RTE is bracing itself for resignations of top executives for the first time in the ongoing Tubridy secret payments scandal after the station has admitted discovering more shocking spending irregularities in its accounts.
The broadcaster is facing a fresh crisis after it emerged that there are more so-called ‘barter accounts,’ similar to the one that it has already been confirmed siphoned €1.25million in funds to pay for sporting junkets and hospitality for senior RTE staff, spouses and clients.
An RTE source has told the Irish Mirror that this latest development is “very serious” and could lead to “heads rolling” in the organisation.
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Late on Tuesday, RTE released a lengthy statement confirming the existence of three barter accounts and defended their use in a commercial context.
"The barter mechanism generates advertising revenues via barter agencies. This is additional revenue, which is derived from multiple advertising clients which, absent the barter mechanism, RTÉ might not be able to secure," the statement read.
"RTÉ generates a significant portion of its commercial revenue through the sale of advertising. This is done primarily through media agencies who each act on behalf of a portfolio of clients. This enables RTÉ to maximise revenue in an efficient and effective manner."
It went on to stress that the use of barter accounts is "commonplace" in the advertising industry, adding that "they are used by RTÉ solely in the context of its commercial activity of selling advertising airtime."
"A barter account may be used for the purpose of hospitality and entertainment in relation to advertising clients/media agencies to ensure that RTÉ can continue to increase its advertising revenue and to retain it going forward. This is entirely legitimate," RTE claimed.
During the period 2012 to 2022, RTÉ spent an average of approximately €150,000 each year on client entertainment/ hospitality.
In further comment, an RTE spokesperson said: "The average annual commercial revenue generated by RTÉ in each of those years was €150,000,000. To put this into further context, during the same period 2012 to 2022, RTÉ generated €1.65 billion in total commercial income. During this period, RTÉ used approximately €1.6 million of barter account revenue for client entertainment and corporate hospitality."
The RTE spokesperson raised three further points in a broader financial context, including the fact that RTÉ is a dual-funded public service media provider, meaning 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. RTÉ is obliged to maximise its commercial revenue which is then used to discharge the cost to it of fulfilling its public service remit."
They explained that the cost to RTE to deliver its public service remit in 2022 and that without commercial revenue of €148,000 in that period, "RTÉ would simply not be able to fulfil its public service objectives which are comprehensively outlined in the Broadcasting Act, 2009."
Secondly, they said the sale of advertising airtime comprises a significant portion of RTÉ’s commercial revenue. They pointed out that RTÉ has approximately half the available minutes of its commercial competitors.
"In addition, the advertising market in Ireland is highly competitive. RTÉ competes with over forty channels for television advertising alone, over forty radio stations and thousands of online operators. As outlined above, in 2022, commercial income represented 44% of RTÉ’s funding; that is almost half of the cost of fulfilling its public service objectives," a statement read.
"Finally, as RTÉ continues to be funded to a significant degree by commercial revenue, 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," they claimed.
Labour Senator, Marie Sherlock, said that she believes the national broadcaster is now facing “an existential crisis.”
She said: “There can be no more drip feed of information from RTÉ. I would implore the senior management team to get all their ducks in a row before returning to the Oireachtas this week.
“There is now an existential threat to our national broadcaster, and we cannot allow it to implode on itself. News breaking this evening that at least one more barter account is in use in the organisation is shocking for the public and gut-wrenching for workers at RTÉ who have fought with management for additional crews and resources.
“Every day something new is breaking from RTÉ. In order to safeguard its future, we need RTÉ to put absolutely everything on the table tomorrow.”
All eyes will now be on the Oireachtas media committee where RTE are expected to give a detailed account of what they found in their latest trawl.
The Media Committee is due to meet at 1.30pm on Wednesday to ask further questions to RTE board members and executives, as well as the former chairwoman of the RTE board, Moya Doherty, and former chief financial officer Breda O’Keeffe.
RTE’s executive and board have said they will address the issue of the additional barter accounts during the session. The hearing comes after the Government announced two reviews as part of an independent “root-and-branch examination” of RTE.
Media Minister Catherine Martin said she will use her powers under the Broadcasting Act 2009 to appoint a forensic accountant to examine the books or other records of account of the state broadcaster.
It had previously been announced that the governance and culture of RTE would be looked at, but there is also to be a second review of contractor fees and human resources.
