Major coup for state broadcaster in bid to up revenue
Published 26/10/2011 | 05:00
RTE's success in recruiting Today FM boss Willie O'Reilly as its new group commercial director represents a major coup for the state-owned broadcaster.
Ever since Noel Curran was appointed RTE director general 11 months ago, the broadcasting sector has been waiting for him to make a big move. Now after nearly a year on the job it is clear that Mr Curran has made up his mind about what he wants for RTE.
In June RTE announced plans to cut 75 jobs. Then in September it revealed that it had received so many applications for the redundancy scheme that it was looking at further voluntary redundancies.
Then earlier this month Mr Curran bluntly told RTE's top earners that if they didn't agree to a 30pc cut in their peak 2008 salaries they could leave.
However, cutbacks in the RTE wage bill -- the most recent redundancy programme will trim at least €6m off annual operating costs -- can only go so far in plugging the huge financial hole, with annual losses of €17m expected this year.
The recession has hit RTE hard with commercial revenue collapsing from €245m in 2007 to just €175m last year, with the downturn slashing corporate advertising and sponsorship budgets.
This collapse in commercial revenue poses by far the gravest threat to RTE over the next few years. If he is to preserve RTE in anything resembling its current form then it is vital Mr Curran staunches the haemorrhage in the commercial revenues. Which is almost certainly where Mr O'Reilly comes in.
Without the comfort blanket provided by the licence fee, which garnered RTE €196m last year, the commercial broadcasters have had to be far more innovative when seeking to secure advertising and sponsorship revenue.
During his 12 years as Today FM chief executive Mr O'Reilly has managed to push up the independent radio station's revenues from just €10.5m to €27m. This was despite not one but three changes of ownership over this period. Today FM has now overtaken 2FM to become the second-most popular radio station in the country.
At RTE Mr O'Reilly will be expected to reinvigorate the ailing commercial revenues. This challenge has become even more urgent now that the Competition Authority has forced RTE to abandon its previous tactic of offering big advertisers discounts in return for them guaranteeing it a fixed proportion of their total advertising spend.
When this change comes into effect in the middle of next year RTE's revenues are going to come under even greater pressure.
All of which begs the question: why is Mr O'Reilly leaving Today FM for RTE now? The timing has certainly been unfortunate for Today FM, coming in the middle of the controversy triggered by its plans to replace Sam Smyth as the host of its long-running Sunday brunchtime show.
Conspiracy theorists have speculated that the two events are somehow linked.
Maybe, maybe not.
Mr O'Reilly is a radio veteran of 30 years. Among his previous jobs in the sector was a 10-year stint as producer of the late Gerry Ryan's 2FM morning show.
His decision to return to the RTE mothership confirms an unpalatable truth -- that 22 years after the debut of Century Radio heralded the end of its legal monopoly, RTE remains very much at the centre of the Irish broadcasting universe.
Regardless of the reasons for the switch, Mr O'Reilly has it all to do at RTE. His success or failure in his new job will almost certainly determine not just his own future career path but also that of his new boss Mr Curran.