The SABC has lost R6.19 billion in 10 years — and TV Licences are not its biggest problem

The SABC has lost R6.19 billion in the past decade, an analysis of the broadcaster’s annual financial results shows.

That is despite the public broadcaster receiving a taxpayer-funded bailout of R3.2 billion in recent years.

SABC chairman Khathutselo Ramukumba recently told Parliament’s Communications and Digital Technologies portfolio committee that the broadcaster incurred what appears to be a record R1.1 billion loss in the 2022/2023 financial year.

The broadcaster is only expected to announce its full annual results publicly later this month, so the exact amount will only be known at that time.

According to the SABC’s published annual results and available online news reports, a R1.1 billion loss would be the broadcaster’s biggest since at least the start of the century.

Khathutselo Ramukumba, SABC board chairman

While the SABC’s mandate is to keep the public informed and not turn a profit, its severe losses have turned it — alongside several other state-owned entities — into tax burdens for the citizens it is meant to serve.

In the early 2000s, the broadcaster actually grew its profits — reaching as high as R383 million in the 2005/2006 financial year.

But a rise in wasteful expenditure coinciding with the early years of President Jacob Zuma’s tenure saw that profit swing to a loss of R910 million by 2008/2009.

Although it slightly improved that to a R214 million loss one year later, it was only after a R1.47 billion government bailout that the broadcaster would briefly turn a profit again.

In the 2011/2012 and 2012/2013 financial years, the SABC made R344 million and R330 million in profit. However, by the following year, it had again swung to a loss of R652 million.

Since then, the loss has only ever dropped below R400 million on one occasion — in the 2021/2022 financial year — following substantial job cuts and a R3.2 billion bailout.

The graph below shows the annual losses incurred by the SABC over the past ten years.

There are numerous factors contributing to the SABC’s financial struggles.

It could be partially attributed to and exacerbated by the rise of online streaming services and growing preference among traditional TV viewers for private broadcasters like DStv and eMedia.

As a result, it has lost viewership, meaning it can’t derive as much revenue from advertising as before.

Between 2013/2014 and 2015/2016, the SABC’s advertising revenue increased from roughly R5.2 billion to R6 billion. By the 2021/2022 financial year, it had nearly halved to R3.08 billion.

The broadcaster has warned its advertising revenue for the latest financial year will again drop from 2021/2022.

Had the SABC maintained its previous advertising revenue or succeeded in curbing the decline to around half of what it was, it would have posted profits over the past few years.

The graph below shows how the SABC’s advertising revenue changed between 2013/2014 and 2021/2022. The revenue for 2022/2023 must still be announced.

Another contributing factor — although less significant than the impact of advertising — is a drop in TV Licence revenue.

In the 2013/2014 financial year, the broadcaster collected R928 million in licence fees. That has come down to R815 million in 2021/2022, a reduction of 12%.

Over the same period, the SABC’s TV Licence evasion rate climbed from around 70% to 87%.

Stated differently, the number of existing TV Licence holders paying their dues has decreased from 30% to 13%.

In feedback given to Parliament in 2013, the SABC said that about 25% of households (3 million) were paying their TV licences regularly while a further 33% (4.5 million) paid in “bits and pieces”.

At that time, around 30–35% (3.3 million to 3.85 million) of TV licence holders were estimated to be evading their TV licence payments.

In the 2021/2022 year, 81.7% (9.2 million) of the estimated TV licence holders were not paying.

According to Ramukumba’s update to Parliament, the licence fee evasion rate stood at 87% in the 2022/2023 financial year.

Now read: SABC slaps paying TV Licence holders in the face

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The SABC has lost R6.19 billion in 10 years — and TV Licences are not its biggest problem