Why must any person in Japan who installs a television set conclude a contract and pay a monthly fee for broadcasts aired by NHK, Japan’s only public broadcast corporation? Isn’t it a violation of freedom of contract guaranteed under the Japanese constitution to impose a mandatory fee for broadcasts one does not wish to watch?

　　　　　On December 6, the Supreme Court ruled that obligatory contracts with NHK are constitutional. The ruling complies with Article 64 of the Broadcast Act, which stipulates: “Persons installing equipment capable of receiving NHK broadcasts shall conclude a contract for the reception of the broadcasts.” But I consider the ruling highly questionable because it absolutely fails to take into consideration other substantive issues pertaining to NHK’s operations, especially its finances.

　　　　　Over the years, NHK has failed to honor its own responsibilities stipulated in Article 4 of the broadcasting law, including: “The broadcaster must be politically fair” (section 2); “Its reporting should not distort facts” (section 3); and “It should clarify the points at issue from as many angles as possible where there are conflicting opinions concerning an issue” (section 4). The top court completely failed to address this issue of NHK’s blatant bias in its broadcast content, which is entirely inconsistent with its role as a public broadcaster.

　　　　　The court also utterly failed to take into account the fact that NHK has now grown into a mammoth public corporation with an excess of cash, engaging in investment activities which appear to have absolutely nothing to do with its business.

　　　　　By making payment of the fees a “legal obligation,” the court has created a situation in which NHK will be able to expect to win easily whenever it goes to court to collect unpaid charges.

　　　　　With the percentage of paid subscribers now nearing 80%, the recent court judgment will make NHK’s fee collection operations much easier. But there can hardly be any justification for pouring even more cash—in effect our tax money—into NHK, whose broadcasts are clearly biased. Its reports on alleged nepotism involving Prime Minister Shinzo Abe and its frequent depiction of Japan as a villain in historical documentaries are only two examples of this disturbing reality.

　　　　　On December 15, I hosted a special edition of my regular “Genron” Internet TV news show to get to the core of the matter. Based on what we discussed on our show, I will introduce below some incredible facts about NHK’s greed for money, which is just as appalling as its blatant distortion of facts. Scrutinizing NHK’s financial statements, economic commentator Tsukasa Jonen had this to say about its interim 2017 results:

　　　　　“NHK has hefty gross assets totaling more than \1 trillion (US$9.8 billion)…The simple fact that it is so rich is stunning, but you will be even more stunned by what an analysis of the corporation’s finances reveals.”

　　　　　Looking at NHK’s total assets, what immediately strikes one is its investments in marketable securities (worth \246.1 billion, or approximately US$US$2.41 billion), long-term investment securities (\94.6 billion, or US$927 million), and specified assets (\170.7 billion, or US$1.67 billion)—for a combined total worth \511.4 billion (approximately US$5 billion). Let us take a closer look at these items one by one..

Affluent NHK Must Reimburse Subscribers for Fees

　　　　First, we will review the marketable securities NHK holds, much of which are negotiable certificates, i.e. time deposits. Why must NHK make such large deposits? Jonen’s explanation is readily comprehensible: NHK is simply too rich.

　　　　　What about the long-term investment securities? “They comprise debentures and local bonds issued by semi-government corporations,” explained Jonen. “NHK itself is a semi-government corporation, as we all know. And yet, it invests in other semi-government corporations. I don’t understand why there is a need for this.”

　　　　　These securities include non-government guaranteed debentures worth \10.5 billion (US$103 million) and bonds (worth \10.5 billion) issued by government-run public corporations.

　　　　　 “What NHK does with its finances resembles the government’s fiscal investment and loan program (FILP),” observed Jonen. But again this begs the question: Why is it necessary for NHK to make such investments?

　　　　　The long-term investment securities NHK holds include some others that baffle outsiders. Take industrial bonds for instance, for which the broadcaster has paid \59.1 billion (US$579 million). Here again, one cannot help questioning why NHK must buy these bonds with the fees collected from the public. Presumably, it is simply because NHK has an abundant surplus of funds.

　　　　　Finally, let’s review NHK’s third category of investments, specified assets worth \170.7 billion (US$1.67 billion). I was stunned by what Jonen had to say:

　　　　　 “In point of fact, the specified assets include the afore-mentioned non-government guaranteed debentures and industrial bonds—worth \79.4 billion (US$780 million) and \64 billion (US$627 million), respectively. If other assets, also listed under the same category in the long-term investment securities, are added, NHK in fact has some \90 billion (US$882 million) worth of non-government guaranteed debentures and some \123.1 billion (US$121 million) worth of industrial bonds. It is a staggering sum.”

　　　　　I have already mentioned that the non-government guaranteed securities held by NHK were issued by semi-governmental corporations and that the industrial bonds are mainly those issued by power companies. NHK must explain why it is investing the fees it collects from the public in power companies and other semi-governmental corporations when its mission is to produce and broadcast programs of rich quality.

　　　　　If it has more than enough capital, NHK should by all means refund subscribers for their fees, or lower the fees drastically, as proposed by its former chairman, Katsuto Momii. Taking a look at NHK’s total balance sheet, Jonen put it in context with private corporations:

　　　　　“NHK’s net worth is \744.2 billion (roughly US$7.30 billion) on a non-consolidated basis, and \834 billion (US$818 billion) on a consolidated basis. Either way, it’s an outstanding performance on a par with some of Japan’s leading blue chip companies. Panasonic, for instance, is worth \981.4 billion (US$9.6 billion) and Fujitsu \909.8 billion (US$8.92 billion). As a matter of fact, NHK’s net worth is much bigger than that of Mazda Motors Corp. (\552.3 billion, or US$5.4 billion) or Fuji Heavy Industries Ltd. (\496.2 billion, or US$4.86 billion). (Fuji Heavy Industries Ltd. was renamed Subaru Corporation last April.)

Group of Highly Paid Workers

　　　　　Being flush with cash, NHK shares its profits generously among its 10,273 employees. Its 2016 financial statements put its total payroll at approximately \110 billion (US$1.08 billion) for an average salary of \10,798,300 (US$105,866).

　　　　　This means that an employee earned roughly 2.5 times more than an average Japanese worker, making NHK’s work force a group of extremely highly paid workers. Is this fair?

　　　　　Exposed to fierce competition, private corporations are committed to developing new products and technologies in a desperate effort to make a profit. For NHK, snugly protected by law, all that is required of it is to collect subscription fees. Moreover, it fails to comply with Article 4 of the broadcast law, as it continues to flagrantly distort facts in its broadcasts. The gap in wages, greatly in NHK’s favor, can hardly be tolerated.

　　　　　“NHK’s cash flow shows a surplus of \50.8 billion (US$498 million) in the first half of 2016—and more than \100 billion (US$980 million) for the full year,” noted Jonen. “Of this total, \32.7 billion (US$320 million) in the first half—and a combined total of \65 billion (US$637 million) for the full year—was diverted to purchasing securities.

　　　　　“As I earlier mentioned, much of NHK’s surplus cash goes into fixed deposits. Because it has more cash than it can readily spend, NHK saves a great deal. So I wish to appeal to NHK: ‘If you have so much cash left, why don’t you just give it back to the people?’”

　　　　　All of us on the show laughed when Jonen said this, but it’s no laughing matter. NHK, which clearly has an abundance of cash, must give its surplus back to the people. It is unconscionable that it continue to collect fees under the cloak of the recent ruling by the Supreme Court. It also owes it to the public to explain why it annually allocates as much as \65 billion (US$637 million) from the fees it collects to buy securities. NHK must fully answer this question.

　　　　　It may perhaps be too optimistic to expect NHK to repent its greedy ways or rectify its biased broadcasts, as I suspect these unfortunate character traits are already well ingrained in its corporate culture. And yet, we cannot quietly condone the present reality of NHK as a public broadcaster. We must do what we can to change the status quo as soon as possible, and the only viable means of doing that may be the introduction of new systems such as scramble broadcasting or spectrum auctions.

(Translated from “Renaissance Japan” column no. 784 in the December 28, 2017 issue of The Weekly Shincho)