Cash-strapped TV stations paying their broadcasting licences in instalments

The Broadcasting Authority has confirmed that most national broadcasting stations are facing cash flow problems and that this has led to stations falling behind in their licence payments.

Different licence fees apply for different broadcasting services which are payable to the authority.

It is a well-known secret that most privately-owned television channels, including the political party stations, are in a dire financial situation, and not in a position to pay their television licences to the BA.

At present, there are five major nationwide television channels in Malta: the state-owned TVM, the Labour Party's One Television, the Nationalist Party-owned Net Television and two privately owned stations (Smash Television and Favourite Channel).

MaltaToday is informed that both political party stations have not honoured their licence payments for years, but the Broadcasting Authority has failed to reveal stations have not paid their licences, claiming commercial sensitivity.

While One Television chairman Jason Micallef told MaltaToday that "everything is in order" with the authority over licence payments, Net Television failed to answer MaltaToday's questions by the time of going to print.

The annual fee for a terrestrial local television station stands at €13,976 per annum while the fee for national radio stations is €11,646.

Licence fees are due on the day of issue of the licence and subsequently on the same day each year. Licensees are normally issued for a term ranging between three to eight years.

The authority told MaltaToday that "over the years, the Authority has taken cognisance of the fact that most national broadcasting stations face cash flow problems - from time to time situations have arisen on certain occasions where stations have fallen behind in their payments."

A BA spokesperson added that when this happened, the authority took all the steps necessary to ensure that all licence fees were duly paid and an agreement was reached with the defaulting stations to have a repayment programme in place. 

Failure to honour repayment agreements would effectively lead the authority to take legal measures at its disposal to ensure that the dues are collected. Such measures include garnishee orders.

The authority explained that these agreements arise out of cash-flow problems of the television and radio stations (all of which are commercial entities) and "the information being requested becomes commercially sensitive and the Authority feels that it is should not divulge the name of the broadcasting stations involved".

"The overwhelming majority of stations (including community and foreign satellite television stations licensed under the Broadcasting Act) all pay their licence fees by the due date".

One TV chairman Jason Micallef insisted that that the station has no dispute over licences with BA and explained that the station makes "normal payments" to the authority.

He however refrained from revealing details of these payments but admitted that all stations face cash flow problems due to the "exorbitant costs the stations have been loaded with in the last couple of years".

Micallef said that apart from the terrestrial television licence, the station pays the digital platform and radio station licences.

The private television stations have to compete against the State-funded TVM. In 2010 the station received €1.1 million in State funds, although the actual expenditure stood at €2,720,999.

TVM and its main competitors - One Television and Net Television - share a very limited advertising pool and given the size of the market, other sources of income are restricted.

The situation in Malta is unique, with both major political parties owning television and radio stations apart from a number of printed and online newspapers, hence owning and controlling the majority of the media.

Soaring costs and the limited income has fuelled calls for both political parties to close down their television stations. In the advent of internet and new social media, the party stations - established in the 90s to convey the political message to a wider audience - the stations have become more of a burden than an asset.

Although the stations still play a pivotal part - especially during electoral campaigns - they have drained the parties' finances and are clearly unsustainable.