'DAISY (Amy Huberman) is operating way outside her comfort zone as the economic downturn bites hard and threatens the existence of the clinic."

With those prophetic words, RTE this year launched the seventh and latest series of its hit medical drama, The Clinic. Last week, the broadcaster announced that it was dropping it entirely.

Ratings for The Clinic have fallen, says RTE, and axing the show underlines the fierce financial pressure on all Irish media. But the cure comes at a high price: broadcasters now permit banks to bankroll current affairs, and the author of a Broadcasting Authority of Ireland report would have them allow Ryanair to place political advertisements.

Last week, RTE announced that HSBC Corporate Banking Ireland would become the first sponsor of RTE Radio 1's Drivetime, Ireland's most popular evening radio show. At the very time when banking recklessness and malpractice are at the core of our national crisis, banks already pay for the Late Late on RTE and Tonight with Vincent Browne on TV3, among other current affairs programmes.

And now there is a suggestion that Michael O'Leary and others be allowed to buy airtime from broadcasters to mount political campaigns on radio and television. The public thinks it is a bad idea, but a consultant hired by the Broadcasting Authority of Ireland disagrees.

The financial pressure on RTE has been further ratcheted up by a suggestion that the station may be forced to forego TV licence fees of social welfare recipients. The bill for these comes to €56.7m and is currently paid by the State. Some civil servants who are said to have raised the possibility of change are making no comment publicly.

RTE denies that it is seeking an increase in the licence fee of €160 per household. But the station is also being threatened by further cuts to assist TG4 to the tune of €10m a year.

Any diversion of RTE funding to TG4 (as suggested by An Bord Snip Nua) would be on top of the hour of programming each day that RTE already provides free of charge to the partly Irish-language service. TG4 itself escaped any proposed cuts in the Bord Snip exercise. Ten million euro is the same amount that RTE says that it costs to make all of its original Irish documentaries, including series such as Would You Believe? and 21st Century Child.

Annoyance at the salaries of top presenters is not a good basis for deciding the future of Irish broadcasting. There was something of the mob about recent outbursts on RTE against Pat Kenny, with the whiff of those town hall meetings that have plagued US politics this year. If presenters are overpaid, wildly slashing RTE's income is not the way to deal with the problem.

Political advertising has long been banned from the airwaves in Ireland and Britain, but there are no such restrictions on political ads in newspapers or on the internet. A new RED C opinion poll shows that most Irish people are against any change in the law, and would regret the Americanisation of political campaigns.

During the second Lisbon treaty debate, both Michael O'Leary's Ryanair and the multinational company Intel paid for full-page spreads in Irish newspapers. They supported a 'Yes' vote. This broke new ground in Ireland, where political advertising has traditionally been paid for only by political parties.

There are legal controls on the amount that parties may spend on political advertising. As with much Irish regulation, these rules are far from watertight. In any event, such rules can be sidestepped by people with money who wish to mount ostensible non- partisan campaigns on particular issues where those campaigns just happen to benefit particular parties.

A famous case of such ostensibly non-party activity in the USA was the campaign by the so-called Swift Boat Veterans for Truth that sank Vietnam veteran John Kerry's campaign and helped to reject George Bush. In Ireland, campaigns by Ryanair and Intel helped pro-Lisbon parties.

Such facts may help to explain why the Irish public is against changing the law that forbids political ads on TV, and why the Broadcasting Authority of Ireland (BAI) seemed to distance itself this month from its own consultant, Dr Kevin Rafter, who had proposed changes in line with some European precedents.

Rafter, head of the media department at Institute of Art, Design and Technology, Dun Laoghaire, conceded, "Central to any legislative and regulatory change must be the principle of equity of access to public discourse on the airwaves."

But, given the recent history of "light-touch" regulation in Ireland across many areas, the public will need persuading that any such "reassurance" for less wealthy interests is dependable.

And the BAI also seems unconvinced. The Irish Times reported on its front page Rafter's 'Call to relax ban on political ads for TV and radio', but the BAI responded later by headlining its press release, 'Independent report confirms majority support for retention of prohibitions on political advertising in Ireland'.

Yet the BAI is fully aware of the revenue problems now facing Irish media, and it has rushed to implement a new EU directive that will help broadcasters raise cash by relaxing restrictions on sponsorship and product placement (where Tayto, for example, might pay Ryan Tubridy to eat its crisps as he introduces the Late Late Show).

Sponsorship and product placement have major implications for the kind of programmes that get made and for their presentation style, choice of presenters and content. Already, one change in regulations has overturned the former ban on sponsorship of current affairs.

Now, a new proposal appears to envisage radio audiences having product placement foisted on them without any clear notification that it is happening.

RTE itself is more worried about reports that the Department of Social and Family Affairs and the Department of Finance may be about to slash its income. In 2008 RTE earned €440m, with €200m of that coming from the annual TV licence. Hit by the recession, with advertising down across all media, RTE expects to earn €75m less this year. By measures that included its staff accepting pay cuts, RTE has made up about €57m of that drop but still faces a deficit of around €17m.

Politicians, like the public, are seldom aware of the real costs of TV production. Irish production costs are generally highly efficient by international standards. A one-hour RTE documentary comes in at around €120,000, while a half-hour drama costs about €500,000. Anyone who thinks that such TV costs are very high knows little about television production. TV3, reported to be thinking of taking over The Clinic, will think twice before doing so.

If the Department of Social and Family Affairs now ceases to pay TV licences for pensioners and if RTE is forced to absorb the resulting hit of €56.7m, then the impact -- not just on RTE, but on all broadcast media -- could be traumatic. RTE would be forced to compete more fiercely for commercial revenue. Given its dominance of the market, it can more easily attract advertisers and sponsors and so make life harder for its competitors.

But it may be that RTE is just being softened up by the TV licence threat for that smaller cut of €10m that An Bord Snip proposes be diverted to TG4. TG4 already receives about €1 in every €3 of public monies spent on broadcasting in the Republic of Ireland despite attracting, on average, fewer than one in every 20 viewers for any channel licensed in the State.

Prof Colum Kenny teaches television policy at DCU.

Dr Kevin Rafter's report

on political advertising

can be found at www.bai.ie

Sunday Independent