SABC in 'dire' position, needs more time and capital, Parliament hears

The SABC needs a capital injection and between 18 and 24 months for its turnaround plan to start yielding results, group CEO Madoda Mxakwe told members of Parliament.

Mxakwe and other officials of the public broadcaster briefed the select committee on public enterprises and communication on its financial stability and other Human Resources related issues.

Members of Parliament heard that the public broadcaster is in a "dire" financial position. This is mainly because its funding model is heavily reliant on commercial or advertising revenue and changing media consumption and audience needs, among others.

Additionally, the SABC in the last few years faced many "internal challenges" such as leadership instability impacting the timely implementation of policy, as well as poor decisions that were detrimental to the SABC's revenue and reputation, Mxakwe said.

The SABC has managed to stay "afloat" over the past 12 months due to the turnaround strategy developed in November 2017. The SABC is still awaiting government approval for a R3.2bn cash injection from Treasury.

"Like any strong strategy, what is really needed is capital injection for it to be successful," Mxakwe said. "We developed and implemented a strategy starting last year July. It worked to drive revenue, reduce costs and deal with issues in the system," he added.

The SABC, which reported an unaudited loss of R483m for the 2018/19 financial year, has struggled to pay service providers. Trade and other payables to suppliers amount to R1.8bn. Significant suppliers such as Sentech – which provides signal distribution services - is owed R554m. SuperSport – which provides sports content – is owed R259m.

Content providers for key programming such as soapies have stopped production and are retaining their content until outstanding payments are received, according to the SABC's presentation to the committee. This content is important to attract viewers and by extension advertisers, CFO Yolande van Biljon said.

Van Biljon shared more on the strategies undertaken to grow revenue and contain costs.

The suggestions to raise revenue include enhancing the TV Licence collection model through online payments. The SABC also proposes changes to the TV Licence legislation and tariff increases - the current tariff is just over 70c per day.

Mxakwe told the committee there are 9.6 million registered TV Licence accounts, according to Stats SA figures, but only 2.2 million licence holders pay. He said the SABC is engaging with the Department of Communications to address the gap.

Another challenge is the payment of staff salaries, but Mxakwe assured this is a priority expenditure item, followed by the payment of suppliers. "We make sure staff are paid," he said.

As per the SABC's presentation to Parliament, the potential inability to pay salaries is a "constant threat" to the workforce. Failure to pay salaries would result in staff embarking on industrial action and result in a "black-on-air" situation.

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