The new Film Makers Ireland Newsletter is now out, and available on their website. Here is the Broadcasting Sub-Committee Update:
The correspondence between Joe Mulholland, Managing Director of Television, RTÉ, and James Hickey, Chair, FMI Broadcasting Sub-committee continues on a regular basis. We have published excerpts from the last letter sent from James Hickey to Joe Mulholland, dated 16th April 1998, detailing many issues of significance which require further discussion and resolvance.
Thank you for your letter of 25 March 1998 in connection with the above. As you know your letter arrived on the day of an Irish Times report which referred to the increasing level of the obligation of RTÉ to the Independent Television Production Sector and at the same time to a crisis in RTÉ which is likely to lead to job losses. At the FMI Members Open Day the following day you said that you yourself had not used the word 'crisis' in connection with the interview you had done for the newspaper report. It does not appear however that any great efforts were made on the part of RTÉ to deny the linkage between the increased level of commitment of RTÉ to the Independent Television Production Sector on the one hand and the job losses which are likely to arise in the context of the very belated efforts of RTÉ to address its overstaffing problems which have been common knowledge for nigh on ten years past.
It is extraordinary from our point of view that the increase of IR£2.5 million in RTÉ's level of commitment to the Independent Television Production Sector in 1999 over the figure of IR£12.5 million which RTÉ was aware of five years ago on foot of the Broadcasting Authority Amendment Act, 1993 should give rise to a jobs crisis in RTÉ. You yourself admitted at the FMI Members Open Day that RTÉ had ignored and failed to prepare for its obligations under the 1993 Act and was now only coming, belatedly, to a recognition of those obligations. IR£2.5 million represents only 2.5% of what you yourself have declared as RTÉ's television expenditure and it beggars belief that such a small shift in expenditure would cause the crisis which is now apparently occurring. It is grossly unfair and inequitable that the Independent Television Production Sector would suffer in the media as the apparent cause of the job losses crisis which in our view wholly arises as a result of RTÉ's failure to recognise and update its employment arrangements over ten years past both in terms of changing work practices within television and the development of new technologies.
The position from our members point of view is made all the more difficult for the Independent Television Production Sector by RTÉ itself when interviews take place such as that which occurred on the Joe Duffy Saturday morning radio programme on Radio1 on the 28 March 1998. You yourself were interviewed with Michael D Higgins TD but no one from FMI was invited to participate in the programme. Again the jobs crisis within RTÉ was clearly linked with the increased level of commitment to the Independent Television Production Sector and you made no effort to disabuse either Joe Duffy or Michael D Higgins TD of this. Furthermore, Joe Duffy's attitude to what RTÉ's obligation was to the Independent Television Production Sector was dismissive and insulting and there was no balance or fairness in terms of the views of independent television producers being addressed and recognised. Also, the international perspective whereby, for example in the United Kingdom, the level of commitment of broadcasters to the Independent Television Productions Sector has been for upwards of 5 years past not less than 25% of television expenditure and similar higher levels of commitment exists throughout Europe, was not fully addressed. I am copying this letter to the secretary of the Authority as part of a formal complaint to the Authority for the purposes of the Broadcasting Complaints Commission Arrangements under Section 18A(12) of the Broadcasting Authority Act 1960 as amended by the Broadcasting Authority Amendment Act 1976. FMI must now insist on a written undertaking from RTÉ that any further linkage between RTÉ's very belated attempts to deal with its own internal overstaffing on the one hand and the increased level of commitment to the Independent Television Production Sector on the other hand will be specifically denied. It is very difficult for FMI to be able to counter the insidious publicity which is going on throughout the media in the absence of this. RTÉ must take on board its own responsibility for dealing with its overstaffing problems without reference to what are the extremely modest level of increases being accorded to the Independent Television Production Sector in the context of the overall television programme expenditure of RTÉ (21/2 % in 1999).
In relation to your letter of 25 March 1998 and the numbered items in it I will reply as follows:-
1. Ascertainment and Certification of Television Programme Expenditure: You do not make clear that the audit certificate will be issued by Arthur Anderson Chartered Accountants. We see no reason why RTÉ should not specifically commit to the issue of an audit certificate by its auditors no later than 31 March immediately after the 31 December year end. As you know the requirements in the legislation is that the amount to be spent is 20% of television programme expenditure in the preceding financial year. If therefore, the auditors certificate is issued by 31 March it would be possible for RTÉ to make any necessary adjustment well in advance of the end of the relevant year. For example it should be possible for your auditors to issue an audit certificate as to 'television programme expenditure' for the year end of 31 December 1998 no later than the 31 March 1999 and that if the figure so certified is in excess of the IR£96million you have already given us then the appropriate adjustment can be made. Please confirm therefore your undertaking to produce an auditors certificate no later than 3 calender months after the relevant year end so that any adjustment which needs to be made can be made in good time before the relevant level of commitment to the Independent Television Production Sector needs to be spent.
We ourselves see no reason why the auditors certificate should not be included in the financial statements of RTÉ for the relevant year. You give no reason or explanation for this apart from saying that it would not be possible which in our view is no explanation at all. We will be drawing to the attention of the Minister for Arts, Heritage, Gaeltacht and the Islands RTÉ's resistance and unwillingness to operate on a fully transparent basis in relation to its statutory obligations under the 1993 Act.
2. Deductions;
(i) Sports Licences: It is impossible to understand why you say that RTÉ could not contemplate a position whereby negotiations on sports rights would be ceded to a third party. You have already advertised horse racing programming as being programming which will now be offered to the Independent Television Production Sector and which will presumably involve the relevant independent producers negotiating with the relevant race course owners. Presumably the costs of this as with the costs of any other location fees or rights acquisition fees will be accepted as part of the independent producers budget. If RTÉ has long term blanket agreements with sporting organisations there is no reason why the payments under these could be apportioned if part of the relevant sports programming covered by the agreement was to be allocated to Independent Television Production. It also makes sense to say that the license payments permit RTÉ to broadcast television coverage of sports events and are not therefore a cost of production. These would be legitimate costs of production if paid for by independent producers.
(ii) Music Licences: We appreciate that a substantial part of the payments made by RTÉ to IMRO, PPI and MCPS may be attributable to radio rather than television. It is a matter for RTÉ to make the relevant apportionment between radio and television to the satisfaction of its auditors. Also in relation to that part of MCPS's blanket license which covers independent producers this should be apportioned as well. To the extent that any of these music licences cover television rather than radio programmes they are a rights clearance cost which need to be paid as part of the process whereby a programme is got ready for the broadcast in the same way that the use of any other copyright material in a programme must be paid for before the programme is ready for broadcast. Accordingly the figures should be included as part of television programme expenditure for the purposes of the 1993 Act.
(iii) Exhibition Licences: Thank you for confirming that you realise that the 1993 Act refers to the cost of acquiring programmes by RTÉ as included in 'television programme expenditure'.The fact that these payments are not a cost of production per se and that there is no production activity associated with them is not relevant to the fact that they were included as part of the definition of 'television programme expenditure' and must be included in the calculation. It would be grossly unfair if FMI were put to the cost of enforcing independent producers rights to have acquisitions costs included as part of 'television programme expenditure' for the purposes of the 1993 Act when it is clear that you accept that the legislation on the face of it does include this in 'television programme expenditure'.
(iv) Teilifís na Gaeilge: FMI accepts that RTÉ's obligations in respect of expenditure on programming to be supplied by Teilifís na Gaeilge was not something which was in the contemplation of the legislation when the 1993 Act was passed. It is a matter for the Minister if she wishes to make an order under Section 4 sub-section 7 of the 1993 Act to recognise this. FMI's view would however be that until RTÉ agrees to accept fully its obligations under the other headings referred to above it would be unreasonable to expect FMI to accept the alteration of the legislation by ministerial order. FMI was very surprised that you would suggest that programmes independently commissioned by TnaG could be considered to constitute RTÉ expenditure on independent television production. As you know for such expenditure to qualify under the 1993 Act Teilifís na Gaeilge's money would have to be put into the 'Independent Television Programmes Account' specified in Section 4 of the 1993 Act and would have to be administered in accordance with the requirements of the Act. I am sure that Teilifís na Gaeilge itself would be alarmed and appalled that its programme commissioning money would be intermingled with RTÉ's existing obligations to the Independent Television Productions Sector and I am copying this letter to Cathal Goan to keep him advised of the kind of things which are being said to FMI in this context. I am sure he will express his own views to you and to the powers that be in government in relation to this.
I attach a copy of a one page memorandum which was handed out to our members at the Open Day which you and your colleagues kindly attended on the 26 March 1998 to brief our members on the up-to-date commissioning arrangements for Independent Television Production. You will see that our estimate for RTÉ's overall turnover for 1998 is IR£170 million. You say that only IR£96m constitutes 'television programme expenditure' and then you make the deductions outlined above reducing the figure that you say constitutes 'television programme expenditure' for the purposes of the 1993 Act to IR£74m - 20% of this, approximately IR£15m, hence RTÉ's intention to lodge IR£15m to the IPU account for 1999. It is difficult for us first of all to accept IR£74m (IR£170m-IR£96m) of RTÉ's turnover is not related to television programme expenditure. We have asked you to explain what this non-television programme expenditure constitutes and you have referred to the cost of the transmission system radio costs. Presumably it also includes the costs of the orchestras and the RTÉ Guide. However to say that the television expenditure only constitutes 56% of RTÉ's overall expenditure is very difficult to believe and we must again ask you whether these figures are in fact correct. We are particularly raising this point again because it came to my attention at a recent IBEC broadcasting committee meeting (at which I was attending on behalf of FMI and RTÉ was represented by Peter Brannagan) that according to him the transmission system only costs RTÉ IR£8.5m. He went on to say that in fact the transmission system only costs RTÉ a net IR£6m because of income from third parties, presumably local radio broadcasters Today FM and the upcoming TV3. If the transmission system only costs IR£8.5m and assuming that the orchestras and other ancillary items cost no more than say IR£15m (a high estimate) it would appear that the cost of the radio stations is as much as IR£50m, a figure which is very difficult to believe in the context of television programme expenditure being IR£96m.
The difficulty we have from the point of view of FMI is that the continuing lack of full transparency from RTÉ in relation to the expenditures makes it very difficult for us to assess whether our members are receiving what they are fully entitled to. As you know independent television producers in the UK now receive well in excess of 25% of television programme expenditure from the UK broadcasters and that throughout Europe there is a far higher level of commitment to it by broadcasters. FMI members are being significantly prejudiced in terms of the development of the Independent Television Production Sector by the reluctance of RTÉ, as it appears to us, to commit itself fully to implementing its obligations under the 1993 Act. RTÉ had 5 years to prepare itself for this but, as you yourself admitted at the recent meeting, it would appear to have ignored and failed to address its obligations in this regard. It is grossly unfair at this stage to visit upon the fledgling Independent Television Production Sector not only the ÒresponsibilityÓ for the job losses, which were inevitable in RTÉ anyway and for which management and RTÉ should themselves take full responsibility, while at the same time failing fully to meet RTÉ's obligations, for which it was given plenty of time to prepare, to the Independent Television Sector. There are huge opportunities internationally for young vibrant independent television producers as evidenced for both of us at MIP TV recently but their development is being stifled by an underdeveloped home TV market. As you yourself have agreed there are substantial job opportunities in the future in independent television production but it must be based on an active local market.
We are also concerned about RTÉ's proposals in relation to the commissioning process and in particular the reference to internal heads of department being involved in or responsible for the commissioning process for independent productions. There is an inate conflict of interest which could give rise to difficulties here, in that the heads of department would regularly have to make decisions both in relation to commissioning and allocating resources as between internal and external producers. FMI believes that there should be a transparent separate commissioning and resource allocating process for independent production through a fully resourced IPU and I look forward to hearing from you on this. It would appear from your reply of the 25 March 1998 that we have no alternative but to proceed to enforce our members entitlements under the 1993 Act. It is deeply regrettable that FMI would be put to the cost of doing this but in the circumstances it would appear that we have no alternative given your response. I am more than happy to meet with you but unless there is a willingness on your part to furnish us with a greater degree of transparency and openness there is little point in doing this. We are asking our solicitors to prepare the relevant proceedings but I confirm that we will get in touch with you by phone to see if any further progress can be made before these proceedings are issued.
James Hickey
FMI Broadcasting
Sub-Committee Convenor
