RTÉ COULD ENJOY an advertising boost if UK-based channels are blocked from access to the Irish market in the case of a no-deal Brexit.
However the State broadcaster also warned that its “precarious” financial position was likely to take a further hit overall if the UK goes crashing out of the EU in late March.
In a briefing prepared for government officials and obtained by TheJournal.ie, RTÉ said a no-deal Brexit would likely create an “immediate and sharp decline” in its commercial revenue.
This would have a “very severe impact” on its already unstable financial state, the broadcaster added, after losing up to €6 million per year in potential commercial income since the Brexit vote due to reduced UK advertising budgets and the weaker pound.
“Like many sectors of the Irish economy, advertising in Ireland, particularly TV advertising, is heavily intertwined with the UK,” it said.
“Given the likely broader economic consequences of a ‘no deal’ scenario in both the UK and Ireland, there would likely be significantly increased risks to the broader advertising market.”
RTÉ said the shock would “threaten the viability” of its dual-funding model, which pairs commercial income with public funding from the licence fee.
RTÉ recorded an underlying deficit of €6.4 million last year, down from the €19.4 million loss it recorded in 2016.
But its commercial revenue, much of which comes from advertising, fell to €151.5 million from €158.2 million the previous year. This was offset by a €7 million increase in licence fee income.
RTÉ director general Dee Forbes has been pushing for the licence fee system to be overhauled, previously claiming that the broadcaster was missing out on €60 million in annual funding due to fee evasion and unnecessary exemptions.
However in the briefing document, RTÉ said significant restrictions on the availability of UK-based channels in Ireland in the case of a no-deal Brexit could benefit it and other local broadcasters due to increased viewers and advertising income.
“There are now over 50 channels that sell Irish advertising broadcasting in Ireland, many hosted in the UK and broadcast here on Sky, and many more channels that are accessible to Irish audiences,” it said.
Whether this can continue in a no-deal scenario is unclear, or indeed what the long-term status of these channels will be … in any new trade agreement negotiated between the UK and the EU.”
Passporting rights
Hundreds of channels, including those from US media giants like Discovery and Disney, currently use their UK broadcast licences to reach audiences elsewhere in Europe under EU passporting rights.
In the case of a no-deal Brexit, they would need to obtain a licence in a EU member state or risk ‘going dark’ when the 29 March deadline passes.
Sky, which dominates the Irish pay-TV market, has contacted broadcasters whose channels it carries to confirm their post-Brexit plans, although a spokeswoman said the company had no concerns about its ability to continue showing its full suite of channels.
Meanwhile, at least two international broadcasters are reported to be looking at Ireland as their post-Brexit EU bases with one already applying to the Broadcasting Authority of Ireland for a licence.
The BBC has reportedly been in talks with both Irish and Dutch officials about the possibility of obtaining a local licence to avoid a potential Brexit blackout.
In its briefing document, RTÉ also flagged increased production costs and operational disruptions as headwinds if the UK failed to strike a favourable Brexit agreement.
“Large productions in Ireland, particularly TV drama and feature films, now typically involve cooperation and coproductions relationships with international productions companies, broadcasters and funders, many of whom are UK-based,” it said.
This raised questions about future investments in Ireland from British broadcasters, particularly with the lack of certainty surrounding trade and European funding rules.
RTÉ added that its operations would also “likely become more complex”, including for outside broadcasts that required cross-border or UK travel.
It said that security “particularly in Belfast and in Northern Ireland” was another possible concern.
“All of these elements combined mean that RTÉ (and its independent production suppliers) will be placed under a range of additional burdens as a result of a ‘no deal’ Brexit,” the broadcaster said.
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