AWK­WARD PARK

Financial Mail - - FEATURE -

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

shoots.”

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

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