The head honchos at the SABC are putting on a brave face. Though they acknowledge the depth of the crisis at the public broadcaster, they also say it is making progress in turning itself around.
Addressing an SA National Editors Forum meeting this week, CEO Madoda Mxakwe, flanked by COO Chris Maroleng and CFO Yolande van Biljon — all of whom joined the broadcaster this year — didn’t beat about the bush.
“We are in a very painful but necessary transition as an organisation,” said Mxakwe.
The SABC is technically insolvent, is finding it difficult to pay suppliers, and, according to its latest annual report, its R7.26bn in expenses outstrip revenue by R640m.
The situation is untenable. To keep its head above water, the SABC has proposed a drastic jobs cut — close to 1,000, or about a third, of its permanent staff — to reduce its wage bill by R440m a year. It’s also looking to slash the number of freelancers it uses from 2,400 to half that figure.
Without a reduction in head count, overall expenditure is expected to rise to R7.64bn, while revenue is projected to rise to only R6.84bn. This would leave the broadcaster with an R804m operating loss for the year to end-march 2019.
Mxakwe said he and his leadership team have looked at the numbers, and have no choice but to make tough calls.
But while the group is facing an uphill climb, he remains optimistic. “Not all is lost,” he said. “We are seeing green
Since the beginning of the financial year, the SABC has cut costs by R463m and, when measured quarter on quarter, there has been a 6% rise in revenue.
Even so, Mxakwe knows he has a long road ahead. Management still has to enter formal negotiations with unions regarding retrenchments — something that is scheduled to start at the end of the month. And the group’s bloated management structure needs to be tackled.
Best practice in terms of human resource management is to have one manager to 250 employees. At the SABC, that ratio is one to 10. “In terms of the scope of control, this doesn’t make sense,” he said.
The group’s latest annual report shows just how top-heavy the broadcaster is. It has 443 middle managers, who on average earn R1.17m each and collectively make up R518m of the wage bill.
The situation is similar at the junior management and supervisory levels, where a total of nearly 2,450 personnel earn a combined R1.7bn. By contrast, the “rest of staff” category comprises 471 people who account for 8.1% of staffing costs.
It was during the tenure of former COO Hlaudi Motsoeneng that the wage bill increased so drastically — from R1.82bn in the 2012/2013 financial year to the current figure of R2.54bn.
Mxakwe said the structure of the SABC itself — it has six tiers of management — is also an issue. “Imagine having one GM with only four people reporting to that person. It just doesn’t work from an organisational point of view.”
The SABC’S structural issues are also evident in how its staff are used. Mxakwe gave the example of its sports operation: the person responsible for putting together sports broadcasts works Monday to Friday, which means a freelancer has to be brought in to take care of live sports broadcasts over weekends.
Mxakwe said the SABC’S “colleagues in Randburg” — referring to pay-tv operator Dstv — do the same job very differently. Instead of bringing in weekend freelancers, Dstv has a full-time person working on Saturday and Sunday.
The reliance on weekend freelancers partly explains why the SABC’S freelance bill has ballooned to more than R500m a year. Mxakwe said no structures have been in place to manage the freelance contracts, leaving the system open to abuse. “It was very ad hoc.”
Cutting the wage bill is not the only way the SABC is reducing costs. Van Biljon said the broadcaster has done an audit of its properties to determine their condition, and is weighing up options for its extensive art collection.
Mxakwe ruled out disposing of any radio stations.
He and his management team also have to deal with a pension contingency of R760m and a medical aid provision of R1.06bn. Maroleng declined to provide