RTÉ HAS REVEALED that it has used three barter accounts to fund €1.6 million spending on client entertainment and corporate hospitality over the past decade.
At the Public Accounts Committee last week, Social Democrats TD Catherine Murphy asked RTÉ’s Chief Financial Officer Richard Collins whether there was “a list of barter accounts”.
Collins responded: “No, there is only one barter account.”
However, late last night RTÉ said there are three barter accounts and sought to “clarify the barter mechanism and the barter account”.
In a four-page document, RTÉ said “the use of barter accounts is commonplace in the advertising industry”.
“They are used by RTÉ solely in the context of its commercial activity of selling advertising airtime,” said RTÉ in the document.
The barter account system has come to the public’s attention after RTÉ used one to pay Ryan Tubridy over €150,000.
“While traditional advertising campaigns are billed and paid for in full in cash, barter campaigns are billed on 50% in cash and 50% in credit, the credit being accumulated over time,” said RTÉ.
In its statement, the public service broadcaster said this enables RTÉ to “trade its advertising space in return for goods and services produced by other companies with the media bartering company providing the marketplace for these trades, at a discounted rate”.
Examples of such trades provided by RTÉ include advertising space being exchanged for use of hotel rooms at 65% of the face value.
The three barter accounts used by RTÉ are Astus, Active, and Miroma.
Between 2012 and 2022, RTÉ said it spent an average of around €150,000 per year on client hospitality and entertainment through barter accounts, amounting to around €1.6 million over this period.
Barter accounts are used by RTÉ for the “commercial activity of selling advertising airtime” and RTÉ said barter accounts allow it to “increase its advertising revenue and to retain it going forward”.
RTÉ said clients who advertise with them “through barter agency would not transact business with RTÉ outside this model”.
It added that this income would not otherwise have been received and that the use of barter agencies generated €5.6 million in additional revenue.
RTÉ said the use of barter accounts is a “necessary flexible business practice” for its commercial sales team and that it does not “impact on licence fee revenue in any way.”
“Such spend is derived solely from commercial revenue,” added RTÉ.
In 2019, RTÉ spent €110,000 on client travel and accommodation to the Rugby World Cup in Japan and said that the companies represented by these clients on the trip had spent €38 million with RTÉ in the previous year.
RTÉ also noted that it derives its funding from “both television licence fee and commercial revenue”.
“In this regard, RTÉ is permitted and obliged to earn commercial revenue arising from commercial opportunities as provided for in legislation,” said RTÉ.
During the period in which RTÉ spent €1.6 million on barter accounts, it said it “generated €1.65 billion in total commercial income”.
In addition to travel and accommodation for clients at the 2019 Rugby World Cup, RTÉ has spent €5,000 on 200 pairs of flip flops for a summer party for corporate clients in 2016.
€21,000 was also spent by the state broadcaster on an agency and client summer party at Teelings Distillery in Dublin.
RTÉ said “its use of a barter account for the purposes of client entertainment/hospitality is appropriate, follows standard practice within the advertising industry, is de minimis in terms of spend when compared to the revenue that is earned and is in no way derived from licence fee funding”.
“It appears on the balance sheet of RTÉ, and the appropriate controls are in place regarding oversight and spend,” added RTÉ.
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