Italy’s RAI still a public matter

There’s good news for public broadcaster RAI on the legislative front. The Italian government decided yesterday that RAI will remain entirely state-owned, putting an end to months of speculation that one of the three RAI webs would be privatized outright or in part.

Rumors have circulated here that Fiat Group chief Gianni Agnelli was keen to acquire RAI-1 to add to the ever-growing RCS Video group (which already includes a stake in Carolco, French web TF1, and sales company Majestic). RCS Video is indirectly controlled by Fiat, Italy’s largest automobile maker.

Telecommunications Minister Maurizio Pagani had to issue special TV legislation yesterday in the wake of parliament’s recent decision to privatize the state holding company that owns pubcaster RAI as part of its strategy to reduce Italy’s massive debt.

Included in the special legislation are new regs governing RAI’s budget that give the indebted pubcaster a year of breathing space. RAI can continue to collect its license fee throughout 1993, and advertising revenue is no longer governed by the unpopular ad ceiling (which limited RAI’s total annual earnings from advertising to about $ 1 billion in 1991). The pubcaster’s ad revenue will still be limited to 12% per hour under the terms of the 1990 law.

The license fee will be up for re-approval at the end of 1993, however, when RAI’s organizational structure is due for a complete overhaul.

“This decision maintains RAI’s current status for another year until we can work out a new set of organic structural reforms,” said Minister Pagani at a Rome press conference.

In practice, it means that RAI can now charge as much as it wants for commercial air time while still respecting hourly limits. When RAI was still limited by an ad ceiling, it couldn’t exploit a top-rated event like the World Cup for potential ad revenue.

But RAI management was disappointed that the special legislation did not include a much hoped-for increase in the license fee for 1993 (currently accounting for about $ 1.5 billion in revenue for RAI in 1992).

Despite a potential increase in income now that limits on its ad revenues have been abolished, RAI will still have to make cuts in next year’s budgets to stay on an even keel financially.

Special regulation governing pay TV “is almost ready,” Pagani said.

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