SABC can't afford to broadcast Rugby World Cup as sports rights 'extremely expensive'
Johannesburg - The SABC has blamed the exorbitant sports rights for not broadcasting the Rugby World Cup.
Briefing the communication portfolio committee on Tuesday, SABC chief executive MAdoda Mxakwe said one of the biggest cost drivers for the public broadcaster was the exorbitant cost of sports rights.
Mxakwe said the sports rights were extremely expensive and affect their profit statement.
"It has been extremely expensive and has affected our profit and loss statement," Mxakwe said. In the past, three years SABC lost as much as R3.8 billion on monies paid for sports broadcasting rights. If the SABC continued on this trajectory, it would need another R6.8bn, which is not sustainable," he said.
Mxakwe also said what they spent and what they got on sports rights was not making commercial sense.
"About six years ago there was a contract signed to acquire sports right for footballs at R208m a year over five years, the revenue generated was less than R40m. That is commercially a wrong deal," he said.
Mxakwe said they have taken a decision not to sign any deal that was not commercially viable for the SABC.
He also said in the past deals were signed without looking at costs for the public broadcaster.
In the case of the rugby sports rights, Mxakwe said the price put on table was just exorbitant
"Much as we are committed to broadcast sports of national interest we could not allow to get into a deal not commercially viable."
The CEO told the MPs that in the last financial year SABC recorded R483m in losses, which was a huge improvement from R722m the prior year.
He said out the R483m was R400m directly contributed from cost of sports rights.
"That is a burden we are expected to carry as the SABC."
Mxakwe also said the cost for the rugby rights for television was 28 million US dollars and for radio 60 000 US dollars.
"That does not factor the issue of production which would be close to R900 000."
He also said the SABC had earlier this year written to Icasa asking for the review in the transparency and the unbundling of the sports rights.