An evaluation of the financial techniques used in decision making by selected Maltese television production houses

Abstract

The restructuring in the Public Broadcasting Services in 2004 brought about a substantial increase in the number of television productions houses. Since the television industry is a relatively new area, little literature exists which can serve as a financial guideline for those involved in the running of these businesses and for the accountants who provide them with a financial service. This dissertation evaluates the financial techniques adopted by local television production houses when deciding whether or not to produce a particular television programme. The research involved semi-structured interviews with directors of local production houses and, in some cases, with their accountant. The research revealed a broad spectrum of viewpoints on the costing of a programme which is essential for decision making. This was reflected in the way costing was prepared by the production houses interviewed. As in most small business, the accountant's role is restricted to drawing up the end of year financial statements and the majority of accountants are not involved in the costing process or decision making. This may be a constraint on the ability of the production houses to take the right decision on the production of a particular television programme. Finally, a set of recommendations was drawn up aiming to improve the financial techniques adopted by local television production houses in order to be financially sustainable in the future.