RTE - the end is nigh - high wages come home to roost

RTE on the brink of going bankrupt

Broadcaster is losing €1m a week

Sunday May 31 2009

RTE is losing €1m a week and will not be able to pay staff by October unless a programme of salary cuts and redundancies is implemented in the coming weeks.
The crisis comes amid growing anger among staff at the level of pay and bonuses paid to the director-general and senior management over the past number of years.

The bankruptcy warning has come from management at the State broadcaster and the director-general Cathal Goan has cautioned that up to 300 jobs are now under threat.

The cash-strapped station is facing a "worst case scenario" of a budget loss of up to €100m -- far more than the current estimate of €68m.

The news comes as staff at the national broadcaster continue to ballot this week on whether or not to accept proposed pay cuts of up to 12.5 per cent. A well-placed source at RTE has described the station as "sitting on a knife-edge", as the proposal is about to be put to a staff vote.

"This is make or break for RTE. There will be no other offers put on the table. Staff have been told that management is drawing up a list of people who they are going to make redundant, if necessary, to save money. The entire organisation is sitting on a knife-edge now."

Speaking about the prospect that RTE could run out of money by October because of high costs and a collapse in advertising revenue, a spokesperson for the station said: "We need to claw back €68m. It poses a significant cash crisis for RTE. Otherwise the station will be in serious financial difficulty."

Asked about the warning that several hundred jobs are now under serious threat at the station, the spokesperson continued: "There has been an ongoing negotiation process over the last month and if that fails Mr Goan has made it clear to staff that we will have to look at alternatives. And there aren't that many alternatives available."

Meanwhile, tension within the organisation is said to have reached fever pitch. Last week a number of staff placed 'vote no' posters around the Donnybrook complex only to have them ripped down shortly afterwards.

There is also growing resentment among workers over the level of executive pay.

In 2007 Cathal Goan earned €441,000, more than US President Barack Obama. In the same year Mr Goan's basic salary was €283,000, his performance-related bonus was €108,000, his pension supplement was €23,000 and his other benefits amounted to €27,000. His salary was up from €360,000 on the previous year.

In the same year, managing directors in RTE earned between €150,000 and €200,000. They also received a bonus of €20,000, a 'performance-related uplift' of €5,200 and another €30,000 for simply being a member of the executive board.

The figures are the last official earnings to have been released by the state broadcaster. Management have said they have since taken pay cuts to their bonuses but the publication of the 2008 Annual Report, currently due out, has been delayed.

All members on the executive board also receive €12,000 a year for driving their cars to work. The 'car allowance' is given to managers who simply park in the station car park at Donnybrook.

RTE are looking for a five per cent reduction on the first €50,000 in earnings, seven and a half per cent on the next €50,000, 10 per cent on those earning between €100,000 and €150,000 and 12.5 per cent between €150,000 and €250,000.

- NIAMH HORAN Entertainment News Reporter EXCLUSIVE

Sunday Independent