Keeping RTÉ in the black will present a major challenge for incoming director-general Mr Cathal Goan.

Sceptics wonder whether the station will be able to produce its promised surplus of 3 million this year, never mind staying out of the red in 2004.

However, chief financial officer Conor Hayes and Bob Collins have given very public assurances the 3 million target will be met.

Large sponsorship deals like the recent one agreed with Aer Lingus and strong ad revenue in the run-up to Christmas should help. But even if the 3 million target is met, the years ahead could still be tough.

While the licence fee is now index linked (albeit with some conditions attached), the other major source of RTÉ's income, television advertising, is under huge pressure. In the last few years the station has reported flat television revenue figures of about 99 million.

Television brings in three times the revenue of radio, but keeping the TV revenue at around 100 million could be difficult. Why? Competition is the short answer.

The following stations are now competing with RTÉ for television advertising - TV3, various Sky channels, E4, UTV and TG4. MTV and Nickelodeon are expected to take Irish advertising from next year too.

Meanwhile RTÉ is in an expensive stand-off with Proctor & Gamble over advertising rates. The company has few advertisements airing on RTÉ right now and the State-owned broadcaster is believed to have lost €6 million of revenue because of the row.

While the income side is not too encouraging the station has managed to trim its expenditure.