Thank you very much. I really appreciate the opportunity.
The second area I wish to cover is Ryan Tubridy's contract negotiations for 2020 to 2025 up to the end of March 2020 when I left the organisation. My recollection of Mr. Tubridy’s contract for the period 2015 to 2020 is that it was for a five-year period, 2015 to August 2020. Service fees were stepped over the term. As an example, there were higher fees in later years compared to earlier years. The contract included an exit payment of €120,000 to be paid at the end of the contract in 2020 if the presenter remained at RTÉ for the full five-year period of his contract.
The financial objectives for the 2020 to 2025 contract negotiations with Mr. Tubridy were: to reduce the annual service fees by at least 15% per annum and the overall cost of the contract; to negotiate out the €120,000 exit fee owing under the 2015 to 2020 contract, which would represent a material saving to RTÉ; and to start the contract on 1 Jan 2020 instead of August 2020 so that the cost savings would start earlier.
In autumn 2019, a contract renewal proposal was developed between the director general, CFO, head of content and the RTÉ solicitor. I do not recall the level of annual service fees we agreed to offer to the agent at that time. I do recall that the proposed offer, if agreed, would deliver significant cost reductions to RTÉ of more than €500,000 over the contract term. This included the waiver of the €120,000 exit fee in the existing contract. The head of news and current affairs was not involved in Mr. Tubridy’s contract negotiations.
During autumn 2019, I, as CFO, and the RTÉ solicitor managed the negotiation process and made financial offers to the agent. These offers were rejected and negotiations came to a stalemate position in November and December 2019. I was aware that the head of content was in contact with the agent outside of the normal process to try to find a solution during this period, as he told me so. The negotiation meetings and offers made were documented by me and the RTÉ solicitor by email. The director general and the head of content were updated on the negotiations at every stage by me and the RTÉ solicitor.
I was advised by either the director or the head of content - I cannot recall which one - that a separate commercial arrangement had been proposed to be added to the financial offer then on the table. My recollection is that this was in December 2019. This commercial arrangement between Mr. Tubridy and a commercial partner, which was later identified to me as Renault, was to be facilitated by RTÉ. The proposal was that Mr. Tubridy would host a number of events for Renault and would be paid a fee by Renault for these services. In this proposal, RTÉ was not to be party to the contract, nor was RTÉ liable for any element or obligation under the contract. There was no cost to RTÉ in this proposed arrangement. I was requested by either the director general or the head of content - I cannot recall which one - to write to Mr. Tubridy’s agent advising him of a potential commercial arrangement to be facilitated by RTÉ and I did so.
I spoke to the head of commercial and briefed her as she had the relationship with Renault and would make the necessary introductions. The head of commercial told me she spoke to Renault about a one-year deal with a possible extension for a further two years. My recollection is that the head of commercial advised me that Renault was happy for Mr. Tubridy to host events and saw value in this proposal.
As far as I can recollect, in early 2020, the head of commercial advised me that as Renault had already agreed cost budgets for 2020, the arrangement would need to be cost neutral for Renault in the first year. This gave rise to a potential rebate to Renault and this potential rebate to Renault was known to me, the RTÉ solicitor, director general and head of content. I understood this rebate, if agreed, would be assigned to Mr. Tubridy’s RTÉ earnings for 2020. There was never any suggestion otherwise.
My recollection is that Mr. Tubridy’s agent requested that the commercial agreement be underwritten by RTÉ and this was refused. This continued to be my position and, as far as I am aware, that of the director general, head of content and the RTÉ solicitor, up to the date of my departure from RTÉ in March 2020. I was not aware that any guarantee had issued until I heard about it last week in media reports.
As part of the negotiation with Mr. Tubridy, RTÉ proposed the exit fee of €120,000 in the 2015 to 2020 contract be waived by Mr. Tubridy. Following discussions with both the RTÉ group financial controller and the RTÉ people payments manager, I contacted RTÉ’s auditors, Deloitte, to consider options as to how the cancellation of the €120,000 exit fee could be treated for top talent earnings reporting, if Mr. Tubridy waived his entitlement to that payment. Some preliminary modelling of this option was done and discussed fully with the auditors. However, this was not concluded when I left, and I do not know if the exit fee was waived and, if so, how it was treated in the top talent reported earnings. Throughout the period January to March 2020, I briefed the new CFO on all aspects of Mr. Tubridy’s negotiations as they progressed.
After I left RTÉ in March 2020, I had no further involvement in the negotiation of Mr. Tubridy’s contract nor was I contacted by anyone from RTÉ on any aspect of the negotiation or on any commercial agreement or on the earnings treatment of the exit fee waiver. When I left in March 2020, an RTÉ guarantee on the proposed Renault agreement was not on offer, as far as I was aware.
The third area I would like to mention is the top talent earnings disclosure process during my tenure as CFO. The responsibility for the final calculations and ensuring external audit sign-off of the top talent earnings figures to be released was my responsibility as CFO for the years up to and including 2016. Top talent earnings were reported on an accruals basis; that means amounts paid and payable for the period.
As CFO, I maintained documentation on top talent earnings by presenters, which showed published audited earnings from 2008, draft calculations for periods yet to be published and draft projected earnings for future periods based on known contracts. I regularly communicated with, and met, the people payments manager and group financial controller on talent earning calculations and payments under the various contracts. This was a key control in the process.
As part of the finalisation of top talent earnings calculations for the year, another key control in the process was meeting with the people payments manager and the group financial controller to compare the actual payments made to each top talent in the year to the expected earnings for that year as projected by the CFO. Occasionally, differences could arise where presenters were paid by RTÉ for additional services provided and not included in the main services contract.
In such cases, these additional earnings were added to the main services contract earnings to give the reported earnings. Once the draft top talent earnings were prepared by the CFO and agreed with the people payments manager and the group financial controller, the group financial controller engaged with RTÉ’s external auditors to audit the earnings before they were reported. The audit of the top talent earnings by RTÉ’s external auditors was a key part in the overall process to ensure the accuracy of the reported earnings before release and to ensure consistency of reporting with prior years. When I left RTÉ in March 2020, the earnings for 2017 and 2018 had been audited by RTÉ’s external auditors. Before I left RTÉ in March 2020, I fully briefed the new CFO on all aspects of the top talent contracts and their status. As part of this hand-over to the new CFO, it is my recollection that I provided all documentation relating to top talent earnings.
On top talent earnings disclosures in the years 2017 to 2021, top talent earnings are typically released two to three years in arrears for commercial sensitivity reasons. On top talent earnings disclosures for the years 2017 through 2021, here are the timelines. For the year 2017 they were released on 20 January 2021; for the year 2018 on 20 January 2021; for the year 2019 on 20 January 2021; for the year 2020 on 15 February 2023; and for the year 2021 on 15 February 2023. These release dates, which I located on the web, are all after I left RTÉ, and I was not involved in the above reporting process for these years.
I will address the barter trading account on the basis of my recollections. Barter trading is a standard industry mechanism for selling surplus advertising air time which a broadcaster cannot sell itself. Rather than surplus advertising time expiring and going to waste, RTÉ engaged a UK barter agent Astus whose business is to deliver value through the media buying process in order to generate additional commercial revenue. Astus were allocated RTÉ surplus air time to sell. Astus gave RTÉ 50% value in cash and the remaining 50% provided goods and services to RTÉ and also covered the barter agent’s fees. The barter agent’s fees covered both the selling of the air time to customers and the procurement of requested goods and services. I cannot recall the barter agent's fee level. The services provided to RTÉ through barter trading are typically hotels, airlines and air time with other media organisations. The cost of services provided through barter was charged to the RTÉ department cost centre who used the services, flights, hotels, etc. The cost of the bartered services was covered by the relevant department’s existing budget. Bartered services were not in addition to existing budgets. That is my recollection.
RTÉ finance had financial control of the barter account and received regular statements from the barter company. Operational control of the barter account was with the RTÉ commercial department. Both income and expenditure from barter trading was recorded in the RTÉ accounts and was accounted for each month. Any expense discharged from the barter account was documented and every expense met from the barter account was accounted for within RTÉ in the same manner as if it had been paid for in cash. It is my recollection that during my tenure as CFO, the annual value of bartered air time at RTÉ amounted to approximately €300,000 per annum out of total commercial income of €180 million per annum. Of the approximate €300,000, 50% was paid in cash, the remaining 50% was used to provide services to RTÉ which it would be buying anyway, and pay barter agent’s fees. This was all funded by surplus air time RTÉ was unable to sell. I thank the committee for its time.
