National Television of Chile (TVN) is grappling with a severe financial crisis, prompting urgent discussions about its future. Francisco Vidal,president of teh Board of Directors,has identified a government-backed modernization project as a potential lifeline for the struggling channel.

Funding Fix on Hold?

While lawmakers acknowledge the need for swift action, the Treasury Commission of the Lower House is currently prioritizing other legislative matters. This delay could substantially impact TVN’s ability to address its immediate financial woes.

Labor Unrest Adds to the Pressure

Adding to the complexity, TVN faces unprecedented labor challenges. For the first time, three unions, representing approximately 700 workers, have rejected the channel’s collective bargaining offer. A potential strike looms, threatening to disrupt operations and programming.

The Brink of Closure?

the situation is dire. Francisco Vidal recently warned that TVN’s current financial reserves may only last until mid-2026. The day we cannot pay the salaries, is the day of the closure (of the channel), he stated, underscoring the urgency of the situation.

Modernization Project: A Potential Solution

Vidal emphasizes that the financing modernization project is the most viable solution. It is that the current financing model does not give (…), he explained.

The project proposes an endowment financing model, where a fund is invested, and only its profitability is used for operations and growth. The initial state contribution would be five billion pesos.

Political Hurdles and Expert Opinions

The proposal faces political hurdles. Deputy Felipe Donoso, from the UDI party, suggested the need for changes in the channel’s leadership. Experts also weigh in on the viability of the “endowment” financing model.

Economists Carlos Smith,from the UDD Company and Society Research Center,and Francisco Castañeda,from the Central University,believe that while viable,the model presents challenges in an increasingly competitive market. They emphasize the need for careful administration and investment strategies to ensure financial sustainability.

It has to be very clear how this fund is administered, what I am going to invest and, thus, how more resources are generated in a financial market where that is increasingly tough. You have to see how it will be managed in a way of giving financial sustainability.
Economists Carlos Smith and Francisco Castañeda

Strike on the Horizon?

The potential strike by 700 workers could cripple TVN’s operations. The three associations voted in favor of that last pressure measure, signaling a strong willingness to take action.

If a strike occurs, TVN could face significant disruptions to its transmission capacity and programming schedule. Currently,the parties are in mediation with the Labor Directorate (DT).

Bleak Financial Results

TVN’s financial woes are reflected in its recent performance. The channel reported losses, attributing the results to a decrease in advertising revenue and increased production costs. Income decreased by 9.9%, primarily due to reduced advertising investment and poor performance in certain time slots.

Despite these challenges, TVN reported savings of $1.079 billion in production, personnel, and services. Operating and administrative expenses also decreased by 4.4%.