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Matthew Vella
A study commissioned by the Broadcasting Authority on the financial viability of licensing new radio and television stations cost Lm13,000 to compile, the Authority told MaltaToday.
Grant Thornton was requested by the BA to carry out a study which would provide the necessary information on the commercial sustainability for new stations.
The study however fell short of favour with the prospective applicants for a new TV licence, who lambasted the report for having detailed the status quo in Maltese broadcasting, a scenario vastly controlled by the market dominance of the political party stations and the Public Broadcasting Services.
CEO Kevin Aquilina has reiterated that the report does not preclude the Authority from proceeding with an eventual call for applications for new broadcasting stations: “The financial scenario is one of the elements the Authority considers before taking such a step, but not the sole one. It is incorrect to allege that the Authority purposely commissioned the report to forestall any eventual call for applications.”
An edited version of the report, excluding confidential data, will be released at the end of August.
The Authority awarded Grant Thornton the relative business study. Originally the study was commissioned to deal with the radio sector but was subsequently extended to cater for television as well.
Kenneth A Bonnici, director of Grant Thornton’s Business Advisory Services, said the terms of reference for the study were to consider viability “purely from a commercial perspective: Societal, political, regulatory, constitutional and other non-commercial aspects, while indeed important from a national viewpoint, were beyond the scope of our engagement because they have no direct bearing on commercial viability. It was not within our brief to examine the success or failure of pluralism in Malta or to challenge the market dominance of the political stations.
“The market structure is what it is. If the public and political stations dominate the market, then irrespective of whether or not this is a desirable situation, this is the reality that a new investor has to face. There is little a private investor can do to change it. The decision whether to enter the market today must be based on this reality.”
The study laid down that new entrants were unlikely to generate enough revenues to sustain their operations. With the advertising slice available to non-political private stations at just Lm800,000 shared by some 10 players, the political party stations and PBS currently command Lm3.2 million of the entire advertising pie. The report said that given the current financial constraints, the revenues would not justify the costs for the production of new programme genres identified as being in high demand, such as comedies and documentaries.
The European Parliament will be looking closely at the situation of broadcasting in Europe, and especially in Italy, where super-magnate Silvio Berlusconi’s political control over state broadcaster RAI and his own media empire Mediaset, was challenged.
The ‘Report on the risks of violation, in the EU and especially in Italy, of freedom of expression and information’ was compiled by Johanna Boogerd-Quaak for the committee on Citizens’ Freedoms and Rights, Justice and Home Affairs, where it found that pluralism in the EU was threatened by the control of the media by political bodies and certain commercial organisations, such as advertising agencies, and that as a general principle, the government should not abuse its position by influencing the media.
The report was spurred on by the fact that the Berlusconi administration had been documented with repeated instances of governmental interference in the RAI public television service, starting with the dismissal of Enzo Biagi, Michele Santoro and Daniele Luttazzi at the “sensational” public request of Berlusconi himself in April 2002.
The absolute majority of the members of the RAI board of governors and the respective parliamentary control body are members of the governing parties, a structure similar to that employed in the Maltese Broadcasting Authority.
In ways not unlike the Maltese scenario, the Italian system presented “an anomaly owing to a unique combination of economic, political and media power in the hands of one man” and to the fact that the Italian Government is directly or indirectly in control of the national broadcaster.
It emphasised that legislation should be adopted at European level to prohibit political figures or candidates from having major economic interests in the media and for legal instruments to be introduced to prevent any conflict of interest. It also called on the Commission to submit proposals to ensure that members of government are not able to use their media interests for political purposes.
The report also called for an examination into whether the advertising market distorts competition in the media sector and whether specific controls on the advertising market are needed to ensure equitable conditions of access. It proposed the establishment of EU-wide minimum conditions to ensure that the public service broadcaster is independent and free from interference by the government, as recommended by the Council of Europe.
Boogerd-Quaak said a comparative study was needed on national rules relating to political information, in particular in the context of elections and referendums, and equal and non-discriminatory access for different groupings, movements and parties to the media.
matthew@newsworksltd.com
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