President Kuchma forced to order UT-1, 2 debt restructuring to keep government's media mouthpieces on air
leading President Leonid Kuchma to order that the debts be restructured to keep the government’s main media mouthpieces on the air.
The Radio and Television Broadcasting Concern (RTBC) – a state institution that transmits TV and radio signals over the country – said last week the Ukrainian National Television Company accumulated some Hr 140 million in debts to the RTBC over the past five years.
The RTBC’s president, Valery Yurchenko, said the debts would force his agency to cut off UT-2 as of Oct. 2 and UT-1 as of Oct. 12 if the debts were not paid. He said the RTBC had been unable to pay off its own debts, primarily Hr 30 million in taxes and Hr 20 million in electricity bills.
Vadym Dolhanov, president of the National Television Company (NTC), which produces programs broadcast on UT-1 and UT-2, struck back, saying Yurchenko refused to compromise.
“[Yurchenko] has issued an absolutely irresponsible order,” Dolhanov said in an interview on the Studio 1+1 commercial TV channel last week. “There is a paradoxical situation of one state structure being unable to agree with another state structure.”
However, UT-2 continued broadcasting this week and government officials overseeing the media sector said Kuchma’s debt-restructuring order would help stop the conflict between the two state agencies.
“Obviously, [UT-2] won’t go off the air now that the president has issued an order,” said Ivan Lozovy, spokesman for the State Committee for Television, Radio and Information Policy, the government institution under which both the RTBC and the NTC are directly subject to. “Part of the debt will be written off, part of it will be covered from the budget, and part will be restructured.”
Both the RTBC and the committee say the NTC has repeatedly refused in the past to respond to their requests to settle its debt problems quietly.
“They simply refused to respond to us or to provide us with information,” Lozovy said.
Lozovy said that the important thing now is to get a hold of the situation so that the debts stop piling up. He added one of the ways to ensure fiscal responsibility at the NTC was by changing its management.
“Something is definitely wrong when a state company is not able to pay its bills while private TV companies are able to generate enough revenue via ads to pay their bills,” he said.
“If the NTC can’t pay its bills on time, then there should be changes in its leadership.”
While the State Committee on Television, Radio and Information Policy is authorized to appoint new leadership at NTC, Lozovy said that there was no clear legal framework for such a move and that Kuchma should ultimately make the change.
The NTC annually receives about Hr 30 million in state subsidies. Its annual ad revenues in the last several years were $11.5 million.
In comparison, Ukraine’s two largest commercial channels – Inter and 1+1 – bring in $40 million to $50 million a year in ad revenues, according to AGB Ukraine, which monitors the media advertising market.
