2008 Reports and financial statements RAI GROUP Reports and financial statements 2008 RAI GROUP Reports and financial statements at 31.12.2008 General contents 3 Corporate Bodies 5 Organizational Structure 7 Report on operations 13 Rai 23 Rai’s offering 31 TV Division 59 Radio Division 69 New Media & DTT Division 77 Commercial Division 85 Broadcasting Division 89 Parent Company’s financial and earnings position 105 Additional information 115 Recommendation to Shareholders 117 Rai SpA financial statements at 31 December 2008 185 Shareholders’ Meeting 187 Consolidated financial statements of the Rai Group at 31 December 2008 267 Financial statements of Subsidiaries 323 Corporate Directory 2 Corporate Bodies Corporate Bodies 3 Board of Directors (until 25 March 2009) (from 26 March 2009) Chairman Claudio Petruccioli Paolo Garimberti Directors Giovanna Bianchi Clerici Giovanna Bianchi Clerici Sandro Curzi (1) Rodolfo De Laurentiis Gennaro Malgieri (2) Alessio Gorla Angelo Maria Petroni Angelo Maria Petroni Nino Rizzo Nervo Nino Rizzo Nervo Carlo Rognoni Guglielmo Rositani Marco Staderini Giorgio Van Straten Giuliano Urbani Antonio Verro (until 31 December 2008) (from 1 January 2009) Secretary Franco Di Loreto Nicola Claudio Statutory Auditors Chairman Domenico Tudini Regular auditors Paolo Germani Gennaro Ferrara Alternate auditors Rosa Grimaccia Domenico Mastroianni (until 1 April 2009) (from 2 April 2009) General Manager Claudio Cappon Mauro Masi Independent auditors PricewaterhouseCoopers (3) (1) In office until 22 November 2008. (2) In office until 25 September 2008. (3) The firm has been engaged for the audit pursuant to Article 2409-bis, as approved by the shareholders’meeting on 16/07/2007. 4 Organizational Structure Organizational Structure 5 Ministry for the Economy SIAE and Finance 99.56% 0.44% Board of Directors General Manager (*) Deputy General Manager (**) for coordinating the offering Television Radio Nuovi Media & DTT Commercial Broadcasting Division Division Division Division Division Networks Radio New media Sipra Rai Way - RaiUno - Marketing - Digital terrestrial TV Rai Trade - RaiDue - Programme and - Support and planning - RaiTre scheduling optimisation for multimedia engineering - Raitalia - Production - RaiNet - Rai Notte - Radio resources - RaiSat - Radio1 (***) - Rai Click News and information - Radio programming programmes - Public Service channels - TG1 - TG2 - TG3 - TG R - Rai Sport - Rai Parlamento - RaiNews 24 - Televideo - Foreign correspondents Tv support - Television resources - TV production - Archives - Rai Corporation Genres (*) includes Rai-Vaticano and Rai Quirinale - Rai Cinema (**) head of Genres, TV Programming and Marketing and Sports Rights (with 01 Distribution) (***) includes Radio News programming - Rai Fiction Incorporated entities in bold - Rai Educational Report on operations 8 REPORT ON OPERATIONS ai posted a loss of 7.1 million revenues from licence fees, which was To the euros (the Rai Parent Company largely due to the increase in the per- Rrecorded a loss of 37 million unit licence fee, but was also aided by Shareholders, euros), with a positive net financial a rise in the number of subscribers. position both for Rai and for the The number of subscribers increased Group (at 197 million euros and 21 by almost fifty thousand units, million euros, respectively), despite a reaching a total of almost 16 million decline in comparison with the families. previous year. In terms of costs, as in every ‘even’ The 2008 result is largely stable in year, the result was strongly influenced relation to the final figures of the by expenses linked to big sporting previous year which closed with a loss events, which had an overall impact of 4.9 million euros, due to the (including production costs) of about following significant phenomena. 180 million euros. There was a significant drop in In overall terms, however, the revenues from advertising: performance of outside costs – net of investments by advertisers big sporting events – remained highlighted a negative general stationary, at the same level as the trend in line with the performance previous year. This important result, of the economy: an increase in considering the presence of inflation during the first quarter, additional charges to improve the which slowed in the second quarter offer of digital programmes, was and then suffered an even more achieved thanks to the continuation marked decline in the second half and strengthening of actions to of the year, before collapsing increase the efficiency and altogether in the last quarter, with rationalisation applied to all an estimate for the whole year corporate areas. drawn up by Nielsen highlighting a 2.8% contraction in the market in The Income Statement also benefited comparison to 2007. from the containment of labour costs, largely stationary, at the same level The drop in advertising revenues for as the previous year (+0.5% in Rai came to over 40 million euros, consolidated terms). Expenses due to despite benefits from income linked to the renewal of contracts and the the big sporting events that absence of welfare bonuses were, in characterized summer programming fact, offset by efficient interventions (European Football Championships on the variable components and by and the Olympics). the effects of early retirement incentives implemented during the The whole decline was concentrated previous year and also confirmed in in the last three months of the year, as 2008. a consequence of the international financial recession triggered by the In greater detail, as regards revenues, bankruptcy of Lehman Brothers last the cost of the individual licence fee September. for 2008 went up by 1.9% (from 104.00 to 106.00 euros). This is a The contraction of advertising percentage which is substantially in revenues was offset by the rise in line with the planned rate of inflation. Report on operations 9 The policy for the annual adaptation then spread to the rest of the world, Within the space of a few years, of the per-unit licence fee has been with the collapse of stock market viewers will find themselves projected confirmed on the same basis again indexes, has gradually affected the into a multi-channel digital for 2009, with a rise of 1.5 euros (to real economy, which was already environment, in which general interest 107.50 euros). showing signs of slowing down. offerings and new theme or mini- The licence fee, which, despite recent The heavy repercussions, extended to generalist channels will compete on increases continues to be the lowest in all the main sectors of the economy, equal terms; advertising will follow Europe for public broadcasting with a consequent rise in the evolution of the offer, companies, also holds the negative unemployment figures, have triggered restructuring its allocation processes; record for particularly high tax a general drop in consumption. the rights market will also be affected evasion, estimated at around 25%, by this systemic change. Competition compared with the European average The extent and depth of the recession in general will gain increased of under 10%. A gradual alignment have led the Governments of all importance, as will the competition with the European standard, with a countries to launch significant between free and pay TV. consequent recovery of significant supporting plans, initially for the resources, would require a revision of banks and secondly for the main During this phase of transition in the the payment collection methods, industrial sectors. television system, a leading role is joined by a strengthening of the played by the switchover to digital regulatory instruments designed to In this context, the advertising market, terrestrial television. DTT is the combat evasion, which are currently already characterised by a general fulcrum, the privileged platform blatantly inadequate. decline in the growth rates of the around which Rai is going to build the traditional compartments, closed mission of the Public Service of the More effective actions to considerably 2008 with a decline of about 3%. future. expand the subscriber portfolio would have positive effects, not only on Rai, Due to the recession that hit the 2008 witnessed entry into a phase of which would be aided in the pursuit of sector in the last quarter of 2008, acceleration and irreversibility, also its mission as a Public Service, but traditional television advertising due to important institutional also on viewers, thanks to the suffered a loss of 1.2%. The only decisions: the launch by the Italian balanced distribution of the benefits media which have succeeded in Communications Authority of the resulting from the reduction in tax maintaining a positive sign are the frequency planning process, adhered evasion, and also on the audiovisual pay-TV satellite platform, Internet and, to by enterprises, configuring a industry in general. to a lesser extent, radio. consensual mechanism to rationalise the spectrum and construction of the On the basis of the results of the The aspect that best highlights the networks and the Government’s separate accounting for the 2007 structural change of the market is the implementation of the switch-off financial year, certified by independent progressive decline of the advertising calendar by areas, with definite, close auditors chosen by the Italian contacts issued, which has been dates, such as to complete the Communications Authority, the further accentuated during this phase. process by 2012. imbalance between public resources This decline