RTE is losing around £870,000 (€1 million) a week and will not be able to pay staff by October unless a programme of salary cuts and redundancies is implemented in the coming weeks.
The crisis comes amid growing anger among staff at the level of pay and bonuses paid to the director-general and senior management over the past number of years.
The bankruptcy warning has come from management at the Irish State broadcaster. And the director-general Cathal Goan has cautioned that up to 300 jobs are now under threat. The cash-strapped station is facing a “worst case scenario” of a budget loss of up to £87 million (€100m) — far more than the current estimate of £59 million (€68m).
The news comes as staff at the broadcaster continue to ballot this week on whether or not to accept proposed pay cuts of up to 12.5 per cent. A well-placed source at RTE has described the station as “sitting on a knife-edge” as the proposal is about to be put to a staff vote.
“This is make or break for RTE. There will be no other offers put on the table. Staff have been told that management is drawing up a list of people who they are going to make redundant, if necessary, to save money. The entire organisation is sitting on a knife-edge now.”
Speaking about the prospect that RTE could run out of money by October because of high costs and a collapse in advertising revenue, a spokesperson for the station said: “We need to claw back £59 million (€68m). It poses a significant cash crisis for RTE. Otherwise the station will be in serious financial difficulty.”
Asked about the warning that several hundred jobs are now under serious threat at the station, the spokesperson continued: “There has been an ongoing negotiation process over the last month and if that fails Mr Goan has made it clear to staff that we will have to look at alternatives. And there aren't that many alternatives available.”
There is also growing resentment among workers over the level of executive pay.
In 2007 Cathal Goan earned £385,000 (€441,000), more than US President Barack Obama. In the same year Mr Goan's basic salary was £247,030 (€283,000), his performance-related bonus was £94,000 (€108,000), his pension supplement was £20,076 (€23,000) and his other benefits amounted to £23,568 (€27,000). His salary was up from £314,244 (€360,000) on the previous year.
In the same year, managing directors in RTE earned between £130,000 (€150,000) and £174,000 (€200,000). They also received a bonus of £17,458 (€20,000), a ‘performance-related uplift’ of £4,500 (€5,200) and another £26,187 (€30,000) for simply being a member of the executive board.
Management have said they have since taken pay cuts to their bonuses but the publication of the 2008 Annual Report, currently due out, has been delayed.
Taken from the Belfast TelegraphReuse content