RTÉ has disclosed the existence of two more ‘barter’ accounts which have been used to fund €1.6 million on client entertainment and corporate hospitality over the last 10 years.
In a note sent to the Oireachtas Media Committee late on Tuesday evening, the broadcaster defended its use of the accounts, including for hospitality.
“This is entirely legitimate,” RTÉ wrote. “Moreover, this model is commonly used by competitors and is standard industry wide”.
However, it is likely to face further scrutiny over apparent contrasts between what it told the Public Accounts Committee (PAC) last week and what the documents sent on Tuesday evening suggest.
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A barter account is one linked to a system through which the station used advertising space to pay for certain goods and services.
The barter account system first came to public attention when it was disclosed that RTÉ used one to pay its highest profile presenter, former Late Late Show host Ryan Tubridy, €150,000 in hidden payments.
According to the documents, there are three barter accounts: Astus - used for the payments to Mr Tubridy - Active and Miroma.
Last week, RTÉ chief financial officer Richard Collins indicated to the PAC that “there is only one barter account”. The barter account used to pay Mr Tubridy was not under the control of the finance function in RTÉ until recently.
When asked how much money had gone through the barter account, RTÉ told the committee between €1 million and €1.25 million in the last 10 years, and offered examples of spending on client entertainment - including a trip to the rugby world cup in 2019, champions league final tickets and 10-year tickets from the IRFU.
The note to Oireachtas Media Committee, however, details “approximately €1.6 million of barter account revenue for client entertainment and corporate hospitality”.
In its note, RTÉ says that barter mechanisms generate advertising revenues via barter agencies.
“This is additional revenue, which is derived from multiple advertising clients which, absent the barter mechanism, RTÉ might not be able to secure,” it says.
“It is important to note that the use of barter accounts is commonplace in the advertising industry. They are used by RTÉ solely in the context of its commercial activity of selling advertising airtime.”
It outlines how the broadcaster spent approximately €150,000 per year on client entertainment and hospitality over the period 2012-2022, paid through the barter account, against average annual commercial revenue generated by RTÉ annually of €150 million.
It said that clients who were brought on the Rugby World Cup trip in 2019, which cost €111,000, had spent €38 million with RTÉ in 2018.
It says that through the period 2012-2022, RTÉ earned more than €8 million in revenues from barter agencies, ultimately generating an additional €5.6 million in additional revenue.
The mechanism is based on 50 per cent of a booking being paid for in advertising space and 50 per cent of it in credits or services the advertiser can provide. RTÉ can avail of credits or cash them in, in which case a management fee is charged. It provides an example of the use of hotel rooms with transactions being priced at 65 per cent of the face value, allowing for discounts and the fees charged by the bartering company.
“Its use has proved to be a necessary flexible business practice for the RTÉ commercial sales teams. It does not impact on licence fee revenue in any way, nor is any spending on client hospitality/entertainment derived from licence fee income in any way. Such spend is derived solely from commercial revenue.”
It argues that clients who work through a barter account typically do not transact business with RTÉ outside the model. “Therefore this income is additional to revenue that comes in through the traditional route and would not otherwise be received.”
The document concludes: “As RTÉ continues to be funded to a significant degree by commercial revenue, its use of a barter account for the purposes of client entertainment/hospitality is appropriate, follows standard practice within the advertising industry, is de minimis in terms of spend when compared to the revenue that is earned and is in no way derived from licence fee funding. It appears on the balance sheet of RTÉ, and the appropriate controls are in place regarding oversight and spend.”
