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RTE The existence of two other has been disclosed’barter” account has been used to finance €1.6 million in customer entertainment and corporate hospitality over the past 10 years.
in a Note to the Media Committee of the Irish Parliament Late Tuesday, the broadcaster defended the use of its account, including hospitality purposes.
“This is perfectly legal,” RTÉ wrote. “Additionally, the model is commonly used by competitors and is an industry-wide standard”.
However, the company could face further scrutiny over stark discrepancies between what was presented to the Public Accounts Committee (PAC) last week and what was shown in documents sent on Tuesday night.
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A barter account is an account linked to a system by which TV stations use advertising space to pay for certain goods and services.
The barter account system first came to public attention when RTÉ used the barter account system to make a hidden €150,000 payment to its most high-profile presenter, former late-night show host Ryan Tubridy.
According to the documents, there were three barter accounts: Astus – used to make payments to Mr Tubridy – Active and Miroma.
Last week, RTÉ’s chief financial officer, Richard Collins, told the PAC that “there is only one barter account”. Until recently, the barter account used to make payments to Mr. Tubridy was under the control of RTÉ’s finance department.
When asked how much money had been transferred to the barter account, RTÉ told the committee that the amount had ranged between €1 million and €1.25 million over the past 10 years, and provided examples of customer entertainment spending – including rugby in 2019 A trip to the World Cup, tickets to the Champions League final and 10 years of tickets to IRFU.
However, a note to the parliamentary media committee detailed that “approximately €1.6 million of barter account revenue was spent on client entertainment and corporate hospitality”.
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RTÉ stated in its description that the barter mechanism generates advertising revenue through barter agencies.
“This is additional revenue from multiple advertisers that RTÉ might not have been able to acquire without the barter mechanism,” it said.
“It is worth noting that the use of barter accounts is common in the advertising industry. RTÉ only uses them in commercial activities that sell advertising airtime.”
It outlines how the broadcaster spent around €150,000 per year on client entertainment and hospitality through barter accounts between 2012 and 2022, while RTÉ generated an average commercial revenue of €150 million per year.
Clients said to have spent €111,000 on a Rugby World Cup trip in 2019 and €38 million on RTÉ in 2018.
Between 2012 and 2022, RTÉ is said to have earned more than €8 million from barter agencies, ultimately generating an additional €5.6 million in additional revenue.
The mechanism is based on the fact that 50% of the booking fee is paid through advertising space and 50% is paid through points or services that the advertiser can offer. RTÉ can utilize points or cash out, in which case an administration fee will apply. It provides an example of using a hotel room, with transactions priced at 65% of face value, allowing for discounts and fees charged by barter companies.
“Its use has proven to be a necessary flexible business practice for RTÉ’s commercial sales team. It does not in any way affect license fee income, nor does it in any way derive any client reception from license fee income /Entertainment expenses. Such expenses are derived solely from business income.”
It argues that clients working through barter accounts generally do not conduct business transactions with RTÉ outside the model. “Therefore, this income is in addition to income received through traditional means and would not otherwise have been received.”
The paper concludes: “As RTÉ continues to be largely funded by commercial revenues, the use of barter accounts for client entertainment/hospitality purposes is appropriate, following standard practice in the advertising industry, insofar as is insignificant: the disbursement is in no way out of license fee funds compared to the revenue earned. It appears on RTÉ’s balance sheet and appropriate controls are in place in terms of oversight and disbursement.”
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