Lasting financial solution sought for the SABC

Moratorium imposed on capital expenditure

CO M M U N I C AT I O N S Minister Ayanda Dlodlo says she wants to find lasting solutions to the financial troubles facing the cash-strapped SABC.

“I am not looking for today or tomorrow’s solution, I am looking for a lasting solution to the problems of financial sustainability of the broadcasting corporation,” Dlodlo said.

She confirmed receiving a funding proposal from the corporation’s interim board.

“I have asked my financial team to sit down with me to take me through it. I have also asked them to sit with the Treasury,” Dlodlo added.

On Wednesday, the SABC interim board notified the Parliament’s communications committee that it had submitted its funding proposal to Dlodlo earlier in the day.

Dlodlo would not say how much the public broadcaster needed in the form of a cash injection.

“I would not want to talk about it. I would not want to commit to it,” she said.

Interim board chairperson Khanyisile Kweyama was also tight-lipped on the amount when she broke the news of the funding proposal to the committee.

But the state of finances at the corporation is so dire that the public broadcaster has come up with a raft of proposals it hopes will change its fortunes in the next three years.

The public broadcaster, which currently has just R110 million in reserves, recorded an operating loss of R509m for the financial quarter ending in March.

It reported the loss was as result of the 90/10 local content unilaterally introduced by former chief operating officer Hlaudi Motsoeneng.

Spelling out key issues in a proposed turnaround at the SABC, Dlodlo said a moratorium has been imposed on capital expenditure.

“We have ensured that whoever is on paid suspension, those cases should be expedited so that a decision can be made whether or not they remain the employees of the corporation,” she said.

“We have decided to reduce the number of consultants the SABC uses. The sad state is that SABC was using financial consultants when they have almost 80 chartered accountants on their payroll.”

There is also a moratorium on leave encashment. Strategies of licence collection will also be improved.

“The collection of licences is dismal. We have 150 staff members that are responsible for it. I have to deal with issues around the Labour Relations Act,” Dlodlo said.

She added that there would be an assessment of unprofitable TV and radio programmes. The tur naround strate g y, Dlodlo said, will also look at a different funding model to ensure financial sustainability of the SABC.

Tabling the SABC’s threeyear corporate plan, acting chief executive James Aguma said they were operating under tough conditions that were impacted on by the slow economic growth and their “ill-advised” decisions.

“The slower than anticipated economic growth rate, job creation and growing inflation all contribute to a slowdown in ad spend, while the depreciation of the currency dramatically increases the cost of international content and sports rights,” he said.

The SABC funding is comprised of 76% in advertising, 11% TV licence fees, 5% sponsorship, 3% government funding and 5% other revenue.

Aguma said the unilateral decision on 90/10 local content on radio and television resulted in a loss of audiences and revenue.

“The 90/10 content music quotas had an impact of R29m on radio and R183m on television,” he said.

According Aguma, radio would continue to use services of producers and presenters to coin and deliver impactful programmes that appealed to the public.

“Radio will respond to the greater SABC digital strategy and continue to explore alternative offerings through online streaming, podcasts and cellphone broadcast to reach out to listeners with different interests.”

Aguma also said negotiations with sport right-holders for periods spanning between three and five years would be pursued.

“The acquisition of digital rights will also provide the SABC with additional platforms to broadcast sport, especially those events of national interest,” he said in reference to dedicated sports channels.

The television licence agreement would be reviewed and amended.

Board member Febe Potgieter-Gqubule said the board’s risk committee has already recommended the cancellation of contract of the company doing the collections.

The contract comes to an end in July and the SABC licence department will take some elements of the licence collection.

“The feeling was it was much more efficient to do in-house,” she said.