs TV

Press officer

ManagingEditor RadioManagingEditor Radio

RadioEditorial

FOI andcomplaints



# functional reporting line to CFO


The MDs of each of the three main IBDs, in consultation with the change programme team, are developing specific objectives for their areas. A commonapproach is being adopted to include:� identification of focus areas� subdivision of focus areas into specific objectives� development of measurable targets within each objective.

Example Focus area: Efficiency and cost controlObjective: Continuous improvements in costsTarget: Put in place effective tracking for all costs by end Q1


4. Four-year Financial Projections

4.1 Income StatementsThe summary Consolidated Income Statements, Balance Sheets and Cash Flow Statements in respect of the 2003 Budget and 2004, 2005 and 2006Projections are set out below. Detailed budgets and projections are attached at Appendix VIII; these are commercially sensitive and not for publication.


4.2 Balance Sheets


4.3 Summary Cash Flow Projections


4.4 Asset Utilisation Strategy

RTÉ is committed to a cost-effective utilisation of all its assets. With changes in technology and organisational priorities some assets may be considered fordisposal.

The assets with possible disposal potential are addressed under the following headings:� Donnybrook Site� RTÉ Guide� The Transmission Network� Radio Transmitter Sites� A Service

4.4.1 Utilisation of the Donnybrook siteRTÉ occupies c32 acres at its Donnybrook site. The independent consultants, engaged on the strategic plan by the RTÉ Authority, examined, withprofessional property assistance and advice, a range of site utilisation options for the Donnybrook location. They concluded that the greatest merit lay incompressing the site by approximately 10.3 acres, with the aim of reducing the substantial annual running costs while also realising a gain on disposal.However, this option would likely take a number of years to successfully complete and would require, as a pre-condition, that certain additional capitalexpenditures and internal site re-locations take place well in advance.

As an alternative to outright disposal, broad consideration is also being given to RTÉ’s participating and /or sharing, as a protected and limited partner, in anappropriate development on the site.

All approaches will be considered by the Authority; they require considerable investigation before a decision is made.


4.4.2 The RTÉ GuideThe RTÉ Guide has historically been Ireland’s largest selling weekly magazine and had for many years a near monopoly position in relation to publication ofweekly broadcast listings. In recent times the RTÉ Guide’s circulation has fallen progressively with the advent of greater competition. The strategyconsultants determined that the RTÉ Guide was not core to RTÉ’s activities and recommended that it be prepared for a sale to be effected by the end of 2002 /early 2003.

Subsequently, over the course of Summer 2002, the competitive pressures on the RTÉ Guide’s circulation have greatly intensified, thus reducing operatingmargins, and at the same time the general market for corporate disposals has disimproved in line with Stock Market capitalisation reductions, thus reducingsale price multiples and values. The changes resulted in a decision to extend the timeframe for consideration of the sale.

In October 2002 the RTÉ Authority decided upon the implementation of a range of actions aimed at enhancing the Guide’s performance and at enabling aconclusive sell / retain decision to be evaluated and decided upon by Autumn 2003.

4.4.3 The Transmission NetworkIn 2000, in consultation with the Department of Arts, Heritage, Gaeltacht, and The Islands, RTÉ put its transmission network up for sale through a tenderprocess. Subsequently, and as a result of changes in Government policy relating to the development of DTT, this process was modified with the intention thatRTÉ would retain a minority shareholding in the company acquiring its transmission network. The RTÉ Fiscal Budget for 2002 assumed that this partialdisposal would take place in March 2002 and further assumed that a proportion of the cash generated would finance an additional re-structuring programmelaunched in November 2001 and estimated to cost € 21.5 million.

In October 2002, the Department of Communications, Marine and Natural Resources decided to suspend its parallel process for the tender of DTTN multi-plex licences following the withdrawal of the sole applicant and decided to review its strategy for the roll-out of DTTN in Ireland. Given that the Network hadnot been sold as budgeted and following discussions between DCMNR and RTÉ, and taking account of the disimproved investment climate for businessdisposals, the RTÉ Authority decided that it was in RTÉ’s best interests to terminate the proposed sale of the RTÉ Transmission Network. At this time thereare no plans to re-activate a sale process pending the clarification of the Governments intention.

4.4.4 Radio Transmitter SitesRTÉ is currently carrying out a technical and frequency management evaluation of its requirements in relation to three Low-Powered Medium Wave (MW)fill-in transmitter sites. This is aimed at establishing whether or not these sites could be extracted from the medium wave network without unacceptablycompromising the integrity of the service. RTÉ has recently initiated a tender process seeking auctioneering services to assist in the evaluation process.Sites under consideration include:

� Beaumont, Dublin� Ballinure, Cork� Moydrum, Athlone


4.4.5 A ServiceAt the outset of its deliberations, on the formulation of a new strategic plan the RTÉ Authority determined, on the recommendation of the Executive Board,that the strategy should encompass the full range of services on offer – as this was in accordance with the organisation public service remit and obligations.However, it has been suggested that RTÉ consider the potential of disposing of one service, specifically 2fm.

During the early phase of liberalisation of radio markets some years ago, consideration was given by government to a radical change in the focus of 2fm,perhaps to its possible disposal. This arose because of 2fm’s then widely acknowledged success as a profitable generator of commercial revenues. 2fm is aPublic Service Broadcaster providing a wide range of services to a younger age group, and thus the suggestion was ultimately not pursued.

RTÉ remains of the view that 2fm is an integral part of its offering to audiences particularly since this station particularly meets the needs of youngeraudiences in a manner which it is not practical nor possible for other RTÉ services to do. Moreover, it offers, for example, access to the resources of RTÉ'sNews adapted for its particular audience in a manner not otherwise available. As a public broadcaster RTÉ cannot remove the younger audience from itsrange of responsibilities. The Forum on Broadcasting clearly supported this position by stressing that the principle of universality was important for publicservice broadcasting and that RTÉ should continue to operate its existing range of services. From a financial perspective, 2fm is, and is projected to continueto be, a significant net cash generator for RTÉ and thus supporting the organisation’s provision of other services to audiences over and above the revenueraised through licence fees.

In these circumstances RTÉ does not propose to pursue a disposal strategy in relation to 2fm.

minister for communications, marine and natural resources · audience and reflecting the importance...

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