TV3 HAS SAID it is considering pursuing RTÉ for significant damages after the national broadcaster confirmed it would be scrapping its ”share deal” advertising sales model.
The Competition Authority today wrote to TV3 saying RTÉ had agreed to change its TV advertising model, where it charged advertisers a higher rate if their spending with RTÉ fell below a certain threshold of their total TV advertising budget.
TV3′s chief executive David McRedmond said his station was losing advertising customers “virtually every day” as a result of RTÉ’s policy, which is now to be scrapped from July of next year.
TV3 believes it may have lost upwards of €30m as a result of the “share deal” scheme – and may seek damages against RTÉ to reclaim its losses.
McRedmond said a decision in that regard would be made after TV3 received a copy of the Competition Authority’s ‘Enforcement Decision’.
“We believe we have suffered very significant damages,” he said. “The Competition Authority are very clear that this practice is one that could not continue.
“We’ll be looking at what the possible options are for remedies – the reality is that we’d have to litigate,” he said, adding that TV3′s priority was to get the government and Broadcasting Authority of Ireland “stuck in to give RTÉ a clean bill of health”.
McRedmond also criticised RTÉ’s decision to delay the abolition of the scheme until July, commenting that “only RTÉ could abolish something nine months from now – that’s just nonsense.”
RTÉ, however, insisted that the Authority had not found its practice to be anti-competitive and said TV3 had tried to present “a voluntary and agreed position as a forcible outturn”.
“The Competition Authority has welcomed and agreed to RTÉ’s own planned actions in respect of its advertising trading system, including an extended period of the existing ‘share deal’ trading into mid-2012,” it said in a statement this evening.
It said the Authority’s ‘Enforcement Decision’ was a formal title for the outcome of its investigations, but not a decision “which seeks to enforce any ruling or finding against RTÉ.”
“The investigation initiated by TV3’s complaint has closed on amicable and agreed terms. RTÉ was happy to agree to change the way it traded. RTÉ ‘s willingness to do this was directly informed by its overall review of its airtime sales method.”
RTÉ’s head of TV sales Geraldine O’Leary said the ‘share deal’ had “served a purpose for both RTÉ and for clients and advertisers”.
“But the world has moved on and we are moving away from share-based deals. We will do so in mid-year when the systems are fully ready for us to make that change.
“The Competition Authority was very accommodating and agreed to our proposal to maintain this system until changes are in place as proposed by us next year. The TV3 statement is absolutely misleading.”
David Hayes of media agency MEC Ireland explained that RTÉ had introduced the deal when it lost its broadcasting monopoly in Ireland, in order to dissuade advertisers from ‘cherry-picking’ advertising at the most high-profile times of the day.
He said it would be difficult to put a value on the damages that other broadcasters may have lost as a result of the deal, but said that the Competition Authority’s decision appeared to be “opening the door for damages”.
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