RTE is facing a a loss of £2 million next year and further deficits in the following years. The deficit for 1998 will be the first since the mid-1980s. The station is expecting even greater losses over the next few years, with a "significant deficit" in 1999, according to a senior source at the station.
The crisis has been predicted for some time, and the chairman of the RTE Authority, Dr Farrel Corcoran, has continually warned that the surpluses reported annually are hiding a real problem. RTE has been making losses on the core broadcasting business for several years.
The pressures are from a number of sources, according to senior RTE management. They include the quota of programmes by independent programme-makers, which will account for 20 per cent of programme budgets by 1999; an hour a day of programmes for TnaG; and the arrival of TV3 next year.
However, a Government decision not to implement the indexa tion of the licence fee introduced by the last government will mean E will lose a potential £10 million loss over the next five years. The indexlinking of the licence fee was introduced by the former minister responsible for broadcasting, Mr Michael D. Higgins. He increased the licence fee and index-linked it for the next five years.
The first increase was to be a £1.20 rise last September. The Government decided not to implement the indexation, leaving the fee at £70 for a colour licence.
RTE also faces pressure on advertising income from TV3, due on air next September and from a revamped Radio Ireland, or Today FM as it will be called, when it is relaunched next month.
TV3 will increase the cost of acquired programmes, as RTE will find itself in competition with a domestic broadcaster for the first time. This could mean a big increase in the price of buying programmes, especially the rights to broadcast sports.
Meanwhile, the RTE Authority is awaiting a response to its proposals for digital television from the Government. RTE is recommending a policy favouring digital terrestrial television and that the £30-£35 million needed should be mainly funded by a new company, which would include RTE and strategic partners from the private and public sectors.
RTE also recommended that legislation be introduced by the end of next year to allow digital television to go on air by the end of 1999. UTV plans an all-Ireland digital channel by the end of next year, under the UK rules. BSkyB has plans for 200 digital television services which would be available here for those with the necessary equipment.
RTE fears that if the Government delays in making decisions, interests outside the State, such as satellite operators, might have an influence over technological developments here.
If RTE's proposals were adopted, it would mean about 30 channels with the facility for local optout services. It could also allow RTE to develop a news channel and other services. The cost of changing RTE's production equipment will be in the region of £28 million, which it will have to meet itself.