RTE has ‘learned from’ financial controversy, new chairman says

Fixing the financing of RTE was one of the biggest concerns raised by the broadcaster’s new chair when first meeting the media minister.

Terence O’Rourke described the current TV licence collection system as “archaic and out of date”.

Minister for Media Catherine Martin has committed to making a decision on reforming the funding of RTE before the Dail summer recess.

Some options reported to be under consideration are direct exchequer funding or a new broadcasting charge to be collected by Revenue, as opposed to An Post.

The broadcaster was plunged into crisis in June last year after it admitted understating the fees for its star presenter and previous top earner Ryan Tubridy.

A series of probing parliamentary committee hearings also uncovered other concerns about culture, governance and financial management at RTE and there have been several high-profile resignations from the board and executive of the station.

A pre-existing steady decline in licence fee revenue was accelerated by the expanding controversy.

RTE operates on a dual-funding model that sees around 55% of its income brought in through the obligatory licence fee, which costs 160 euro a year for Irish households with a television.

Approximately 85% of revenue from TV licence fees goes to RTE to carry out its public service broadcasting commitments, while it also earns money through commercial operations.

The Cabinet is due to sign off on a decision on reforming the funding model for public service broadcasting in the coming weeks.

On Wednesday, Mr O’Rourke appeared before the Oireachtas Committee on Media which was central to probing governance and culture issues at the broadcaster.

He said the board is seeking an “adequate, independent, predictable and reliable” source of funding.

“A licence fee system which is depending on TV sets is archaic and out of date.”

He added: “There are different models out there. I think the current system is not working properly – a household charge would be another example involving public-sector funding.

“There are different ways of doing it, but probably all of those would be better than the current system.”

Asked about his biggest concerns when taking the job, he said: “One would be that the financing model will be fixed.

“That’s a preview of my initial discussion with the minister, that was very clearly an important thing.”

RTE recorded “fictitious” accounting transactions and operated with a “lack of trust” between its board and senior management, according to reports commissioned by Ms Martin.

The reviews and examinations of practices at RTE found its culture was characterised by a “lack of speaking up and good faith reporting”.

They also found there was a lack of trust between the RTE board and its former executive, as well as an informality within board processes and a “limited appetite to learn”.

Mr O’Rourke took over as head of the board from Siun Ni Raghallaigh after she resigned following a public dispute with the minister.

Ms Ni Raghallaigh said she had been left with no option but to quit after being subjected to an “enforced dismissal” after Ms Martin expressed disappointment in her during a live television interview.

The minister said she had been misled about the chairwoman’s role in approving an exit package for a former chief financial officer at the broadcaster.

Ms Ni Raghallaigh has since criticised the minister for “actively taking a hands-off approach” to the scandal at RTE and accused her of not assisting with falling TV licence revenues.

Mr O’Rourke, a former KPMG managing partner, was appointed in March.

Asked if he had any concern about the circumstances around his predecessor’s departure, he said: “Whatever happened, happened.”

The chairman said “somebody had to do the job” and added: “I wasn’t there so I don’t know what happened.

“One of the things we agreed very early on with the minister was a protocol of communication.

“So we now have an agreed protocol of things that that myself and the minister keep in contact about so it’s very clear.”

Mr O’Rourke also told the committee that RTE has “learned from” controversies around financial mismanagement at the broadcaster.

He also said that the board has “profound disappointment and regret” about events and behaviours which triggered the investigative reports.

Mr O’Rourke said: “The organisation has learned from what happened. The necessary controls and procedures are being put in place to make sure that those kinds of events cannot happen again.”

However, he also warned that RTE will be faced with many challenges in a “very disruptive decade ahead”.

Mr O’Rourke said the broadcaster is working on implementing recommendations from the Government reports, which the minister said is a prerequisite for the release of emergency funding.

RTE’s director general Kevin Bakhurst, who assumed the role in the early weeks of the crisis, has also announced a strategic plan for reforming the institution by 2028.

It includes cutting headcount by 400 – a reduction of up to 20% – and a significant increase in investment in the independent production sector.