At the ad hoc session held on 12 July 2013 the Parliament discussed the President’s veto and remarks on the draft Law on Broadcasting. One of the President’s remarks concerned the additional obligations put upon broadcasters. Specifically, broadcasters holding a General Broadcasting License were required to report the actives, passives and investments of the previous year by 1 May to the Regulatory Commission. The President maintained that the existing legislation and adopted amendments already provided for the transparency of the broadcasters’ activities and additional obligations would only put a heavy burden upon them.
This remark of the President was opposed by Tamar Kordzaia, Member of the Georgian Dream coalition and one of the authors of the draft law. The MP declared: “For the broadcasters to be truly free from political influence, their finances should be transparent. Accusing the current government, which fights for the transparency of the broadcasters, of having aspirations to gain influence upon broadcasters is rather cynical. In that case [of having such aspirations] we would have simply left the existing regulations unchanged. If you look into the declaration forms provided by the Communication Commission, you will see that in all broadcasters the revenues from ‘other sources,’ which are not specified, are much larger than the revenues coming from advertising or other transparent sources.”
We inquired whether or not in the financial reports presented by the broadcasters the revenues from ‘other sources’ had indeed exceeded the revenues from advertising or other transparent sources.FactCheck
requested from the National Communication Commission the documentation depicting broadcasters’ incomes in 2012. The Commission provided information on 44 private broadcasters (the entities of the Public Broadcaster were not part of our research as they are being financed from the state budget). The following sources of income are listed in the document provided by the Communication Commission: sponsorship, donations, teleshopping and advertising. The term ‘other sources’ is not present in the list. With regard to this matter a representative of the Communication Commission informed us that the revenues from so-called ‘other sources’ are equal to the difference between the broadcaster’s total revenue and the listed incomes (sponsorship, donations, teleshopping, advertising). As noted above, 44 private broadcasters were functioning in Georgia in 2012 (broadcasters are considered to be functioning if their revenue in 2012 was higher than zero). This article will discuss in detail the revenues of five major broadcasters of Georgia whereas summarised statistical data will be presented on the rest of the broadcasters (see the indicated link for the information on the revenues of all 44 broadcasters). The five major broadcasters chosen by us are: Rustavi 2, Imedi, Maestro, Kavkasia and TV 9. While looking at the incomes of broadcasters from different sources we will focus upon comparing the revenues from ‘other sources’ to the advertising revenues as advertising – and not sponsorship, donations or teleshopping – is precisely the chief source of income for every broadcaster.
In 2012 the revenue of Rustavi 2 amounted to GEL 30,723,755. Of this amount, GEL 3,969,052 was acquired through sponsorship whereas GEL 25,060,345 came from advertising. Additionally, GEL 1,694,358 of Rustavi 2’s revenues came from other undefined sources which does not exceed the revenue coming from any other defined source.
The total revenue of Imedi in 2012 was GEL 21,383,405. GEL 2,513,974 was received through sponsorship, GEL 61,770 through teleshopping and GEL 18,636,662 through advertising whereas the income from unspecified sources amounted to GEL 170,999. Evidently, in this case also, the revenue acquired through ‘other sources’ is lower than the revenue coming from advertising. The share of ‘other sources’ is also greatly surpassed by the revenues coming from sponsorship.
TV broadcaster Maestro had an income of GEL 3,375,654 in 2012. As stated in the document provided by the Communication Commission, this total revenue has been generated solely by advertising.
The total income of Kavkasia in 2012 was GEL 1,171,136 with GEL 21,256 having been generated by means of teleshopping, GEL 837,381 by means of advertising and an additional GEL 312,499 as unspecified. In the case of Kavkasia as well, the income from ‘other sources’ does not exceed the sum acquired through advertising although it does constitute a fairly big part of the total revenue.
TV 9 received GEL 825,306 in revenues in 2012 among which GEL 822,391 was acquired through advertising and ‘other sources’ adding GEL 2,915 to the broadcaster’s total income.
As for the rest of the 39 broadcasters, which we have not discussed above, only six of them received higher revenues from undefined sources than from advertising. These broadcasters are: Global Media Group, GMC, TV 5, Gorda, Evrika and Mega. It is to be noted that although the revenues from ‘other sources’ in the broadcasters Mze and Imervizia do not exceed the advertising revenues, the income from unspecified sources is quite large and amounts to nearly half of the total.In order to get a bigger picture of the matter we studied the revenues of TV broadcasters in the first five months of 2013. Indicated statistical data has been retrieved from the research carried out by Transparency International
which is also based upon the information requested from the Communication Commission.
In the period between January and May of 2013 the total income of Rustavi 2 amounted to GEL 12,262,925. Of this, GEL 9,609,830 was generated by means of advertising, GEL 2,451,595 by means of sponsorship, GEL 107,964 through selling broadcasting time, GEL 90,792 through technical services and GEL 2,736 from ‘other sources.’
Imedi had a revenue of GEL 6,153,138 in the indicated period. The share of advertising in the total amounted to GEL 4,800,061 with GEL 1,332,738 having been acquired through sponsorship and GEL 32,541 through selling broadcasting time. As for the ‘other sources,’ they are not mentioned in the research and cannot be found through calculation.
The total revenue of the TV broadcaster Maestro amounted to GEL 1,345,954 in the first five months of 2013. The company received GEL 1,102,235 by means of advertising and GEL 243,719 from other sources.
TV broadcaster Kavkasia’s total income in the period between January and May of 2013 amounted to GEL 256,111 with GEL 136,373 having come from advertising, GEL 2,796 from teleshopping and GEL 7,627 from selling broadcasting time whereas GEL 104,722 came from ‘other sources.’
TV 9 had a total revenue of GEL 379,333 in the five months between January and May of 2013. The company received GEL 312,827 from advertising, GEL 65,755 from technical services and GEL 387 from ‘other sources.’
Having analysed the revenues of the broadcasting companies in the period between January and May 2013, we found that in none of the five chief broadcasters did revenues from ‘other sources’ exceed the revenues generated through advertising.
Conclusion In the process of checking Tamar Kordzaia’s statement, the following circumstances have been uncovered. Out of 44 private TV broadcasters, only six had higher revenues from ‘other sources’ than from advertising. We also analysed the revenues of the five chief Georgian broadcasters in the first five months of 2013 and, as noted above, no case has been found of the income from ‘other sources’ having surpassed advertising revenues. Therefore, Tamar Kordzaia’s statement, claiming that the revenue reports of all the broadcasters are non-transparent and that the companies’ incomes from ‘other sources’ exceed advertising revenues, is obviously inaccurate. It should be noted, however, that although they did not exceed the advertising revenues, in some cases the amount of income from ‘other sources’ was quite large. The context of Tamar Kordzaia’s statement was, most likely, related to this precise circumstance. Along with the analysis of facts, FactCheck generally takes into consideration the context of the statement also, but in this case even the context proves to be less relevant, as the claimed facts are true only in six out of 44 cases. Accordingly, we conclude that Tamar Kordzaia’s statement: “If you look into the declaration forms provided by the Communication Commission, you will see that in all broadcasters the revenues from ‘other sources,’ which are not specified, are much larger than the revenues coming from advertising or other transparent sources,” is FALSE.