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As it currently stands, the SABC can't even afford to air Bafana Bafana games. What caused this financial crisis and is it fixable?
According to a recent report by the City Press, the South African Broadcasting Corporation (SABC) owes over R100 million to 64 companies. R90 million of the debt is owed to independent television producers. Given that there’s been such a drastic decline in audience members and advertising revenue, it may be some time before all the debt is honoured.
But, hey, Hlaudi got paid, and in all probability, it may have been his actions as former COO which set this wrecking ball in motion.
Hlaudi Motsoeneng was fired from his position last year for dragging the broadcaster through the mud and making a couple of really poor business decisions. One of these included implementing a 90% local music quota on our radio stations, which really put a dent in advertising revenue.
The current SABC executives are reportedly working on a payment plan for August, but with regards to a long-term survival strategy, there doesn’t appear to be one, and it’s just not looking very hopeful.
In speaking to the City Press, a source said;
There are no reserves left, there’s no buffer. The broadcaster is living week to week, hand to mouth.
And now, of course, the SABC can’t even afford to air Bafana Bafana matches. Let’s take a closer look at that.
“They Say They Do Not Have Any Money.”
As reported by Times Live, the SABC is now unable to negotiate any new broadcast rights contracts for Bafana Bafana or Banyana Banyana games.
The broadcaster is reported to still owe the South African Football Association (SAFA) over R50 million for the previous broadcast contract, which ended in April 2018.
Dennis Mumble, CEO of SAFA, stated that the SABC’s attitude towards football is indifferent, and the broadcaster isn’t keen on entering into any agreements. All the SABC really wants to do, reportedly, is substantially reduce the fee charged by SAFA during the last contract.
In the last two discussions we have had with them‚ and this is with the top leadership of the SABC‚ the position was – we do not have money and we want to be a responsible broadcaster and therefore we cannot spend money. Can you please help us convince government to give us money.
Due to regulations which forced SAFA to enter a broadcast deal with SABC, it could also result in disaster for the football association – which would earn zero revenue from broadcasting. As with the recent failure to broadcast the opening weekend of the ABSA Premiership, Bafana’s upcoming games against Libya and Seychelles in the Africa Nations Cup might not be broadcast on local television or radio at all.
Clearly unimpressed, Mumble went on to question the SABCs commitment to broadcasting the national soccer team’s games.
The ratings have shown, historically, what Bafana have been able to present. (But) to them (the SABC) Bafana is simply not valuable property to broadcast, and therefore it needs public money in order to support the national team. So go figure that one.
SABC – Another State-Owned Sinking Ship
It’s no secret that the SABC is on its knees. Vuyo Mhaga, spokesperson for the Minister of Sport and Recreation, Tokozile Xasa, has said;
All of us understand the financial situation the SABC finds itself in and engagements with the various parties will happen throughout the week. Naturally we want this situation to be resolved as soon as possible.
With the Bafana blackout looming, talks are currently underway with the SABC and SAFA, but will it really prevent the broadcaster from dragging all involved down with it, should that day ever arrive?
Three years ago, the government blocked SAFA from signing a massive R1 billion deal with Pay-TV company, Siyaya TV, and forced the association to sign with the SABC instead.
Given that the bulk of our income for development comes from our broadcast revenue‚ it will end up becoming a disaster for SAFA,” said Mumble. “That’s the position we are in right now because we were forced to go to the SABC. The joint venture that we had (with Siyaya) was literally undermined because of this relationship and giving Bafana to the public broadcaster.
The entire South Africa is shouldering the burden of our government’s economic failures. But while companies such as DStv still have a couple of subscription customers to rely on, the SABC does not. The only way to keep head above water will be to acquire a loan.
Treasury, on the other hand, is insisting that the SABC first begins to show some semblance of stability, so that we’re not pouring our money ‘into a black hole.’
Can The SABC Weather The Storm?
The new CEO of SABC, Madoda Mxakwe, has stated that he had put together a bold turnaround strategy, which he plans to present to the SABC board soon. This, in turn, will then be used to beg the Treasury for a bailout.
Because that old parastatal mentality always wins in the end.
Meanwhile, Treasury has advised the broadcaster to look for alternative streams of revenue instead. One option would be to downsize staff, and of course, stop wasting the money.
So, does everything come back to the calamitous reign of Hlaudi? He doesn’t seem to think so, and has frequently refused to accept responsibility for steering the SABC into iceberg territory.
In fact, they need me to come and fix their problems so that they can be sustainable again. This happened under their watch, not mine.
Hlaudi isn’t the only damaging factor in this tale. Last year, the SABC admitted to writing off over R4.5 billion in unpaid TV licence debt for the 2016/17 financial year. People just don’t pay their TV licences, and going forward, the SABC may have to resort to drastic measures – such as refusing to deliver content.
But then, of course, if the SABC offered any sort of decent content, and if the money didn’t go toward R33 million Christmas bonuses, then people might not mind paying for their licences. It’s difficult to rebuild that trust, both from consumers and advertisers.
So… Yes, perhaps he is the only damaging factor in this tale.