Warning that the SABC could drag down Sentech

Deputy communications minister Philly Mapulane has told parliament that the SABC is not only technically insolvent but owes broadcasting signal distributor Sentech more than R700-million – or about half of the latter entity’s annual revenue.

The SABC board presented its corporate plan for the 2023/2024 financial year to parliament on Tuesday – six months after it was supposed to have done so, because the board was only appointed in April.

The plan was drawn up in May, and revenue projections were based on its new streaming service, SABC+. It needs to be updated and revenue projections adjusted – but SABC board chair Khathutshelo Ramukumba said the board is not making amendments to the corporate plan yet as it is currently involved with management in developing a long-term strategy to address its financial sustainability – the biggest challenge the organisation is facing.

Mapulane told parliament that the money the SABC owes to Sentech is “significant” and, if the situation is allowed to continue it will “impact heavily on the sustainability of … Sentech”.

“It has the ability to collapse this entity if you consider that the revenue of Sentech is hovering around R1.4-billion,” he said.

Amid this dire situation, communications minister Mondli Gungubele has requested the board and management to draw up a corporate strategy for the 2024 to 2026 financial years.

It couldn’t come soon enough: the SABC’s revenue for the 2022/2023 financial year was 7.9% less than the previous year – and a remarkable 27% less than budgeted for. The broadcaster also reported a net loss in 2022/2023 of R1.1-billion.

Dire situation

It blamed the bad performance on poor audience ratings, the impact of analogue switch-off, load shedding, the inability to monetise sports properties and other content, and South Africans’ propensity not to pay their television licence fees.

According to the auditor-general’s latest report on the SABC, the broadcaster is not self-sustainable and is in a dire financial situation. The AG concluded that the SABC’s inability to maintain its “going concern” status is so pervasive that her office had to issue a disclaimer opinion.

SABC chief financial officer Yolande van Biljon admitted there is a “real risk that the revenue targets are higher than what is achievable”, and as a result, “austerity cash management at the SABC continues”.

Read: We cannot afford your services anymore, SABC tells Sentech

Uyanda Siyotula, SOS Support Public Broadcasting Coalition national co-ordinator, said the plan presented by the SABC is disappointing because it’s “so outdated”.

“The figures don’t even include the R464-million lost in the second quarter, and there is no reflection of mitigation plans to tackle the problems. What we mustn’t forget is that millions of people rely on the public broadcaster and government needs to come through for the SABC on those grounds alone,” she said.

Media Monitoring Africa director (that’s his title on Linked-IN) William Bird agreed, saying the SABC is still the public broadcaster and, as such, fulfils a fundamental democratic function.

“We have to find the resources to support it sustainably,” he said, “but government has failed at every single turn. First it cut off its analogue signal, where it gets 40% of its audience and advertising funding, and then it delayed appointing a board for six months. No wonder there is a fantastically huge financial crisis.

“Thinking some kind of strategic plan is going to help is absurd. Its funding model hasn’t been shifted for 20 years, and then government comes out with the outdated SABC Bill. It’s embarrassing, despicable and disgraceful that parliament is being actively misled by the department on the impact of this bill.”

Bird said the SABC is to be blamed for some of its problems, but on the whole he believes the financial crisis demonstrates “an abject failure by government, which should be focusing on its public service mandate”.

Read: SABC and e.tv accuse Sentech of price gouging

“There will have to be some kind of bailout, or at least a loan guarantee so that the SABC can operate successfully,” he said.

Parliament resolved to help by approaching the appropriations committee to try to get funding for the public broadcaster.  – © 2023 NewsCentral Media

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