PSBs Scramble to Meet Rule Proposals

Crushing costs and falling revenues called SSR-SRG General Director Armand Walpen to meet with Swiss press Tuesday (June 28) and deliver a warning. More cuts and more restructuring are necessary for the Swiss public broadcaster facing technical, programming and political demands. “We must economize,” said Walpen, reported by Swiss news agency ATS and the Zürich daily Neuen Zürcher Zeitung (NZZ).

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In spite of ending the 2004 fiscal year slightly ahead of budget SSR-SRG Finance Director Daniel Jorio told the assembled press that the loss of CHF 70 million (€45 million) cannot be made up after an anticipated redistribution of license fee revenue in the yet to be finalized new Radio and Television law (LRTV). The Swiss Parliament is said to favor provisions in the new law to fund local radio and television broadcasters.

Jorio also called the country’s ad market “dull,” no revelation to Swiss private sector broadcasters. The proposal to spend some of the license fee money on the smallest private broadcasters originated with the regulator – Federal Office for Communications (OFCOM) – to help prevent private sector broadcasting from collapse. About 20% of SSR-SRG’s CHF 1.5 billion (€990 million) budget comes from television advertising and sponsoring.

SSR-SRG in March proposed slashing the popular web-portal, news service Swissinfo, successor to international broadcaster Swiss Radio International. The howls from Swiss living abroad were heard by Parliament; members asking SSR-SRG to rethink the decision. Walpen has also proposed breaking up teletext service Swiss Text. Those proposals are necessary, according to Walpen, to avoid touching “prime time.” He also suggested the license fee – already the highest in Europe - might need to be raised and the Federal government would be asked to compensate for retired and disabled people exempt from paying.

Walpen and Jorio – like other PSB directors – no longer feel protected by market dominance on traditional platforms. Jorio said SSR-SRG needed to invest amounts similar to “foreign competitors” for programming and technology. One of those constantly escalating costs is sports rights. Walpen indicated that spending “astronomical sums” on Olympic and football rights cannot continue. And, also, SSR-SRG - like many public service broadcasters – invests significantly in local cultural events, activities likely threatened by budget shortfalls.

On Monday (June 27) BBC Broadcast, a multimedia production unit, was sold to unit of Australian investment house Macquarie Group. A BBC internal review of commercial businesses concluded that BBC Broadcast, while essential, did not need to be owned by the BBC. The announced sale price was £166 million (€248 million).

When approved, as expected, by the Culture Ministry, BBC Broadcast will be owned by Creative Broadcast Services, 65% owned by Macquarie Capital Alliance Group and 35% by Macquarie Bank. A 10 year contract between the BBC and Creative Broadcast Services, through 2015, is worth about £500 million (€747 million). Other bidders for BBC Broadcast were Apax Partners, Exponent Private Equity and Thomson/Technicolor. Macquarie Group owns Broadcast Australia the transmission services provider for the country’s public broadcasters. A separate unit of Macquarie Group owns UK transmission services provider Arqiva, formerly known as ntl:Broadcast.

The BBC’s commercial competitors want Auntie out of any and all ventures that might prove profitable or competitive.

“There is overwhelming evidence that the BBC enters into quasi-commercial ventures,” said David Epstein, Commercial Radio Companies Association (CRCA) chairman before a Parliamentary committee reviewing the BBC’s mission and funding. “It has to be dealt with quickly.”

PSBs Scramble to Meet Rule Proposals

The BBC looks ahead to the Charter Review and sells an asset. Swiss public broadcasting says a new radio and TV law will cause cuts.