Picture: Karen Sandison/African News Agency (ANA)
Picture: Karen Sandison/African News Agency (ANA)

Cash-strapped SABC battling to stay afloat, waiting for R3.2bn bailout

By SIYABONGA MKHWANAZI Time of article published Aug 29, 2019

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Cape Town - Deputy Minister of Communications Pinky Kekana has warned that the government will not turn a blind eye to the financial crisis at the SABC.

The cash-strapped public broadcaster is battling to stay afloat and is waiting for a R3.2billion bailout from the National Treasury.

Kekana told members of the select committee on public enterprises and communications in the National Council of Provinces on Wednesday that Finance Minister Tito Mboweni and Communications Minister Stella Ndabeni-Abrahams would not ignore the crisis at the public broadcaster.

She said attempts were afoot to obtain the much-needed cash injection for the SABC.

SABC chief financial officer Yolande van Biljon said the public broadcaster incurred a loss of R483million in the last financial year.

Its chief executive Madoda Mxakwe explained that the cost of running the organisation had substantially increased.

He revealed that operational costs alone spent by the SABC in the last three financial years amounted R3.8bn and that management was expecting to spend yet another R6.8bn for business over the next three years.

However, the other challenge, Mxakwe said, was that revenue from advertising had dropped.

“In the last few years, the SABC has also faced many internal challenges including a decline in audience and revenue.

“Some decisions that were taken were detrimental to SABC’s revenue and reputation and leadership instability that prevented the timely implementation of policy and business decisions to stabilise the institution,” he said.

Meanwhile, Van Biljon said the situation was so dire that only R72m was left in the SABC’s coffers.

The broadcaster has also been unable to pay suppliers and has since had to renegotiate some of its contracts.

The SABC currently owes several suppliers, including signal distributor Sentench R554m, Supersport R259m, the South African Music Rights Organisation R135m while other providers combined still have to be paid R174m.

“Several major content providers of key programming (for example, soapies) have ceased production and are retaining content until outstanding payments have been received,” she said.

The SABC has also resorted to cost-cutting measures in order to continue paying salaries.

Board chairperson Bongumusa Makhathini said the SABC had been waiting for the bailout since 2017. This was after the public broadcaster incurred another loss of R483m.

Phumzile van Damme said the DA would oppose any measure by the SABC to increase TV licence fees.

This was after Van Biljon had said they were looking at measures to increase revenue streams.

According to Van Biljon, there are currently 9.6 million TV licence accounts but only 2.2 million users are paying their licence fees.

Political Bureau

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