CLOSE X
Advertisement

SABC admits it's on the brink of collapse

Politics
Johannesburg – The South African Broadcasting Corporation (SABC) on Thursday admitted that it was on the brink of financial collapse, but blamed Members of Parliament (MPs) who were investigating maladministration and issues of corporate governance affairs for the recent decline in revenue.

SABC spokesperson, Kaizer Kganyago, in a statement said continuous attacks on the SABC affected its business relations with its partners, which could unfortunately lead to the retrenchment of staff members.

A report compiled by an ad hoc committee of Parliament into the SABC, which recommends, among others, that President Jacob Zuma seriously considers firing Communications Minister Faith Muthambi, was adopted in the National Assembly last week.

Tell a friend
File picture: Karen Sandison/Independent Media

Kganyago said that former chief operations officer (COO), Hlaudi Motsoeneng, was at an advanced stage of discussions with funders to generate additional revenue from strategic partnerships with provincial governments and the private sector to fund these additional channels.

Kganyago said that project had been negatively compromised from October 2016 with these planned revenues not being realised, which also put the sustainability of the current SABC News and Encore channels in jeopardy.

Motsoeneng is no longer in the employ of SABC after numerous court bids to reinstate him failed. "The utterances made by various individuals and organisations at the ad hoc Committee have negatively portrayed the SABC and this has had an adverse impact on the revenues of the SABC in the form of payment of TV licenses, advertising spend and the withdrawal of strategic partners who were engaged to finance additional channels that the SABC intended to launch in preparation for Digital Terrestrial Television (DTT)," Kganyago said.

"This project has been portrayed negatively in the media from October 2016 with the financial situation of the SABC, inter alia, being a major focus of this attack."

The ad hoc committee was appointed to hold an inquiry into the fitness to hold office of the SABC board. Its report followed a more than three month process by MPs, who heard testimony from various witnesses who put Motsoeneng at the centre of controversy within the broadcaster.

The SABC incurred R5.1 billion in irregular expenditure. Motsoeneng was heavily criticised after signing a R553 million deal with MultiChoice to create two new SABC channels on DStv over five years.

This was deemed as selling SABC's archives to MultiChoice, while Motsoeneng scored himself a healthy R33 million bonus. Kganyago said revenue streams were under pressure with the SABC now funding its activities from its reserves.

At least 85 percent of the SABC's major sources of revenue are advertising revenue and sponsorships, while TV licenses only make up 12 percent. Kganyago said advertisers had progressively reduced their advertising budgets from October 2015 to date a factor that was affecting the broadcasting and print media industry equally.

"The SABC has cautioned on numerous occasions that the [two percent] contribution from government to fund the public broadcasting mandate is miniscule in comparison to the cost," Kganaygo said.

"As a result, the SABC cautioned that the collapse of its finances was imminent if due care was not exercised in dealing with the confidentiality of contracts with its strategic partners."

Despite these challenges, Kganyago said the SABC would meet its obligations and continue to discharge its public service mandate of educating, entertaining and informing South Africans and other worldwide audiences.

Tell a friend
Advertisement
X