When did RT decline really start? Monty's death, Burnie leaving and so on have been events that sunk the ship even lower, but what was the starting point?
Hard mode: no "the foundation of RT"
The problems at RT are all problems small businesses have when expanding into medium sized businesses.
Getting plastered on the daily, having flexible schedules for everyone and every other non-standard business practice RT adopted only worked in a small business setting with minimal employees who are all friends.
RT began to crack the minute they had to transition to a mid-sized production house where there are 50+ employees and only a few of them who even know who everyone else is, let alone being friends with all of them. This naturally began to create internal divides with two larger groups of people emerging from the formation of all these divided sub-groups. The group that wanted everything to remain the same as it was when they were small (copious amounts of drinking during work hours at RT, abuse of crunch, etc.), and the group that wants to be more standardized and professional.
RT as a company wants to be more professional, but its management has never fully moved on from being a small business. Be it due to lack of experience, being emotionally compromised or simply never having the mind for upper level management, RT's management was simply not capable of doing a business transition. Business transitions are always tricky and will always alienate the group of employees and customers insistent on everything remaining the same.
However, not making that transition is even more disastrous since it alienates the group of employees who require things to be more standardized and sets the company up for stagnancy through inefficient and frankly ineffective business structures that have to work around all the un-standardized business practices. Ultimately pissing off the customer base. Standardized practices are necessary to running larger operations which will deliver adequate product in sufficient amounts to the customer base.
Failing this will eventually lead from stagnancy to a major decline as we are seeing now as RT is desperately trying to transition far too late under Fullscreen and ultimately alienating the only employees and customers they have left.
RT essentially never grew with their audience or adapted to meet the new audience. Stagnancy will almost always lead to decline, and finally death for any business.