RTÉ financial crisis: Kevin Bakhurst says broadcaster will be insolvent without bailout of tens of millions

RTÉ is before the Public Accounts Committee (PAC) this morning being questioned by TDs on spending by the national broadcaster.

The meeting comes as the Dáil’s public spending watchdog continues its examination of RTÉ's finances in the wake of the huge controversy over secret payments to former Late Late Show host Ryan Tubridy and separate corporate hospitality spending.

RTÉ director general Kevin Bakhurst is appearing at the committee and Katherine Licken – the secretary general of the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media – is also attending.

Stay tuned to this live blog for updates throughout the morning.

The committee was told there has been a “significant rewriting” of the terms of reference for the remuneration committee of the board, which now reports to the board after every meeting.

The meeting returned yet again to RTÉ's refusal to waive its privilege over the minute of the vital meeting, with Ms Mullooly telling Fine Gael’s TD for Cork North, Colm Burke, that the risk of doing so to the organisation would be “fundamental”.

“It is a risk in terms of how we do business,” she said, adding the RTÉ solicitor advice is given confidentially, including on editorial matters, she said, describing how Prime Time, for example, would seek advice from the office on programme matters. “It is really important that they are kept confidential”.

Cormac Devlin, Fianna Fáil TD for Dún Laoghaire, was told the investigations ongoing into RTÉ are costing the broadcaster about €250,000 per month. Mr Bakhurst said he has had contact with Rory Coveney and Geraldine O’Leary, senior executives who had resigned or retired following the controversy, but had not heard from Dee Forbes since he took up his role.

Several members of the committee sought more information about the nature of severance schemes that ran at RTÉ in 2017 and 2021, including the scheme that former CFO Breda O’Keeffe left under.

Head of HR Eimear Cusack told the committee that under the 2021 scheme, a role had to be fully “suppressed” for a person to become eligible for a severance package. She also indicated that packages could be offered when a role was replaced with an 80 per cent cost saving.

Mr Bakhurst was asked if monies would be paid out if they had been given to someone who didn’t qualify. He referred to a review that is ongoing of the exit schemes, saying: “What I’ve asked the review [to do] is to set out the facts and once we have the facts we’ll look at all the options we have available to us.”

The committee was told that year-on-year, licence fee income was down 39 per cent.

There were testy exchanges between Labour’s Alan Kelly and Mr Bakhurst, with the Tipperary TD taking exception to RTÉ's indication that it was prepared to fight the PAC over the key note of the May 7th meeting where the undertaking is alleged to have been given.

“This is a pivotal moment for you,” Kelly told the director general, describing Mr Bakhurst’s language when he told PAC that RTÉ stands ready for any attempt to compel the document as “too confrontational”. Mr Kelly also objected strongly to the suggestion the PAC would share its legal advice on the matter with RTÉ.

“This isn’t a two relationship ... it’s not a two-way relationship as regards you get to see our legal advice. This is the Oireachtas.”

He said he believed Mr Bakhurst was doing a good job but that if a legal row broke out over the document, “your position won’t be tenable”.

Mr Bakhurst said that he had a responsibility to lead RTÉ and to “maintain the integrity of this organisation and its independence going forward,” saying the broadcaster’s refusal to hand over the note was a “point of principle”.

Later, Mr Bakhurst said RTÉ does not dispute the version of the meeting outlined by Noel Kelly, who attended it on behalf of Ryan Tubridy. He pointed out Ms Forbes had been presented with that version during the initial Grant Thornton review that was published in June and did not raise concerns as to its accuracy.

Mr Kelly also asked for a range of information, including the precise manner in which the department and Minister Catherine Martin were informed about key moments in the controversy, including Ms Forbes’s resignation and the emergence of the payments to Mr Tubridy.

He also asked that Mr Bakhurst write to all employees of RTÉ and ask that they confirm they had not received any gifts since 2017, which the broadcaster had previously indicated. Expressing scepticism over the idea no gifts have been received, Mr Kelly said that was “beyond comprehension”.

Under questioning from Catherine Murphy, the Social Democrats TD for Kildare North, Adrian Lynch said that despite the discussion of a guarantee for Mr Tubridy that RTÉ would backstop payments under the tripartite agreement during contract negotiations, no undertaking to do so came into being until Ms Forbes gave the verbal commitment to do so on May 7th.

Ms Murphy pointed out that the then chief financial officer, Breda O’Keeffe, had committed to do so in an email on February 20th, and that Ms Forbes sent a letter agreeing to the proposal in March. But Mr Lynch insisted: “That guarantee is not provided ... that was not given until the moment of May 7th”.

“It’s an ongoing negotiation, the CFO is leading that negotiation,” he said of the exchanges.

The committee is also seeking access to a report on RTÉ's finances by New Era, done for Minister for Finance Michael McGrath, which suggests a new funding shortfall of €61 million at the broadcaster, €40 million of which should be met by the taxpayer.

Imelda Munster, the Sinn Féin TD for Louth, was told RTÉ has made a provision of “under €20 million” for ongoing costs arising from cases of alleged bogus self employment – the first time the broadcaster has been this precise about the potential costs.

Mike Fives, the station’s financial controller, said this money would also have to come from the broadcaster’s cash pile of €68 million if it had to pay out on the claims.

RTÉ has also refused to provide any detail relating to the resignation of former chief financial officer Richard Collins, whose departure from the broadcaster was announced on Wednesday.

Kevin Bakhurst told Fine Gael TD Alan Dillon that they were precluded from discussing individuals.

Fianna Fáil’s Paul McAuliffe pressed both Mr Bakhurst and Head of Legal Paula Mullooly on financial governance – specifically whether any side letters or tripartite agreements would be reviewed by the Interim Management Team (IMT) that has taken up executive responsibilities for running the organisation.

He was told none exist – but if they were to occur again, they would go to the IMT for review as they would be classified as part of presenter agreements.

The committee also sought more information about oversight and sign-off procedures for credit notes, and was told there is now a requirement that they are signed off by two senior executive.

RTÉ made a point that it has made previously about Dee Forbes and her authority to sign off on the controversial deal. Despite the fallout, the committee was told again that giving the indemnity was within Ms Forbes’s prerogative as DG. It was, Ms Mullooly said, “entirely within her remit in the office of the director general”.

Committee chairman Brian Stanley raises the issue of the notes from the meeting of May 7th, 2020, between Ryan Tubridy’s agent, Noel Kelly; former director general Dee Forbes; and a legal representative for RTÉ with Bakhurst.

Mr Stanley says the PAC – which has been seeking the notes – was first told it was “legally privileged” and later that it comes under “client confidentiality, in other words legal advice from a solicitor”.

“The committee feel there’s obviously an importance to this, particularly in the absence of Ms Dee Forbes being able to attend here because she was one of the people at that meeting.”

He says Mr Kelly has given his version of what happened and he “confirmed that Dee Forbes on behalf of RTÉ in consideration of the new agreement RTÉ guaranteed payments required to be made by Renault under the tripartite agreement and indemnifies Tuttle Productions [that’s Ryan Tubridy’s company] in relation to these payments for the duration of the contract”.

Mr Stanley said the committee is “not happy” and he told Mr Bakhurst that if RTÉ is still claiming client confidentiality over the notes “you do have the right to waive that”.

Mr Bakhurst said the matter had been “carefully considered and “you’ll appreciate RTÉ has taken external legal advice on this”.

He said RTÉ does want to provide transparency and has provided hundreds of documents, almost everything the committee has asked for.

He added: “We would also like to hear from Dee Forbes and look forward to her appearing at this committee and if she doesn’t appear here maybe she could answer a question in writing to you I’d like to suggest.”

Mr Bakhurst also said: “On this document specifically there is a really important issue at play here – and I’m not trying to hide behind legal advice – but you will appreciate as a responsible organisation if we had taken legal advice about what we can and can’t and should disclose, it would be remiss of us to act against that legal advice.”

He added: “I want to provide maximum transparency except where there are legal constraints.”

Mr Stanley said the committee will be moving to seek to compel the document.

The committee has started at a breakneck pace, with Independent TD for Wexford Verona Murphy drilling into the finances of the broadcaster. The headline is that Kevin Bakhurst has said without a bailout of tens of millions of euro by next spring, RTÉ will be insolvent.

The broadcaster has €68 million on hand, the committee heard, but is burning through cash while licence fee income craters.

For context, RTÉ spent €339 million in 2022 and expects to spend €350 million this year. It expects to have a deficit of €10 million to €12 million by the end of the year, which it can cover with cash on hand.

It also has around €35 million borrowing capacity out of a total of €100 million debt facility, but since the payments controversy broke, licence fee income is down €21 million in the year to date.

Murphy suggested when added to usual “non payments”, this amounts to €86 million, which Bakhurst did not disagree with.

He said the broadcaster will need the cash bailout – presumably the €40 million the Government has been told to give RTÉ – by the spring. “If we didn’t get this cash, we would run out of cash, that’s for sure,” he said.

He also said RTÉ has not received the €150,000 back from Ryan Tubridy. The presenter indicated he would consider giving this back earlier this year, before talks to bring him back collapsed.

During testy exchanges with Ms Murphy, he also reasserted legal privilege over a vital meeting note detailing the key moment Dee Forbes allegedly agreed to backstop fees due to Mr Tubridy under the infamous tripartite agreement.

“The independent reviews commissioned by Minister Martin are intended provide an external assessment and set of recommendations that will address the serious issues that have arisen in RTÉ,” Licken says.

“In so doing, they will be critical to restoring public faith and trust in RTÉ.”

Katherine Licken, the secretary general for the Department of Media, tells the committee that Minister for Media Catherine Martin has commissioned an independent examination of RTÉ.

It includes two separate and parallel reviews of governance and culture and of contractor fees, human resources and other matters as well as an investigation by a forensic accountant, Mazars.

A Review of Governance and Culture is being overseen by a three-person Expert Advisory Committee, chaired by Prof Niamh Brennan.

Its purpose is to assess whether RTÉ's governance framework and organisational culture is fit for purpose and is in line with best practice.

Licken says that, similarly, the Review of Contractor Fees, HR and Other Matters is overseen by a three-person Expert Advisory Committee, chaired by Brendan McGinty.

“This review is examining the oversight and mechanisms by which RTÉ engages presenters and contractors, issues arising from the use of short-term employment contract at all levels, and employment terms and conditions.”

Licken says she understands that both Expert Advisory Committees “have been making good progress and that RTÉ has been co-operating with information requests made to date”.

On the possible sale of the RTÉ complex, Bakhurst says: “A strategic change of this scale requires considerable levels of financial modelling and deliberation; among the elements being explored is the sale of more of the campus – an issue that I know several of you have expressed an interest in.

“We are awaiting more up-to-date valuations, but early indications are that a complete sale of the Donnybrook campus is unlikely, and the repurposing of the current site will not be without challenges and significant costs.”

He concludes his statement saying: “We must rebuild an RTÉ that is trusted and enjoyed, one that’s relevant and loved, and one that brings the country together for important national moments and events.

“Public service content, value for money, and trust will be at the heart of a transformed RTÉ, and I and my team are committed to the work required to deliver that.”

Bakhurst says RTÉ is grateful it has been confirmed that the broadcaster will be receiving €16m from Budget 2024.

“This follows on from the recommendation made by the Future of Media Commission that interim funding would be required pending a proper reform of the licence fee, and we would extend thanks to the various members of the Houses of the Oireachtas who have publicly supported the importance of public service media being properly supported.”

He commends staff at RTÉ “for continuing to deliver high-quality programmes and content to very large audiences”.

He notes: “News coverage, investigative journalism, live sport such as the Rugby World Cup, record numbers using the RTÉ Player and the highly successful new season of the Late Late Show with Patrick Kielty.”

He says: “I am determined that RTÉ will be transformed so that the public, Government and our partners can have full confidence in RTÉ, and its management.”

Bakhurst refers to the news that Richard Collins has resigned as chief financial officer.

He says: “Due to various legal restrictions, I am not in a position to comment further on that matter, but I can assure you that I will be moving to advertise for the role of CFO as soon as possible.

“This will be a priority appointment for the permanent leadership team, alongside the appointment of a new Commercial Director.”

Bakhurst says: “We are managing our finances carefully and working to cut costs in the face of declining revenue from the TV Licence.

“Recent initiatives such as the freeze on recruitment of staff and stopping discretionary spending, alongside deferring some investment in digital and capital projects has saved several million Euro.

“And RTÉ's commercial performance has been good.

“While cash reserves are solid for the short-term, clearly long-lasting reform of the broken funding system is urgently needed.

“RTÉ is committed to the many reviews in place.”

The committee chairman, Sinn Féin TD Brian Stanley, has kicked off proceedings saying the TDs intend to examine matters arising from previous meetings with RTÉ and documents the broadcaster has sent the PAC, and he introduced the witnesses.

He says former senior RTÉ officials Breda O’Keeffe and Geraldine O’Leary declined to attend the meeting while former director general Dee Forbes is unable to attend.

Kevin Bakhurst reads out his opening statement.

He tells TDs:

“Recent events have marked a turning point in RTÉ with regard to our standards of governance.

“We have seen how easily trust can be shaken, and we understand the urgency of the job to restore that trust.

“Since I took office in mid-July, both I and the new leadership team, working with staff across the organisation, have been working to do all that we can to expedite the urgent reforms required to restore confidence in RTÉ.”

He says: “We are working at pace to deliver RTÉ's strategic framework plan to Government by the end of the month.

“That outline plan will form the basis for consultation with the public, with public representatives, and with staff.

“It will set out the stall for a better RTÉ: better for audiences, and better for Ireland.”

Speaking this morning, the chairman of the Oireachtas Public Accounts Committee, Brian Stanley, said that if RTÉ representatives do not provide notes from a meeting between Ryan Tubridy’s agent. Noel Kelly; former director general Dee Forbes; and a legal representative for RTÉ, then the PAC will seek authorisation from the Oireachtas to compel the documents be provided.

Mr Stanley told RTÉ Radio’s Morning Ireland that client confidentiality could be waived and the documents provided. The notes from that meeting were vital to understand the exact details of the deal reached for Mr Tubridy’s pay. How the terms were “solidified” and how it was “signed off on”.

If the PAC decides to compel RTÉ to produce the notes from that meeting the committee will have to make a request to the Committee for Procedural Privileges, he explained.

Transparency by RTÉ was important, added Mr Stanley. The public will need to know that “things will be done differently” on issues such as pay for RTÉ executives, exit packages and voluntary exit packages along with the station’s dealings with agents.

There was also the “whole breakdown in corporate governance” and RTÉ board appointments along with the “misclassification” of workers, he added.

The PAC’s priority was to secure the future of public sector broadcasting and the 1,800 jobs at RTÉ, he said. It was important for the committee to ensure there was transparency over how public funds were being spent. – Vivienne Clarke