SABC wants R3bn bailout

2017-09-14 08:45

Cape Town – The beleaguered South African public broadcaster urgently wants a massive R3bn bailout to keep it from collapse, more than double its last government bailout of R1.47bn in 2009.

Parliament’s standing committee on finance on Wednesday revealed that the struggling SABC – gutted after gross financial mismanagement, corruption and a revolving door exodus of top executives and board upheaval over the past three years – wants a R3bn bailout.

The jaw-dropping R3bn sticker price is the first time the South African public has heard what the bailout amount is that the SABC is asking the government for and that has so far been deliberately kept secret.

It comes four months after the cash-strapped SABC requested yet another government bailout from national treasury in May, an amount that the new minister of communications, Ayanda Dlodlo who said her ministry will support transparency, has been unwilling to reveal despite repeatedly being asked about it.

The secrecy over the size of the amount the SABC wants in its latest bailout has prevented any public debate to take place over it, with the long-suffering SABC – similar to other parastatals like the SAA, Eskom and others – in desperate need of another large cash injection to keep it afloat.

The SABC is unable to get any bank loan without a government-backed guarantee, meaning that the broadcaster is unable, without help, to raise the necessary cash to cover its operating expenses on its own.

A bailout in the form of a “government guaranteed loan means that the South African public – through the government – becomes responsible should the SABC be unable to repay it. 

The SABC lost millions of rand

The SABC lost millions of rand due to a litany of dubious contracts, consultancy fees, legal fees in lost court cases, exorbitant executive salary hikes and irregular bonus payouts, unsustainable localTV and radio content quotas, falling TV and radio viewership and listenership, as well as wasted spend on local TV content that failed to attract ratings.

Despite being in deep financial trouble, the SABC has inexplicably also been paying external companies for “double up” work, for instance to collect SABC TV licence fees while the broadcaster has a large in-house TV licence fee collecting staff. This practise has now been cancelled by the interim board. 

Ironically, while the SABC paid mega-millions for external fees collection, the SABC’s revenue from TV licence fees has plunged, with the broadcaster that paid more to receive less. 

The mismanaged SABC owes millions of rand to TV producers,  various suppliers and even the signal distributor Sentech with which the broadcaster had to make a special arrangement to settle back payments later in order to prevent it’s channels’ signals from being cut off and the SABC going dark.

The Special Investigative Unit (SIU) has been given the green light to start a comprehensive, in-depth probe into widespread mismanagement and corruption at the SABC, an investigation that is expected to take three to four years to complete. 

The SABC is expected to end its 2016/2017 financial year with an eye-watering R1.1bn net loss. The broadcaster posted a R395m loss in 2014/2015 that became even worse and grew to R411m in 2015/2016. That loss will now again more than double in just a year. 

Earlier this month parliament was told that while SABC3 as the broadcaster’s only commercial TV channel is supposed to bring in the money to support the broadcaster’s public broadcasting services (PBS)  side, that it’s become SABC1 that now has to support the crippled SABC3 that saw a content and ratings implosion.

Earlier in September Mathatha Tsedu, interim SABC board deputy chairperson, told parliament that the SABC is unable to do basic maintenance on its dilapidated buildings – unable to fix things like leaking roofs or even broken doors. He said the SABC can only do building repairs if something is “truly life-threatening”.

Mathatha Tsedu told parliament that without another bailout the SABC “will survive” but that the broadcaster won’t be able to fulfil its broad mandate as a public broadcaster.

“It is not going to be possible to transform, modernise and digitise the SABC without an injection from external funding,” he said, adding that without another bailout “we would survive, but just survive”.

R3bn bailout ‘an astonishing amount of money’

The Democratic Alliance (DA) political party’s Phumzile van Damme and a member of parliament says “it is serious disappointing that parliament, and indeed the public had to find out about the R3bn amount of the SABC’s requested bailout in a roundabout manner”, and described the R3bn as “an astonishing amount of money”.

“The DA has on several occasions requested Ayanda Dlodlo to make the SABC’s financial requirements public and to consult parliament on the proposed bailout. However she refused, stating that the amount doesn’t matter”.

“Parliament’s communications committee should have been consulted in the interest of good governance and transparency especially given the financial stress at the SABC,” says Van Damme.

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