RTVE closes the 2014 financial year with losses in line with its forecasts

The application of the new VAT law will mean a significant reduction in RTVE's costs.

The Board of Directors of the RTVE corporation approved this Thursday the accounts corresponding to the 2014 financial year. It should be noted that during that year there has been a significant reduction in the expected income from the contribution of telecommunications and television operators.

Specifically, during 2014 the figure collected from operator fees amounts to 150.9 million euros, that is, 42.2% below what was budgeted. The contribution budget was 261.3 million and the actual execution has been 150.9 million.

These lower incomes are a consequence, for the most part, of the fact that during 2014 it has not been possible to account for complementary settlements issued by the CNMC, and in addition there have been cancellations and refunds of this type of settlements following the ruling of the Central Economic Administrative Court (TEAC) on the appeals presented by the operators. This reduction in operator fee income is also a consequence, although to a lesser extent, of the reduction in the business figures of telecommunications operators.

This reduction in income has been partially offset by the benefits obtained from the real estate disposals that have been carried out during 2014, the benefits of which amount to 5.8 million euros.

For its part, operating expenses rose 4.4% in relation to the budget, reaching 984.7. This amount reflects the effect of the expenses of the coverage of the Sochi Winter Olympic Games, amounting to 30.7 million euros, as well as an impairment of rights to Spanish cinema amounting to 23.9 million euros, related to a change in criteria in the amortization of this type of productions.

Likewise, it is worth highlighting the unfavorable behavior of personnel expenses during 2014. Although at the end of 2013 the second collective agreement of the RTVE corporation was signed, there has not been a moderation in personnel expenses but on the contrary, since they have gone from the 349.9 million euros foreseen in the budget to the 377.1 million euros finally realized.

The RTVE Corporation is making a great effort to reduce general and operating expenses that during 2014, with the application of the Efficiency Plan, obtained results of 15 million in reduction of the initially planned expense. That is, a reduction that represents savings that accumulated during the period 2012-2014 represents more than 20%. This type of measures continues with the launch in 2015 of a new Sustainability and Efficiency Improvement Plan with which it is expected to obtain results, at least, in line with those collected so far, in addition to promoting other key aspects for the sustainability of RTVE understood in a broad sense, such as deepening the development of the public service, improving the management of human resources, a commercial plan that allows us to obtain greater income and an investment plan that allows us to acquire the assets. necessary strategies.

In short, as a consequence of these lower income from higher expenses during 2014, an operating deficit occurred in the accounts of the RTVE corporation of 134.8 million euros.

VAT Law

On the other hand, the modification of the VAT Law that came into force on January 1, 2015 will mean a refund to RTVE for deduction of input VAT that is around 90 million euros annually. In this way, income deficiencies will be alleviated to a large extent, allowing part of the deficit generated as a consequence of its application to be covered.

In short, the new VAT Law will have a favorable effect on the Corporation's expenses, bringing RTVE into line with private companies and regional television stations. This has been possible thanks to the fact that the new Law allows it to be considered that a significant part of the activity carried out by RTVE will be subject to VAT settlements, to the extent that the company can incorporate sponsorships and other commercial communication formats, for the financing of cultural and sporting events. Until now, and since the approval of the RTVE Corporation financing law, the input VAT has not been deductible, which has meant an additional cost for RTVE, which has seen its financing needs and the amount of subsidies to be granted by the State increase, and its ability to compete on equal terms with the rest of the television operators diminished.

For 2015, RTVE starts from a healthier financial and asset situation than a year ago. The volume of debt in the RTVE Corporation has been reduced by 53.6% compared to the figure with which the year began, going from 86.9 to 40.4 million euros.

Among the circumstances that have favored this change in debt trend are the contribution of the State Society of Industrial Participations (SEPI) for 130 million euros in order to compensate for accumulated losses from previous years, and the sale of real estate assets in the last two months of the year, which represented an improvement in RTVE's treasury of an additional 44.5 million.

The 2015 budget includes a sufficient level of expenditure for the performance of RTVE's activities of 949 million euros, a reasonable amount for the fulfillment of RTVE's public service obligations, taking into account that 2015 is not an Olympic year.

In relation to the expected income for 2015, the contributions of television and telecommunications operators to finance RTVE continue to present high uncertainty that makes it difficult to make a reasonable forecast at this time. Both the ordinary settlements and the complementary settlements that the CNMC could approve continue to be difficult to predict, which is one of the problems that the financing model of Law 8/2009 has posed since its approval.

During 2015, efforts continue to provide a more efficient spending structure, which is the area over which CRTVE has management capacity. This means that the expenses planned for 2015 are 3.7% lower than the 2014 closing estimate. Therefore, RTVE is committed to continuing the policy of improving efficiency and reducing costs in the areas of program, general and operational expenses, and personnel, as well as obtaining higher quality production at competitive costs while mobilizing resources towards those activities that contribute most to the Corporation's objectives.