Political TV stations lose Lm3.4m in eight years

Political radio and television stations have been running at a huge loss for a number of years despite their claims that run on commercial basis, unpublished parts of a Broadcasting Authority report show.

The business study on national radio and television services, drawn up for the BA by Grand Thornton, revealed that Media Link and One Productions lost Lm3.4 million in eight years.

"During the eight-year period reviewed, Media Link lost almost Lm1.9 million, an average of Lm233,000 per annum and never made a profit or came close to breaking even during the period. Likewise, One Productions lost Lm1.5 million (before other income) during the eight-year period, an average loss of Lm190,000 per annum," the report states.

"The financial performance of both stations deteriorated considerably during the period 1998 to 1999. One Productions continued on this decline during 2000-2002 and registered its highest ever loss of Lm377,000 in 2002. Media Link appears to have achieved some turnaround and cut losses from Lm351,000 in 1999 to Lm195,000 in 2002."

With regard to the Public Broadcasting Services television and radio stations, information on which was not concealed in the report, it transpired that without an injection from the government and without the income made from licences, "PBS would have lost almost Lm19 million in eight years, an average of Lm2.4 million per annum. The trend line further shows that the situation has worsened rather than improved over time".

The report also notes that the public station's production costs rose considerably despite the increased number of programmes being farmed out to third parties as opposed to being produced in house.

Both the political stations and PBS achieved a much higher increase in turnover with time but their costs increased at a faster rate and they incurred even greater losses.

Contrary to PBS and the political stations, commercial stations have shown a marked improvement over time, even though the only profitable station was Bay Radio, followed by Capital Radio which broke even. All other stations made losses before non-advertising income.

Compared to PBS and the political stations, which have a similar cost structure, the total cost of salaries is much higher in commercial stations, averaging 47 per cent of total cost as opposed to 36 per cent in the case of political and public stations.