RAI GROUP Reports and financial statements 2009 Reports and financial statements at 31.12.2009 General contents 2 Corporate Bodies 3 Organizational Structure 5 Report on operations 11 Rai 21 Rai’s offering 31 TV Division 61 Radio Division 71 New Media Division 75 Commercial Division 83 Broadcasting and DTT Division 89 Parent Company’s financial and earnings position 105 Additional information 115 Recommendation to Shareholders 117 Rai SpA financial statements at 31 December 2009 189 Shareholders’ Meeting 191 Consolidated financial statements of the Rai Group at 31 December 2009 271 Financial statements of Subsidiaries 323 Corporate Directory 2 Corporate Bodies Board of Directors (until 25 March 2009) (from 25 March 2009) Chairman Claudio Petruccioli Paolo Garimberti Directors Giovanna Bianchi Clerici Giovanna Bianchi Clerici Angelo Maria Petroni Rodolfo De Laurentiis Nino Rizzo Nervo Alessio Gorla Carlo Rognoni Angelo Maria Petroni Marco Staderini Nino Rizzo Nervo Giuliano Urbani Guglielmo Rositani Giorgio Van Straten Antonio Verro Secretary Nicola Claudio Statutory Auditors Chairman Domenico Tudini Regular auditors Gennaro Ferrara Paolo Germani Alternate auditors Rosa Grimaccia Domenico Mastroianni (until 1 April 2009) (from 2 April 2009) General Manager Claudio Cappon Mauro Masi Independent auditors PricewaterhouseCoopers (1) (1) The firm has been engaged for the audit pursuant to Article 2409-bis, as approved by the shareholders’meeting on 16/07/2007. Corporate Bodies and Organizational Structure 3 Organizational Structure Ministry for the Economy SIAE and Finance 99.56% 0.44% Board of Directors Deputy Director General coordination of radio and television offering Deputy Director General switchover to digital terrestrial and multi-platform strategies General Manager Deputy Director General production and management division Deputy Director General p roperty business, procurement and operational services TV Radio New Media Commercial Broadcasting and Division Division Division Area DTT Networks Radio RaiNet Sipra Digital Terrestrial - RaiUno - Radio1 (*) Rai Trade Rai Way - RaiDue - Radio2 Rai Corporation - RaiTre - Radio3 - Raitalia - GR Parlamento - Rai Notte - Public utility radio - Rai Educational channels Information - TG1 - TG2 - TG3 - TGR - Rai Sport - Rai Parlamento - RaiNews 24 - Televideo - Foreign correspondents General Interest - Rai Cinema (with 01 Distribution) - Rai Fiction TV Support - Television resources - Produzione Tv (*) Includes Rai Giornale Radio (Gr1, Gr2, Gr3) - Teche - RaiSat Incorporated entities in bold Report on operations 6 REPORT ON OPERATIONS n 2009, the Rai Group posted a loss confirmed – within a constant setting. To the of 61.8 million euros (loss of 7.1 This was thanks to a cost correction Imillion euros in 2008), with a manoeuvre launched by the Company Shareholders, negative net financial position of when the first signs of the advertising 151.5 million euros (positive by 21.1 crisis began to show in the last quarter million euros in 2008). of 2008. This manoeuvre made it possible to significantly restrict the extent The Parent Company, Rai registered a of the loss. loss of 79.9 million euros (37 million euros in 2008) and a positive net Actions to increase efficiency and financial position of 52.5 million euros rationalisation applied to all corporate (196.8 million euros in 2008). areas were strengthened in the second half of the year and this had an The negative results of 2009 can be immediate positive effect, creating the attributed to the following significant conditions to permanently consolidate phenomena. the relative benefits. The difficult situation that characterized The Income Statement also benefited the advertising market had a strong from the stability of labour costs, thanks influence on company decisions to to the full application of the effects of purchase advertising time and drastically the early retirement incentives redimensioned the budget allocated to implemented during 2008 and expenditure for advertising. confirmed in 2009. In keeping with the general economic In greater detail, as regards revenues, trend, the decline by Rai showed a the cost of the licence fee for 2009 tendency, quarter by quarter, towards went up by 1.4% (from 106.00 to progressively lower rates, closing 107.5 euros). This is a percentage nevertheless with a decline close to which is substantially in line with the 17%. planned rate of inflation. The significant drop in revenues from The policy for the annual adaptation of advertising at consolidated level was the per-unit licence fee has been approximately 200 million euros, which confirmed on the same basis again for must be added to the 2008 drop of 2010, with a rise of 1.5 euros (to over 47 million euros. 109.00 euros). The adaptation of the per-unit licence fee, in line with the long-term trend, was The licence fee continues to be the unable to do anything but marginally lowest in Europe for public broadcasting contrast a phenomenon of such a vast companies and also holds the negative extent. record for particularly high tax evasion, with reference to both the special fee A positive contribution was assured by and the ordinary licence fee, the latter the dynamics of the subscribers being estimated at nigh on 30%, portfolio: paying users, despite numbers compared with the European average of growing less than last year, have almost under 10%. reached the 16-million family mark. A gradual alignment with the European In terms of operating costs, the tendency standard, with a consequent recovery of towards a reduction in expenditure was significant resources, would require a Report on operations 7 revision of the payment collection finally began at the beginning of of generations which have grown up in methods, joined by a strengthening of 2010. already digitalised contexts, this the regulatory instruments designed to transformation is now involving combat evasion, which are currently In this context, the advertising market, traditional television, which is blatantly inadequate. following the general decline of about undergoing an important rethinking and 3% in 2008, fell by over 13% (Nielsen repositioning phase. More effective actions to considerably figures). expand the subscriber portfolio would The stakes are high for the entire help Rai in the pursuit of its mission as a Television advertising posted a loss of system. For the Public Service in Public Service in a rapidly changing about 10% in 2009 (Nielsen figure). particular, it has become essential to context which requires consist The only media that have succeeded in make a decisive contribution to build up investments in technology and maintaining a positive sign are the the elective platform of users in general, particularly in the products offered. Internet and, to a lesser extent, satellite the doorway to access to the digital TV. offering for everyone. These actions would also have positive This process of breaking down and effects on viewers, thanks to the Moving on to the more specific setting rebuilding the market and the offering balanced distribution of the benefits of the reference market, competition was accelerated by the decision to make resulting from the reduction in tax entered a new phase. Traditional the switchover to digital terrestrial evasion, and also on the audiovisual competition between players operating television not a purely technological issue industry in general. on the same broadcasting platform was left to the free enterprise of the single joined by competition between those operators, but a project of the nation. On the basis of the results of the operating on different platforms, at an separate accounting for the 2008 unprecedented level of intensity. A project characterized by strictly pre-set financial year, certified by independent timing with brief intervals between auditors chosen by the Italian Furthermore, the transformation and interventions, which initially seemed risky Communications Authority, the hybridisation of the consolidated but is now proving to be within the imbalance between public resources business model of the main and system’s reach, with a regulatory and the costs sustained by the traditional market leaders increasingly arrangement which intends to facilitate concession holder for the fulfilment of proposes free television as an the admission of new players without public-service responsibilities amounts alternative to the pay model. unfairly penalising those already in to almost 550 million euros. The aspect that best highlights the operation. This imbalance falls to 335 million structural change of the market is the euros after the allocation of the specific progressive decline in 2009 of the Rai has chosen digital terrestrial TV as share of the advertising revenue from advertising contacts issued by the its prioritised platform, around which, in the programming. general interest channels. observance of the orders regarding technological neutrality and As regards the possible developments Consequently, while the prophecies competitiveness, it is building the of the macro economic framework, which proclaimed the imminent demise mission of the Public Service of the since March last year, tension on the of traditional television will not come future, already with some significant and financial markets has eased somewhat true for a long time to come, the radical important editorial success. and the quality ratios of the real change in the market structure, which economy have begun to show signs of those with greater awareness