€60m feels too low, RTÉ will probably be back for a second bite
ON Thursday’s Drivetime With Mary Wilson, Philip Boucher Hayes went one by one through eight points in director general Dee Forbes’ letter to staff. Here we reproduce the RTÉ journalist’s analysis of the key operational elements of Ms Forbes’s plan to save RTÉ.
Extract from Dee Forbes’ message to all staff:
RTÉ will Modify
●The RTÉ Guide is for sale. (A)
● RTÉ will close its current studio in Limerick in 2020; production of RTÉ Lyric fm will move to Cork and Dublin. (B)
● RTÉ will continue to provide a mid-west news service in Limerick.
● We will close the Digital Audio Broadcast network, as well as RTÉ’s digital radio stations (RTÉ 2XM, RTÉ Pulse, RTÉ Gold, RTÉ jr Radio & RTÉ Radio 1 Extra). (C)
● RTÉ Aertel will cease. (D)
● The RTÉ National Symphony Orchestra will transfer to the National Concert Hall.
●We will develop a new integrated media centre in Donnybrook, investing in new digital infrastructure.
RTÉ will Reduce
● We need to reduce projected costs by €60m over three years (2020-2023), in addition to the reduction of
23% delivered between 2008 and 2018. (E)
● We need to reduce the fees paid to our top contracted on-air presenters by 15%, in addition to the 30+% cuts as agreed in previous years. (F)
● We need to reduce staff costs – we will consult with staff and unions on a number of initiatives, to include a pay freeze, tiered pay reductions, review of benefits, work practice reforms. (G)
● The Executive Board will take a 10% reduction in pay; the Board of RTÉ will waive its fees.
● We need to achieve a staff headcount reduction of circa 200 in 2020 (H)
The following is the response from Philip Boucher Hayes on Thursday’s Drivetime:
A) Selling the RTÉ Guide
‘That’s a move that has raised quite a few eyebrows, the RTÉ Guide is actually an area of RTÉ that is profitable and selling the title and its staff to another publisher might be expected to raise in the region of €4m to €5m as a once-off payment. But then you’ve lost the roughly half-amillion euro per annum that it brings in on an ongoing basis and the promotional value that goes with it. There’s also quite a degree of anxiety among the staff at the RTÉ Guide that they are being sold with the title and don’t have the option to stay within the organisation.’
B) Lyric FM
‘Not the station, as had been suggested about two months ago, just the studio is to close. Production in Limerick will move to Cork and Dublin. It’s far from clear how much of a saving this is going to make because RTÉ rents that building in Cornmarket in Limerick and could be doing so for as little as €100,000 a year so that is the only upfront saving there, remember they have to get to a figure of €20m reductions every year. Perhaps there will be further savings as Lyric staff who are resident in Limerick can’t afford to make the move to Dublin or Cork and there might be redundancies there.’
C) Digital Audio Broadcasting
‘Which was something of a lost cause for a number of years now because the industry has moved elsewhere in digital broadcasting, again because RTÉ hadn’t been spending an awful lot of money on DAB recently it’s far from clear how much they are actually going to save on that.’
D) Aertel
‘Frankly people, many of them in RTÉ, were surprised that the teletext service still actually existed and the tiny level of expenditure that is involved here means that it is probably, according to some insiders I’ve been talking to, isn’t really worth putting on any list of savings.’
E) €60m
Sixty million euro ‘is the figure that RTÉ says it needs to save in the next three years, but I asked RTÉ can they show us the costings please on the savings, some of which I have just gone through there, how much will each of those measures save. And they say that they’re not going to share those figures. I asked a number of questions about them. I said if you won’t show them to us, can you confirm today that all of the announcements today actually add up to
€60m and I was assured that they did. But as you’ve heard here, that’s very much an open question. I asked how this figure of €60m was arrived at in the first place and were they confident that that was going to be equal to the task ahead? I didn’t get an answer on that one. I asked was there a consultant’s report that had been attached to this announcement that was supposed to have underpinned it, because there was rumours there were. I asked would it be circulated? I didn’t get an answer on that. And crucially I asked had these cost savings been sent to the Minister for Communications, I mean do they have his imprimatur at this stage and, pointedly, I wasn’t told that they had. What I was told was that Government had received a detailed briefing on RTÉ’s finances. And talking throughout the day to former members of the RTÉ Executive and the Authority they’re not confident that it’s going to work. They said that this figure feels too low, they feel that RTÉ is probably going to end up coming back for a second bite in a year or two’s time but they felt that they just couldn’t ask for four or five hundred redundancies. And another observation made by several of those former executives was that this plan feels like a tactical response rather than a strategic one.’
F) Cutting presenters’ salaries
‘This is one of the few areas where we can work out what it will actually be worth in savings. And for the amount of column inches and political attention and the enormous problems of perceptions the presenters salaries have created for RTÉ, there’s a bit of a mismatch here because the savings, if you take – as RTÉ is suggesting now – 15% off the top 10 presenters’ salaries, you will save €450,000 a year. Remember the goal is €20m so that issue that has dominated the headlines for so long will only save €450,000.
G) Pay freeze
‘For the other staff in the organisation, most have had their pay frozen for the last 10 or more years anyway, so you would only be freezing pay for the other 50% of pay for the younger, less well-off staff who haven’t reached the top of their respective scales. So, again, it’s very, very far from clear how much money you’re talking about being saved.’
H) 200 voluntary redundancies
‘It would reduce the payroll in here very significantly, but as one former member of the executive that I was talking to today said, redundancy packages in here in the past have proven to be a doubleedged sword. Yes, you make savings on payrolls but the packages cost an absolute fortune and they tend to be taken up by the wrong people, people who are in their late 50s, early 60s who are walking towards the exit door anyway.