Burke twice had transmission fee for Century cut

When Mr Ray Burke resumes his evidence at the Flood tribunal today, much attention will focus on his relationship with the failed…

When Mr Ray Burke resumes his evidence at the Flood tribunal today, much attention will focus on his relationship with the failed radio station, Century. As a minister, he made 12 crucial interventions, almost all of them to the benefit of the station. So what were they?

On October 6th, 1987, the government took the decision to set up new community and local radio stations. On October 28th, he told his officials that it had been decided to award a national licence, too.

Mr Burke effectively chose the solicitor and banker appointed to the Independent Radio and Television Commission (IRTC) when it was set up in October 1988. The solicitor chosen was a son of Mr Charles Haughey's former election agent; the banker was also a constituent.

After the State broadcaster RTE set a charge of £1.14 million for carrying the signal of its new commercial rival, the IRTC complained to the minister that this was too high. His officials later reached agreement with RTE on a reduced fee of £692,000 the day before the oral hearing that led to the licence being awarded to Century a week later.

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Century continued to complain to Mr Burke. The fee came down to £614,000, approved by Mr Burke.

However, a Century board meeting in February 1989 was informed that Mr Burke would issue a directive further reducing the transmission charges to £375,000.

On March 14th, 1989, Mr Burke issued the directive forcing RTE to drop its transmission fee even further. According to the tribunal, the sum ultimately charged to Century was less than £200,000. The tribunal has calculated that Mr Burke's latter two interventions saved Century £820,000.

Just before Century was due to go on the air in September 1989, Mr Burke contacted the IRTC to urge that Century be allowed to "grow into" its requirement to provide a specified minimum of (costly) news and Irish-language programmes.

In October 1989 Mr Burke ordered his Department to allocate to Century a medium-wave frequency sought by the station despite official advice recommending a different one.

By the end of 1989 Century was in dire financial straits. In December Mr Burke took the extraordinary step of meeting its bankers, who were threatening to shut the station down. At one stage during the meeting, the Century promoters withdrew and the minister (without officials present) gave the bankers private guarantees that he intended to eliminate RTE's "excesses" by capping its revenue, according to bank minutes.

Early in 1990 the Minister amended the Broadcasting Bill to provide for a cap on RTE's advertising revenue. This became law in July. The measure effectively diverted revenue from RTE to the commercial sector, including Century. It was repealed by Mr Burke's party colleague, Mr Seamus Brennan, in October 1991. RTE claims the cap cost it £20 million.

According to a note kept by Century's bankers, Mr Burke was prepared to let James Stafford and Oliver Barry reduce their stake in the company they founded to below 51 per cent. Decisions on ownership are, however, made by the IRTC, not the minister.

With Century complaining that the cap had been watered down and delayed, Mr Burke proposed a further measure in May 1990. Part of RTE's licence fee would be diverted to the IRTC for the benefit of the commercial sector. The proposal caused political uproar, and the provisions were removed from the Broadcasting Bill before it was enacted.

By April 1990 Century had identified 2FM, RTE radio's pop music channel, as its main competitor, and proposed to Mr Burke a merger or takeover of it. Mr Burke suggested that 2FM change and broadcast farming, educational and foreign-language programmes. Following controversy, the idea was dropped.

Today we may begin to hear Mr Burke's explanation as to why he did these things.