Annual Report & Group Financial Statements 2014 Raidió Teilifís Éireann Board 54th Annual Report and Group Financial Statements for the twelve months ended 31 December 2014, presented to the Minister for Communications, Energy and Natural Resources pursuant to section 109 and 110 of the Broadcasting Act 2009. Is féidir leagan Gaeilge den Tuarascáil a íoslódáil ó www.rte.ie/about/ie/policies-and-reports/annual-reports/ 2 CONTENTS Vision, Mission and Values 2 A Highlights 3 Chair’s Statement 4 Director-General’s Review 6 Financial Review 10 What We Do 16 Organisation Structure 17 Operational Review 18 Board 84 B Executive 88 Corporate Governance 90 Board Members’ Report 95 Statement of Board Members’ Responsibilities 96 Independent Auditor’s Report 97 Financial Statements 98 C Accounting Policies 105 Notes Forming Part of the Group Financial Statements 110 Other Reporting Requirements 149 Other Statistical Information 158 Financial History 159 RTÉ ANNUAL REPORT & GROUP FINANCIAL STATEMENTS 2014 1 RTÉ’S DirecTOR-GENERAL has SET RTÉ’S VISION, MISSION AND VALUes STATEMENT Vision RTÉ’s vision is to enrich Irish life; to inform, entertain and challenge; to connect with the lives of all the people. Mission • Deliver the most trusted, independent, Irish news service, accurate and impartial, for the connected age • Provide the broadest range of value for money, quality content and services for all ages, interests and communities • Reflect Ireland’s cultural and regional diversity and enable access to major events • Support and nurture Irish production and Irish creative talent Values • Understand our audiences and put them at the heart of everything we do • Be creative, innovative and resourceful • Be open, collaborative and flexible • Be responsible, respectful, honest and accountable to one another and to our audiences 2 HIGHLIGHTS A RTÉ ANNUAL REPORT & GROUP FINANCIAL STATEMENTS 2014 3 CHAIR’S STATEMENT The last year has been one of transition for RTÉ and for its Board. My predecessor, Tom Savage, departed as Chairman after five demanding years. I would like to thank him and the other members of the last Board, the first established under the Broadcasting Act 2009. They set a high standard of governance during some exceptionally difficult years. The new Board took over at a time of economic revival which offers new opportunities, but also new challenges, for RTÉ. For the second year in a row RTÉ will break-even. Despite the €5 million reduction in public funding in the 2014 Budget, and with some growth in commercial revenue, RTÉ returned a modest surplus for a second year, in line with 2013. After the difficult restructuring in 2012, and with the challenge posed by an ever-growing number of competitors in the advertising market, this is noteworthy financial management, and I congratulate the Director-General and his team for it. 4 The new Board contains members of the highest calibre in their various fields. I look forward to working with them and to calling upon For the second year in a their talents to be used for the benefit of TR É, in both governance and advocacy roles. In 2014 RTÉ began work to prepare a new Public row RTÉ will break-even. Service Statement and Statement of Strategy. These will provide a direction for RTÉ in 2015 and beyond, and an opportunity for the Board A to consider the overall governance of the organisation. However, stabilising the finances of the organisation has been achieved at a cost. In this statement last year Tom Savage noted the impact of The Board was very pleased that the Director-General Noel Curran, the reduction in public funding announced by the Government. Though who has guided RTÉ through the last few years of restructure, agreed to there was no equivalent cut in the Budget statement last October, there an extension of his contract for an additional four years. In recognition is continuing uncertainty about the long-term funding of public service of the demands placed on the Director-General and in the interests of media. The challenge for the new Board is to build on this platform and, good governance, the Board appointed the Managing Director of News despite these financial pressures, to renew focus on the broader cultural and Current Affairs, Kevin Bakhurst, as Deputy Director-General. and social purposes of RTÉ. The Board worked through the year in 2014, with a break in the autumn The household media charge, announced by Government for 2015, was pending the appointment of new members, and the work of the new postponed and it is not clear when it will now be introduced. This Board members will be built on a solid legacy from those who have now will lead the way in making the case for clarity of funding in the sector, departed. The five sub-committees met a total of 14 times during 2014. an argument that I think is already compelling. As the introduction of a A number of changes were introduced by the new Board in its internal household media charge was very much part of the RTÉ Board’s longer- arrangements. This reduced the number of committees to three, and in term planning, a range of other options will now have to be considered. 2014 they began to focus on new challenges for the coming years. It should be noted that this is not merely a matter for RTÉ. The security and progress of the creative industry in Ireland will also be affected by The RTÉ Audience Council reached the end of its term and I wish to this issue. thank all of the members of the Council who gave so generously of their time; they contributed greatly to RTÉ’s thinking about public service and Recent external reviews of RTÉ’s operations have found it to be efficient its relationship with its audiences. In particular I would like to thank the and to have clear policy goals. Although now a much more streamlined Chair of the outgoing council, Pauric Dempsey. A priority in 2015 will be organisation, RTÉ continues to produce a wide range of programming the appointment of a new body which will build on, and advance, many on all platforms. There is, however, a need for investment in new useful lessons learned from the work of the outgoing Council. content, and content formats, and for an increased level of capital investment. Short-term measures that might enable RTÉ to weather It is a great honour to have been given the responsibility of guiding as difficult economic times should not be allowed to become a permanent complex and important a body as RTÉ through a time of significant reduction in vision, or commitment to RTÉ’s mission. change. I look forward to the years ahead. While achieving a secure funding basis is vital to RTÉ’s future, this is not just an issue for RTÉ alone. RTÉ is a key part of the wider cultural sector in Ireland. The cutbacks and reductions in production that have been necessary in RTÉ have affected the whole of this sector. Yet, even during the recession, the creative industries have been growing in importance to the economy. A renewed ambition for RTÉ in Moya Doherty developing new content and programming will directly benefit the Irish Chair creative community generally. RTÉ is the largest direct employer in the sector; it is the largest employer of musicians in Ireland, and the largest commissioner of independent television productions. RTÉ’s involvement in cultural events helps bring audiences to those events. RTÉ is aware of its responsibilities to lead development in this area, which is so important to Ireland’s international image and reputation. RTÉ is the largest direct In all that RTÉ has done and continues to do, the audience remains employer in the sector; it at the centre. We must continue to build a relationship of trust with is the largest employer of the people of Ireland and to connect with them. RTÉ continues to be available on ‘traditional’ platforms, but is also present on new platforms musicians in Ireland, and where, increasingly, the national conversation is taking place. One example is the joint initiative with the GAA called GAAGO, an exciting the largest commissioner new development that allowed Irish people across the world to watch of independent television live matches during the GAA football and hurling championships. Understanding our audience is key to the ongoing success of RTÉ. The productions. range of audience data now available will allow the Board to make more informed decisions. RTÉ ANNUAL REPORT & GROUP FINANCIAL STATEMENTS 2014 5 DirecTOR-GENERAL’S Review Many times in my career in RTÉ, I have been fortunate enough to feel genuinely proud of the organisation, the work we all do and the impact it can have. I certainly felt that during 2014. Not just because of the stand out programming, reporting and innovations RTÉ delivered across the year, but also because of the backdrop against which they were made. RTÉ has come through one of the most difficult and turbulent periods in its history. Over the past three years RTÉ has met, head on, the multiple challenges of editorial mistakes, dramatic falls in revenue, new competition and disruptive technology. Faced with these challenges, RTÉ has responded by developing a clear strategy to position the organisation for the long-term. We are now well on the way to evolving from a public service broadcaster to a public service media organisation relevant and essential to the increasingly digital lives of Irish people. The five-year strategy that TR É published in 2013 has set in train a period of change and renewal in RTÉ that continued apace during 2014.