Mr. Noel Curran:

I thank the Chairman and members of the joint committee for inviting us to this meeting. As the Chairman noted, I am joined by a number of colleagues and I hope that, between us, we will be able to answer any questions members may have.

As part of the section 124(8) five year review of public service broadcasting, RTE submitted a detailed five year strategy to the Broadcasting Authority of Ireland, BAI, early last year. Last June, having concluded the review process, which included a detailed analysis of RTE's plans by consultants, Crowe Horwath, the BAI recommended to the Minister that the level of public funding to RTE should be increased, with certain conditions. In July, the Government, in its response, affirmed its ongoing support for the concept, purpose and practice of public service broadcasting in Ireland. It also welcomed the BAI review and considered the report and recommendations submitted as comprising an important step in ensuring that public service broadcasting will be sufficiently well funded and these funds will be used in a transparent manner.

The Minister recommended a number of additional initiatives and reviews related to public service broadcasting, specifically RTE. Following this lengthy process, RTE published its five year strategy last September and sent a summary of the document to a range of stakeholders, including every Member of the Oireachtas. The five year strategy is an important document for RTE. It was developed following a review of everything we do and how we do it. It was informed by analysis of the market, our audiences and responsibilities and the impacts of changing technology. The brief was simple - to reshape RTE for the future and make it fit for the times we live in and the diverse audiences we serve.

We developed our plans mindful of the society and economy within which RTE sits and the changed circumstances of our audiences and licence fee payers. In that context, we were clear that the first stage of our strategy must be to return RTE to a sound financial footing by ensuring our operations are run as efficiently as possible. This objective has been achieved. We will soon publish our annual report for 2013 in which we will report a small financial surplus for the first time since 2008. I acknowledge and thank RTE staff and members of the independent production sector who worked closely with us to achieve this turnaround.

As with many organisations, Ireland's economic collapse had a deep impact on RTE's finances. The organisation is dual funded and its commercial revenues, primarily advertising, declined by €95 million between 2008 and 2013. In addition to this 40% reduction in commercial revenues, public funding levels reduced by €19 million in the same period. Combined, this revenue loss amounts to €113 million over the past five years. The most recent national budget for 2014 resulted in a further €5 million reduction in public funding. In response and to return to a financial break-even point, RTE has reduced its operating cost base by 30% since 2008, while maintaining - this is a critical point - all of its public services. The scale of RTE's operating cost reductions to date is unique across the semi-State sector. The organisation also delivered digital terrestrial television, DTT, allowing the State access to an €875 million dividend from the sale of spectrum and enabling the electrical trade to benefit by approximately €150 million in retail sales.

The impact of restructuring on RTE has been very significant. Between 2008 and the end of 2013, almost 500 staff departed. This reduction of 21% in our workforce was more than double that which occurred across the public service and semi-State sector over the same period. In 2009, RTE was the first public body to agree and implement reductions in basic salary for all staff. Pay reductions ranged from 2.35% to 12.5%. No bonuses have been paid since 2009 and average basic pay for RTE staff in December 2013 was €56,300. Between departures and pay cuts, total staff costs have reduced by 25% in RTE since 2008. Between 2008 and 2012, RTE's total staff cost reductions were more than double the average achieved across the public and semi-State sector. An independent review of managers' salaries conducted by Hay shows that salaries for RTE managerial and professional staff are at the mid-point of a representative large industry sample, including semi-State organisations. When short-term incentive payments are included, RTE managerial and professional salaries are below market average, as variable pay for these grades has ceased for the last five years. The survey was completed in November 2013. We have submitted the report in full to the committee along with more detailed financial and staffing information.

RTE's annual report publishes the director general's remuneration package annually. The annual report is prepared in accordance with IFRS accounting standards and makes full disclosure under IFRS. RTE has implemented the Government pay cap for semi-State chief executives and is also adhering to the other recommendations for semi-State remuneration made by the Department of Public Expenditure and Reform in 2011. We have achieved substantial reductions in presenters' contracts as they have been renewed over the past number of years. Reductions range from 21% to 68%. The average reduction across the top ten is well in excess of the 30% reduction we committed to achieving. Like the general public, RTE values enormously the work all our on-air talent does. As the committee will no doubt be aware, we lost one of our most experienced presenters to a commercial radio station during contract negotiations last summer. While we have tried to protect services and programming as much as possible, investment in indigenous television programme production at RTE and in the independent production sector - a vitally important part of the Irish creative digital economy - has been reduced by almost €75 million during the period 2008 to 2012.

While it is important for the committee to be aware of the financial context in which RTE developed its five-year plans, there are other important contexts too. The committee will agree that the public space occupied by the media is crucial. Within a highly competitive international media environment, we have made the argument in our five-year strategy that a small country requires a strong national public service broadcaster more than ever. RTE has obligations and responsibilities which commercial companies do not have. It is established as a dual-funded, not-for-profit, statutory body. Its purpose and activities are guaranteed by legislation, it is independently regulated and it is not accountable to wealthy business people, offshore private equity investors or the Government, but rather to the public which funds it. RTE's core public purpose has never been more relevant or important than it is today. RTE retains a unique connection with Irish people. In our own regular tracking analysis, with which I am not sure the committee is familiar, we see the evidence for this continually. In 2013, RTE reached 96% of Irish adults on a weekly basis across the full range of its services. Public trust in RTE is now at 72% while 68% of Irish people believe RTE enriches their lives and 78% say RTE is an Irish brand of which they are proud. Some 71% of people believe that what we do is of high quality. No other media organisation in Ireland comes close to that level of engagement and reach. Despite all of the cutbacks we have had to make, these measures have improved over the past year.

None of this means that RTE does not at times upset certain sections of society or people who hold particular views. It does not mean RTE does not broadcast programmes that some people dislike or that it makes no mistakes. It means that sustaining, reinvigorating and constantly improving RTE is important and matters to most Irish people. It matters particularly now that we find ourselves in a digital world where information is delivered on increasingly diverse platforms by increasingly diverse sources. It matters when original reporting everywhere is declining and the ownership of Irish commercial media has consolidated considerably. It matters when the forces of globalisation within media are diluting national and local culture like never before and when some of the largest multinational media organisations in the world are taking crucial revenue out of the Irish creative and media sector.

In the television market alone in the last 18 months, the number of UK television channels selling Irish advertising has grown by 33% to a total of 36 channels. Sky added Irish advertising to two new channels in January. UK public service broadcaster Channel 4 is now selling Irish advertising. UTV will launch a new Irish television channel here next January. In reality most of these channels treat Ireland as a lucrative profit centre and invest little or nothing in Irish-focused content for Irish audiences. Their combined effect is to suck revenue out of the economy away from investment in Irish-focused programming and into the pockets of some of the most well-resourced global media companies in the world such as BSkyB. In contrast, RTE's contribution to national output in 2013 was of the order of €310 million while sustaining 3,000 full-time equivalent jobs in the Irish creative economy. For every €1 in licence fee income, RTE contributed €1.70 to the Irish economy, including taxes. Of RTE's total operating spending, 86% was among Irish-based personnel and suppliers.

We have argued in our five-year strategy that Ireland, as a small country, needs a media organisation that can compete with international media and guarantee a distinctive Irish voice and perspective on the world. This, after all, was one of the primary reasons RTE was originally established. Now, with satellite and internet technology, the threat is far greater and multifaceted. Our five-year strategy sets out how we plan to meet the challenges of increasing competition and the changing needs of audiences in the digital age. The central theme of RTE's strategy is to move from being a public service broadcaster to a public service media organisation which delivers distinctive, diverse and high-quality programming and content to audiences across devices. One of the key conclusions of the Crowe Horwath report prepared for the BAI was that while RTE receives the least public funding of any of the five comparable dual-funded public service broadcasters studied, its share of the advertising market was far exceeded by other public service broadcasters.

As with all public expenditure today, the public must be assured that it is being used effectively and efficiently. Few, if any, public bodies in Ireland have undergone the level of independent scrutiny and review on its efficiency and performance which RTE has undergone over the past 18 months. A total of three independent external reviews - by Crowe Horwath, Indecon and, most recently, New Era - were commissioned by the BAI or the Department into all that RTE does and how it does it. RTE has also commissioned its own internal reviews and analyses.

Across these reports and reviews, all our operating costs have been benchmarked against the public service, semi-State sector, private sector and other public service and commercial media organisations around the world.
While accepting that organisations can always be more efficient, I genuinely believe a reasonable analysis of all of this material, much of it published, gives a clear sense of what has been achieved by RTE. RTE is now at a crossroads. Without action, the range of factors I have outlined can lead only to a decline in both RTE's relevance, audiences and commercial viability. A diminished RTE serves no public or commercial interest. Those that are likely to gain most from a decline are not other Irish-owned media organisations, but large international media providers. Much is at risk beyond RTE's own future because a viable independent production sector, investigative journalism, significant Irish drama, national regional coverage and international news coverage all add significantly to Irish life. These are not services or activities sustainable on any scale without a strong RTE.
I have said RTE should have responsibilities and obligations in return for public funding, particularly increased public funding if there is to be a new broadcasting charge. We believe that firmly and totally accept it. What we want are circumstances in which we can increase our investment in programmes produced by the independent production sector and within RTE. We want to invest much more in our news operations and news channel by adding more live bulletins, regional news and international news, and by re-opening our London office and having more feature programming. We want to invest more in ground-breaking investigative reporting, science programmes and high-quality Irish drama, and we seek to develop Ireland as a key international hub for such drama production. We want to be a key supporter and developer of increased investment in Irish comedy and to increase our commitment to the Irish arts and sector. We want to use digital technology to develop new ways to showcase the best of Irish talent. Consequent to The Secret Life of the Shannon series last year, we want to make more natural history and wildlife programming showcasing Ireland's extraordinary natural beauty. We need to invest in crucial technology, such as the future development of the free-to-air Saorview platform and other digital infrastructure. These are just some the things we want to do and in respect of which we want to make commitments and be subject to obligations.
The Government indicates that it plans to introduce the public service broadcasting charge in 2015. By decoupling the charge from TV ownership, the new system promises to be fairer, more efficient and reflective of current media usage. As is clear from the documents published in August last year, the change has the potential to yield more public funding for public service broadcasting than the current TV licence system while, importantly, not increasing the burden on very stretched Irish households. We look forward to developments in its implementation over the coming months.
In the meantime, we will continue to invest in Irish stories and to facilitate debate in Ireland. One of the topics that Deputies wish to discuss today is a recent defamation settlement made by RTE. We are happy to answer questions on that. However, may I say on a general level that no individual settlement or decision will weaken RTE's resolve to present a wide range of views on current affairs topics and allow forthright debate. We have strict and restrictive legal responsibilities under Irish defamation law. We operate within these legal boundaries. The Defamation Act 2009 is due to be reviewed this year and we would like to see some changes. However, we also fully understand that for many people, particularly those who have suffered within this society because of their sexual orientation, homophobia and discrimination are very real. We need to remember that one of the positive outcomes of the recent controversy was a substantial increase in the level of debate around homophobia, equality and same-sex marriage, much of it conducted on RTE programmes. That will continue.
I hope members have had a chance to read the letter and the comprehensive guidance note on protection of reputation already submitted to the committee by our director of legal affairs, Mr. Eamonn Kennedy, who has joined us today. We have attached an additional note on opinion that I hope will be useful in the debate on defamation. I thank the committee. We will do our best to answer any questions members have.