We need to run the SABC like a commercial entity – board chair


SABC board chairperson Bongumusa Makhathini says it is time the SABC was run like a business based on affordability, hinting that the broadcaster must review some of its offerings.

Makhathini and Communications Minister Nomvula Mokonyane briefed the media on Monday on the department's plan to review how the SABC and the broadcasting sector as a whole were being funded and operated.

Mokonyane asked the public and the industry to comment on the department's "Issues Paper" on the sector, which will be published on its website in the next few days.

During a round of questions, Makhathini – who was appointed along with a new board after a lengthy parliamentary inquiry into the ailing broadcaster – said affordability should now be the focus.

The SABC currently relies on 85% of its revenue coming from commercial advertising, 12% from TV licences and only 3% from government grants, he said.

"So when you understand that model, it gives a clear indication that the SABC is a commercial entity, and it needs to be run as such," he said.

Unlike other industry players, the SABC also has to comply with a public mandate, set out by the Broadcasting Act.

"When you try and cost the public mandate, it costs around R4.2bn [per year]," he continued.

However, Makhathini said the model was "still relevant".

"We encourage South Africans to pay their TV licences. [But] we need to be structured like a commercial entity."

New leadership

There were certain "fundamental" things they had always done without really checking if they were sustainable or affordable.

"When you look at sports rights for instance, it costs us billions of rands. But our ability to monetise those rights is problematic, because not everyone follows what is happening and we can't attract the advertising revenue.

"The public though is used to the SABC delivering on some of these things."

It was therefore important going forward to assess the public broadcaster's affordability, so "whatever we do, it must be something we can afford".

He acknowledged that financial constraints hindered the SABC's ability to find new, innovative content.

Key appointments in leadership, however, were a start.

"The announcement of the new group CEO, CFO and COO, it tells you at a leadership level, we are stabilising, but we [now] have to look at things that will make the SABC sustainable going forward."

The board announced the appointment of Madoda Nxakwe as group CEO and Yolande van Biljon as CFO of the public broadcaster this past weekend.

This follows the appointment of Chris Maroleng as COO back in January.

'Pay your TV licences to help the SABC'

Mokonyane said that Parliament's inquiry into the broadcaster in 2016 showed the SABC was not in a stable state, both financially and organisationally, following years of turmoil under then COO Hlaudi Motsoeneng. 

She, however, was pleased it was on a "recovery path", and welcomed the appointments of Mxakwe and van Biljon.

"We hope this will go a long way in stabilising leadership and governance at the organisation."

Mokonyane said that Cabinet saw the SABC as a key driver in the country's migration to digital terrestrial television.

A turnaround team comprising the department, National Treasury and a turnaround specialist will help put the SABC back in a strong position, she hoped.

"We are working around the clock with National Treasury to stabilise the financial position of the SABC so that it can meet its financial obligations to its creditors and acquire new content.

"Equally, this is a task that requires the involvement of the public who have to pay their TV licences fees so as to ameliorate the funding challenges the public broadcaster currently faces," she pleaded. 

The due date for public submissions on the party's review of broadcasting will close "mid-July 2018".

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot