Annual Reports - RTÉ

ANNUAL REPORT & GROUP FINANCIAL STATEMENTS 2007
1 Principal activities and segmental information (continued)
Segmental analysis – discontinued operation
Teilifís na Gaeilge was established as an independent statutory
entity to operate the television service broadcast as TG4 on
1 April 2007, pursuant to the Teilifís na Gaeilge (Establishment
Day) Order 2007, which implemented the relevant provisions
of the Broadcasting Act 2001. Prior to this separation, the
operations of TG4 had been conducted through Seirbhísí
Theilifís na Gaeilge Teoranta, a wholly owned RTÉ subsidiary.
The operations of TG4 have been classified as a discontinued
operation in accordance with IFRS 5 Non-Current Assets Held
for Sale and Discontinued Operations, and Serbhísí Theilifis na
Gaeilge Teoranta (STnaG), a wholly owned RTÉ subsidiary has
been dormant since the separation.
Details in relation to the discontinued operation are set out in
note 6.
(c) Other analysis
Analysis of revenues, costs and surplus/(deficit) by channel,
service and broadcasting genre and between public service
and non-public service activities
In the schedules set out at 1(e), costs and commercial
revenues are reported within channels, services and
broadcasting genres in a manner that is consistent with the
same principles used to report IBD revenues and costs.
For the purposes of this channel, service and broadcasting genre
segment analysis, News and Current Affairs IBD costs are fully
allocated to the relevant Television and Radio channels on an
appropriate usage basis and in accordance with consistently
applied and objectively justified cost accounting principles.
With the exception of the allocated costs of news output
supplied to RTÉ 2fm, all of the costs of the News and Current
Affairs IBD are covered by attributed Licence Fee revenue.
Licence Fee revenue is simultaneously attributed to those
public service channels and services that have a limited
capacity to generate commercial revenue in their own right
and therefore are, of necessity, primarily funded by Licence
Fee revenue in order to facilitate continued delivery of the
public service. The services at issue comprise RTÉ Performing
Groups, RTÉ Raidió na Gaeltachta, RTÉ lyric fm and the cost of
the support provided to TG4.
After deduction of the attributions described above, the
remaining Licence Fee revenue is attributed as a contribution
towards the production costs of indigenous programming on
RTÉ’s two public service television channels, RTÉ One and
RTÉ Two. The amount attributed to each channel is computed
by reference to the proportionate costs of indigenous
programming for each channel. No element of Licence
Fee revenue is attributed to funding the cost of acquired
programmes or to the funding of non-programme public
service operating costs incurred by the channels.
Licence Fee revenue is not directly attributed to RTÉ
Publishing, RTÉ Network, Corporate HQ or to any other
non-channel activity or service. Consequently, no element of
Licence Fee revenue is attributed to RTÉ’s free, web based,
Online public services, which are currently solely financed by
surpluses generated from commercial activities.
The residual non-channel and non-service activities are
aggregated together under the category “Other” and include
RTÉ Network IBD, RTÉ Publishing IBD (excluding “Online”
activities), non channel activities within RTÉ Television or
RTÉ Radio IBDs, together with applicable consolidation
adjustments.
The schedules set out at 1(f) are ordered so that the costs
and revenues associated with RTÉ’s various public service
and non-public service activities are clearly delineated and
separated for reporting purposes. As indicated earlier in this
report, because the cost to RTÉ of providing the full range of
public service activities is substantially in excess of the amount
of Licence Fee revenue, it is unavoidable that a considerable
amount of RTÉ’s public service activity is funded by commercial
revenue rather than by public funding. Free, web based, Online
public services are currently financed entirely by commercial
revenues generated from other activities and therefore attract
no attribution of Licence Fee revenue.
Analysis of network charges to all RTÉ services
(including TG4)
In 1(g) below, the amounts charged by RTÉNL to each of
the RTÉ services (including TG4, up to 31 March 2007) are
separately identified.
No Licence Fee revenue is attributed to RTÉ 2fm as this public
service channel generates sufficient commercial revenue to
fully cover its costs and to generate a surplus.
The funding of RTÉ Radio 1’s costs comprises:
• RTÉ Radio 1 advertising and sponsorship;
• surpluses generated by non-channel Radio IBD commercial
activities; and
• surpluses generated by RTÉ 2fm;
with the balance being made up of an attribution of Licence
Fee revenue consisting of two elements:
• an amount equivalent to the allocated cost of services
supplied to RTÉ Radio 1 by the News and Current Affairs
IBD; and
• a balancing contribution (after receipt of all other income)
towards the production costs of indigenous programmes
broadcast on RTÉ Radio 1.
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