Photo: IP

The state is supposed to compensate for RTL’s financial losses. But at the same time, RTL’s sister company, the so-called „Régie publicitaire“ called „IP“, is making a profit. How can this be?

If you land by plane at Findel, take the bus to the station while listening to the bus driver’s radio, then take the tram at the station to go to Lampertsbierg and their villa - then IP has targeted you with advertisements at least 8 times during this journey. And that’s not even going to the cinema! This comprehensive coverage is possible because the advertising agency IP has a virtual monopoly on advertising in this country. This strong position is due to the fact that IP is the exclusive advertising partner of RTL Luxembourg. Anyone who wants to be on RTL, on the radio, online or on TV, does not register with RTL, but with IP. How can this be?

Who is IP, the company with the racist logo, anyway? IP is originally a French company that was founded in 1928, under the name „Information & Publicité“. Shortly afterwards, it worked closely with the Luxembourg CLR (Radio Luxembourg, later CLT) and sold spots in the radio program to its advertising clients from France - there was no commercial radio in France. You could only broadcast advertising on a large scale from Luxembourg. The same applied to Belgium, where IP also opened a branch in 1938. In 1945, the French group Havas took over 98% of the shares of IP and thereby also expanded its influence on CLT. It was not just about political influence, but of course also about saving taxes via Luxembourg. From that moment on, a flood of advertising agencies sprang up all over Europe: in Germany, Switzerland, Portugal, the Netherlands and immediately after the fall of the wall, also all over Eastern Europe, where capitalism was newly introduced. Then in 1997, in the midst of the race to liberalize the European television market, CLT-UFA swallowed IP. CLT-UFA was the successor to CLT and in the meantime had grown into a media empire. Bertelsmann was on board and broke French dominance. It was decided to integrate all national IPs into the respective TV and radio companies of CLT-UFA.

This is where the special case of Luxembourg begins. In Luxembourg, there was no national broadcaster. So of course there was „RTL Luxembourg“, but that was not a company, but a kind of division within CLT-UFA , this so that the entire CLT-UFA could continue to benefit from the interest and grants of the Luxembourg state – and vice versa. For IP, however, this meant that a company „IP Luxembourg“ (IPL) was maintained, a 100% subsidiary of CLT-UFA and directly linked to RTL Luxembourg.

The fact that IP still holds the strongest position in the Luxembourg advertising market today is therefore primarily due to the monopoly that RTL has on the media market. Not just because it is the most popular broadcaster, but because RTL has defended its dominance for decades with the help of lobbying, nepotism, great positions for ex-politicians and the pressure from Bertelsmann on Luxembourg politics. This goes so far that RTL is now subsidized by the state with over €10 million a year. Since RTL thus maintains its position, IP can also maintain its dominant position. The state thus creates an enormous market advantage for an advertising agency. But that is only part of the problem.

In order for the state subsidy to RTL Luxembourg to be at least theoretically legal, the state cannot simply transfer the money directly - that would violate EU competition laws. Under certain conditions, the state is allowed to compensate for a deficit incurred by a corporation. In practice, RTL, at least according to RTL information, is running a deficit. No exact figures have been published. An invoice was just drawn up in which RTL’s deficit in the future will come exactly to the amount defined by the EU as the maximum subsidy amount. What a coincidence.

The advertising company IP does not have a deficit, and by the way, the other sister companies around RTL Luxembourg are also profitable and contribute money to the parent company. For example, IP has consistently made over 1 million in profit in its balance sheet after 2022. This means: IP makes profits and passes them on to Bertelsmann, RTL makes losses - which are then compensated by the state. Although RTL Luxembourg and IP Luxembourg are practically the same company. And in practice, this does not just mean that the staff and content overlap, but that IP even goes so far as to talk about „IP radio“ in its advertising material when offering its clients spots on RTL Luxembourg.