The Tribune

By NEIL HARTNELL

Tribune Business Editor

ALMOST $1 million in forgiven debt could be "reinstated" as a liability for the Broadcasting Corporation of the Bahamas (BCB) if it fails to pay the final $500,000 installment on a copyright settlement, its former chairman said yesterday.

Reviewing what himself and the former Board had accomplished during their 2007-2012 tenure, Michael Moss told Tribune Business they had left behind proposed legal amendments "that would have safeguarded the future of the Corporation as a Public Service Broadcaster (PSB)", removing political interference and ensuring security of tenure for directors.

Disclosing that the BCB's $2.7-$2.8 million 'high definition' TV digitisation project was likely to be completed within weeks, Mr Moss said the former Board's main thrust had been to right-size the Corporation and reduce operating costs, thereby slashing the annual burden it imposed on Bahamian taxpayers via subsidies.

Suggesting that the Christie administration's decision to hold the BCB's 2012-2013 subsidy flat, year-over-year, at $5.5 million vindicated the former Board's success, Mr Moss said this sum had been reduced from its $12 million high in the 2006-2007 fiscal year - a drop of 54.2 per cent, or $6.5 million.

The former chairman also predicted that the pre-general election advertising spend by the two major political parties was likely to translate into "a banner revenue year" for the BCB once its financial statement for the year to end-June 2012 were completed.

And Mr Moss also revealed that, when the former Board was appointed in 2007, it had to content with a Corporation where, not only audited financials but management accounts, were completely absent.

Noting that the BCB's per annum operating expenses had been cut from $18 million to $12 million during his tenure, with the 100-strong reduction upon 2007 staffing levels accounting for $4 million of these savings, Mr Moss said: "That [cost slashes] was the thrust of the Board, and those are the major achievements made in that regard."

Focusing on what has been left on the table for the incoming Board, the former chairman identified completing the settlement agreement payments to the Performing Rights Society (PRS) as a key issue.

The deal with the PRS dealt with the BCB's failure to pay artists due royalties for use of their works on ZNS, requiring the Corporation to pay $500,000 annually over a four-year period. In return, the PRS lifted an injunction - "previously ignored" by the BCB - that prevented the latter playing musical works, but one $500,000 payment remains outstanding.

"Among the two issues I would have liked to have seen completely resolved and put behind us would have been the final payment for $500,000 to the PRS," Mr Moss told Tribune Business.

"There is potentially a major penalty if that is not paid. A part of the debt [to the PRS] was forgiven, which was close to $1 million, and that component forgiven will be reinstated without payment.

"You're talking about a significant payment for failure to perform. The $500,000 not only takes care of the past due obligations, but our current financial obligations."

Mr Moss said some $330,000 of that $500,000 sum is to cover past due royalties to the PRS, with the remaining $170,000 to cover current amounts. Explaining how the predicament with the PRS arose, he added: "Royalties were not being paid on a consistent basis. What you'd see going through the records is that someone decided to make payments, but this was not being done consistently."

Elsewhere, the former BCB chairman said he had hoped to complete digitisation of ZNS's TV signal, taking it into the 'high definition age', before demitting office.

This was not to be, but Mr Moss added: "The installation is quite advanced. Unfortunately I did not get to complete it, but the work is ongoing and carrying on, and I expect the work to be completed with or without a new Board, in a couple of weeks' time."

This, the first phase of digitisation, is set to cost $2.7-$2.8 million. The remaining two are the acquisition of an outside digital broadcast vehicle, and digitisation of the BCB's systems in Freeport.

As for organisational and structural reforms, Mr Moss told Tribune Business: "What we had hoped the old administration would have done was to enact amendments to the law that would have safeguarded the future of the Corporation as a Public Service Broadcaster.

"That would have given security of tenure to Board members, so they would not have to change out with the change out of the Government. Board members would have been elected for defined terms, and these terms would have been staggered, so they would not all come in and go out at the same time.

"There were some changes that our Board had recommended, but the Government had not got around to implementing them. The more critical ones are no wholesale changes to the Board with changes in government, and some degree of protection for the general manager.

"Under the present Act, the general manager is appointed by the Minister, and we wanted to have political interference in that regard removed from the Corporation. We're already hearing talk about changing out this one, changing out that one, and it does not make good business sense."

Suggesting that the 2007-2012 Board's record "will speak for itself", Mr Moss noted that the BCB's vehicle, property and all-risks insurance premiums had been cut by more than $250,000 per annum due to competitive bidding. The satellite uplink services agreement had also been renegotiated, resulting in a price cut from $1 million to $330,000 annually.

"If you go back to 2007, I think the subsidy for the Corporation for its operations was $12 million," Mr Moss told Tribune Business. "

"It's really been shrunk drastically from the high of $12 million to where it is now, because of the capacity to take costs out of the business."

The former Board also managed to complete the BCB's audited financials for the years 2003-2010, despite the absence of even management accounts - let alone audited ones - when they were appointed.

"They were not even preparing management accounts," Mr Moss told Tribune Business. "We did not have accounts available to be audited. We had to go from scratch and create management accounts for past years based on limited available records.

"That's why it took a long time to get those accounts audited. The auditors were saying: 'We can't use those records; we need more information than you're presenting to us. The quality of the information was not quite where one wanted it to be."

On the staff downsizing, Mr Moss said the BCB's personnel had been increased from around 230 in 2002 to 280 in 2007, "notwithstanding consultants' reports saying it needed to be going in the opposite direction. We whittled it down to 180."