How the SABC will spend its bailout money

The SABC confirmed to MyBroadband that it has received the final R1.1-billion payment of the R3.2-billion bailout it was allocated by the government last year.

The SABC received the initial R2.1 billion in October 2019, with the remaining R1.1 billion to be transferred once the SABC had met a number of conditions set by the National Treasury.

Treasury confirmed in February 2020 that the SABC was expected to get the remaining R1.1 billion by the end of March 2020.

“The SABC has ensured that the money received is used in line with the key priorities, as outlined by the board, National Treasury, and the Department of Communications and Digital Technologies,” said an SABC spokesperson.

The SABC added that these key priorities include:

  • Paying the SABC’s creditors.
  • Investment in content acquisition.
  • Maintenance of the SABC’s infrastructure and critical broadcast equipment.

“It is also worth noting that the SABC holds a monthly monitoring meeting with Treasury and the Department of Communications on the utilisation of the bailout funds,” the SABC added.

Experts told MyBroadband that the R1.1 billion is absolutely necessary to ensure the SABC can survive.

“Historically, the broadcaster has been battling to meet its financial commitments, and at the end of its 2019 financial year the corporation was technically insolvent – failing to make payments to vendors, creditors, as well as content providers,” said Africa Analysis analyst Nozi Dikgale.

Dikgale added that the coronavirus pandemic will cause the SABC to incur additional costs relating to COVID-19 compliance.

“As much as bailouts have been granted with little basis and no improvement before, the SABC needs the resources and is fulfilling an essential service,” agreed director at Media Monitoring Africa William Bird.

South African National Editors’ Forum executive director Kate Skinner echoed this assessment, and argued that the SABC has done a good job since former COO Hlaudi Motsoeneng left the broadcaster.

“A number of urgent debts needed to be paid. Since then the new management team has turned the institution around, although of course, things are still difficult,” said Skinner.

Bird added that if the COVID-19 crisis had not taken place, the SABC would have been well on its way to financial sustainability.

However, Dikgale was less complimentary of the SABC’s performance in the lead-up to the coronavirus crisis.

“Continued fragmented audiences leads to a decline in audience numbers, as a result some of the SABC channels, i.e SABC 3, continue to lose viewership ratings,” said Dikgale.

“For as long as the broadcaster fails to successfully implement its ongoing turnaround strategy and reinvent itself during these competitive times of media digitisation, I am afraid the situation will remain unchanged or even worsen in the future.”

COVID-19

Bird cautioned that the COVID-19 crisis is likely to hurt the SABC significantly.

“With broadcasters saying they have lost up to 60% revenue and with our economy being in recession, I really doubt the SABC will be able to operate and meet its public mandate conditions without serious cuts to their operations,” he said.

Skinner agreed, adding that some of the SABC’s usual programming had to be displaced by COVID-19 programming, which will also have had an impact on its advertising revenue.

“But my sense is that this management team will be putting measures in place to manage the institution’s finances,” said Skinner.

“One of the really difficult issues that they will need to look at is staffing issues, but as SANEF has stated, we are hoping this will not impact the SABC’s newsroom capacity.”

The SABC has projected a revenue shortfall of R2 billion due to its obligation to broadcast certain content during the COVID-19 pandemic, reported the Sunday Times.

“It said the shortfall was the result of cancelling programmes that bring in millions of advertising money,” added the report, and as a result the SABC will have to ask the government for more money.

The SABC, however, denied this and said it has not requested any additional funding. It also has no meeting scheduled with the government to ask for additional funding, it said.

Salary increases

The news of the R1.1-billion payment comes amid criticism of the SABC for giving its staff salary increases which are above inflation.

The state-funded broadcaster has given increases of between 5%-6%.

Government sources said the move was “shocking” and that the National Treasury would not be pleased. One source said the SABC will also “likely return to government with a begging bowl within months.”

The SABC confirmed the salary increases and said they were part of a three-year agreement with employees.

This agreement was entered into with labour unions before the lockdown, said the SABC, noting that the bailout money from the government was not used for the increases.

Now read: SABC gives “shocking” salary increases to staff

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How the SABC will spend its bailout money