The SABC reported a R411m net loss for the 2015/2016 financial year on Thursday, but there is far worse news regarding the broadcaster’s financial situation.
The Sunday Times reported that the first five months of the current financial year points to a financial disaster, with the broadcaster bleeding money.
According to the Sunday Times report, the financial situation at the SABC deteriorated dramatically, and that it is running out of cash.
Citing confidential financial documents, the newspaper said the SABC is trying to hide the following issues from the public:
- In the past five months, the SABC has lost R496-million, more than its total loss in the last financial year.
- At the end of July, the broadcaster only had R245-million in the bank, far less than treasury’s requirement of R650-million.
- The SABC’s audience ratings declined from 49.3% in March to 47.4% in August, much lower than their target of 52%.
- TV license fee collections are declining.
In response to these figures, SABC spokesperson Kaizer Kganyago told the Sunday Times that their CEO James Aguma “made it clear that the SABC is not insolvent”.
SABC’s massive loss in last financial year
The SABC reported a R411 million net loss for the 2015/2016 financial year on Thursday, an increase from the previous year when it posted a loss of R395 million.
“I know some expected the losses to be in the billions. I am sorry to disappoint,” Aguma said.
Aguma attributed the current loss to the fact that the SABC had to cover events of national importance, including former president Nelson Mandela’s funeral, and the Rio Olympics.
Covering Mandela’s funeral cost a “handsome sum of money”. Reporting on such events provided a huge social return on investment, but a negative financial return.
Other factors contributing to the loss were that it got less than 3% of its funding from government, growth in post-retirement service costs, and the impact of tax adjustments arising from previous years.
He said the broadcaster’s annual salary increases had been above the norm. It used private sector wage increases as its benchmark.
Aguma said even when there is no revenue, the SABC must still broadcast. “Despite this loss, we still have cash and have a net asset position. There is no creditor or employee who has not been paid,” he said.
Huge salary for Hlaudi Motsoeneng
Former SABC COO Hlaudi Motsoeneng received a big salary increase – of almost half a million rand – from R3,784,000 to R4,197,000 during the 2015/16 financial year.
Motsoeneng was the highest paid executive at the SABC last year, beating even the CEO.
The Democratic Alliance said it will request that an investigation into why and how Motsoeneng’s salary was increased be included in the anticipated parliamentary inquiry into the SABC.