RAI rev up, profit down

Funds drained from increased investments

MILAN — Italian pubcaster RAI is set to unveil annual financial results for 1998, which will be down noticeably from the preceding year.

RAI will have a net profit of 83 billion lire ($45 million) in 1998 compared with $75 million a year earlier, an RAI spokesperson told Daily Variety. During this same period, ad revenues rose 7.5% to $1.03 billion from $960 million, while overall revenues, including state aids, should post a similar increase to about $2.6 billion.

RAI attributes this setback primarily to two factors: “Compared to 1997, we were forced to drain more funds because we have increased our investments and because the costs for TV rights have grown, in particular for sports,” RAI vice director general Claudio Cappon said.

“We could not reduce investment and expenses for products because we want to be a strong player on Italy’s market,” he added.

Last year, RAI increased its technical investment, including the launch of its first digital channels, by 30% to about $200 million. The production and acquisition costs continued to grow compared with the $920 million spent in 1997.