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Madoda Mxakwe, CEO of SABC. (Photo: Sebabatso Mosamo / Sunday Times)
After making significant progress in recent years in reducing its operating deficit, the SABC is heading for a huge loss of more than R1 billion in the current financial year as television advertising sold out during the Covid-19 lockdown in SA.
SA’s public broadcaster SABC announced on Tuesday (November 17, 202) a net loss of R511 million for the year to March 2020, a 6% decrease from the previous year, requiring continuing your long overdue spending reduction process.
There were emotional scenes on social media when these announcements in parliament were leaked to the SABC at Aukland Park in Johannesburg, with some suggestions that television programming could be affected.
Urgent staff meetings convenedand some staff members demanded the resignation of management, while others chose to refuse to work until more answers about the Section 189 process were obtained.
SABC, on Tuesday, November 17, announced a 6% decrease in revenue compared to the previous year, but the issuer has confirmed that this loss is likely to double for next year.
The broadcaster, which derives most of its revenue from advertising, has gradually reduced its operating losses and, after a process of downsizing, expected to break even in the coming years.
But the chief operating officer Ian Plaatjies confirmed in an interview that the lockdown process has seriously delayed these plans, after advertising, particularly on SABC’s television stations, came under fire as the country entered the Covid-19 lockdown earlier this year. “Advertising just stopped” Images said.
The SABC is desperately trying to stabilize its finances after becoming a kind of chaotic disaster area under the erratic management of Hlaudi Motsoeneng during 2012-2017.
The credibility of the organization has been criticized and its losses mounted until finally the government was forced to grant the organization a ransom of 3.2 billion rand in 2019.
In the last three years, losses decreased from around R600 million in 2018/19, to around R511 million in 2019/20. The organization was targeting losses of R350 million, but now it is almost certain that it will lose this figure by a large margin.
The scale of the losses has put the organization under enormous pressure and has been forced to reduce its staff. The original proposal was to cut staff by around 900 positions, but following discussions, various measures were introduced to mitigate this loss, including a salary freeze for the foreseeable future until the corporation breakeven. Around 240 jobs will be lost.
SABC’s other revenue generator has not fared well either. The corporation said that in 2020, Television licensing revenue had declined 18% year-on-year to R791 million “due to late use of debt collection agencies in this period.”
“This resulted in only 24% of the total license fees billed being realized as revenue, compared to 31% for the year ended March 31, 2019.”
Images He denied that the reason for the non-payment was because the SABC was seen as “the voice of his master” or other credibility problems, noting that nine of the 10 most watched programs on television were produced by the corporation.
He speculated that the reason for the default was essentially due to SA’s broader default culture. SABC asked regulator Icasa to require satellite television station DStv to collect television license fees on its behalf, an idea that DStv strongly opposes.
Plaatjies said that if SA’s population were to pay the R265 annual public broadcast rate, the corporation could substantially increase local content production. At this time, SABC was spending about 43% of total costs on staff salaries and about 22% on content. “In most television production companies, those numbers would be the other way around,” he said.
Meanwhile, SABC group executive director Madoda Mxakwe said in Parliament that “SABC has taken bold and decisive steps to implement the approved restructuring plan.”
“Despite difficult economic conditions, SABC remains on track to achieve financial sustainability and will continue to fulfill its public mandate to educate, entertain and inform the nation for generations to come,” he said. DM / BM
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