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feb

Since reducing the Spanish deficit is on the agenda of many international organizations, it has been seen that one of the main obstacles is the high regional expenditure. Part of their balance sheets are elastic to electoral outcomes, but politicians across the political spectrum point out the desirability of reducing the cost of televisions.

Graph 1. Gross annual cost per household and Autonomous Community

Source: Civismo

The regional network of public TV networks costs taxpayers an average of 110 euros per household, according to a recent Deloitte report. In 2009, this sector had losses of over 1,212 million euros. A cost which rises in the case of regions that maintain a cultural policy to favor a language other than Spanish —some of the many regional languages that Spain holds—, nearly reaching 50 percent. In the case of the public TV of the Balearic Islands (TVB), spending skyrockets up to 294 euros per household because it is the newest of all, while in the Community of Madrid the cost decreases due to its large size. Castilla y León, Cantabria, Navarra and La Rioja do not have public but private televisions and each of these regions allocates a percentage of their budgets to subsidize the broadcast of programs with interest for each community.

Graph 2. Expected income and expenses for 2011 (millions of euros). Data for Catalonia for 2010

Source: Civismo

Graph 3. Cost per household of the Autonomous Television (euros)

One of the problems of financing public television is its opacity, since besides the allocation of resources that has to be initially made there are other complementary payments that regional parliaments can agree on during the year. The subsidies also do not mean the end of the story, as these public entities can also finish the year in red numbers, which means that the public treasury will have to assume that extra cost in the coming years, making any comparison all the more complicated. For example, the Catalan Corporation of Mitjans Audiovisuals, which controls TV3, closed 2010 with estimated losses of around 56 million euros, 11.6 percent of its budget.

The most burdensome issue is the one that shows to what extent public TVs depend on politicians: for every euro they were allocated in 2009, only 14 cents came from their business activity, largely the sale of advertising spaces. This ratio worsens year after year, as operating income fell by 24 percent compared to 2008 and is expected to continue doing so in the coming years, with an increasingly atomised market. This causes the expense per viewer to have increasingly grown in recent years. For example, the cost of keeping the active ETB broadcast for a year amounts to 3,589 euros per viewer, something that could not be assumed by any television that is not subsidised. This high figure reflects the costs of the entire production, the only corporation that has a surplus.

Delays in payments to local producers are also not reflected in the income statement, whose programs make up the bulk of their content, and which can be accumulated over several years. This is due to the fact that the same legislation that ‘protects’ local production, forcing the hiring of producers in that autonomous community, prevents these producers from accessing the market of the rest of the televisions, so they cannot oppose the corporation in their region suing them for not paying.

Graph 4. Losses of autonomous public televisions without accounting for subsidies (millions of euros)

Source: Civismo

Graph 5. Operational expenses of regional televisions (millions of euros)

Source: Civismo

Graph 6. Number of employees in regional TVs

Source: Civismo

Graph 7. Labour costs (millions of euros)

Source: Civismo

In 2010, most of regional parliaments have decided to cut their TV budget. However, that does not guarantee that debt growth will slow down or that the cut will be maintained if public revenues increase again. The worst symptom is noted when reviewing the budget by items: they are all reduced except for staff costs, which accumulate an increase of 11 percent in two years. This expense is harder to be eliminated in the public sector when there are more financing problems and, for the most part, public employees earn higher salaries than in the private market. Galician television workers, for example, have an average salary cost of 50,000 euros a year.

In addition, much of the increase in spending is not due to the fact that there are more workers, but rather than there are more executives arbitrarily appointed by the various regional governments, and who threaten to remain entrenched for years, surviving the changes of Government. To give a couple of examples, only 13 TV3 —Catalan network— directors whose function is to supervise the contents, are collectively paid 106,000 euros per month, while managers can reach a salary of 20,000 euros per month. Nobody escapes that many politicians use public television as a means of propaganda, either directly or indirectly: censorship or contracting broadcasts that are hardly profitable and then charged through taxes. Many of the advocates of a deficit model refer to utility as a public service, but a look at some programs shows that profitability is not as social as it is political.


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