Chaos at the SABC — Royalty cuts planned while bosses face the music

The SABC plans to slash the fees it pays to actors and writers for rebroadcasts and will eventually refuse to pay these professionals altogether, respected broadcasting journalist Thinus Ferreira reports for City Press.

Currently, actors receive 25% of their original payment if a rebroadcast happens during prime time and 15% for all other repeats.

Under the new plan, the SABC wants to allow actors to be paid a maximum of three times — 25% for the first rerun, 14% for the second, and 10% for the last.

Writers get a different deal. They currently earn 50% for the first repeat and 25% for each repeat after.

However, the SABC would amend this to 50% for the first broadcast, 25% for the second, and 15% for the third — with no further payment for subsequent reruns.

It is important to note that the SABC’s financial woes mean it increasingly relies on reruns of old shows as it cannot afford new programming.

Executives suspended

The manager reportedly behind the changes to the above rerun payment structures is also one of three senior SABC staff members implicated in hiding a multimillion-rand advertising share agreement within a contract.

Note: These three individuals are referred to as “the manager,” “the decision-maker”, and “the executive” below.

The contract was regarding the management of its SABC Plus platform and was originally awarded to TelkomOne in 2022, with Discover Digital overseeing the implementation of the specifics.

However, TelkomOne walked away from the deal and recommended that Discover Digital take it over.

According to a City Press report, the SABC executive committee constructed and approved a new business plan on 7 November 2022. This business plan said that the SABC must retain 100% of all revenue generated by its SABC Plus. Discover Digital was to be paid R35 million annually.

However, when it came to writing the official contract, the decision-maker allegedly included a clause that would entitle Discover Digital to be paid 7.5% of all advertising revenue generated by SABC Plus.

On 16 November 2022, when the contract was first drafted, the SABC’s legal team questioned the clause, and according to an investigation by legal firm Werksmans, the decision-maker and Discover Digital managing director Stephen Watson responded by saying the clause was, in fact, applicable to the agreement.

The contract was then allegedly signed on 17 November 2022, with the clause included, contradicting the directive given to the decision-maker by the executive committee ten days earlier.

At a meeting with the executive committee the following day, when questioned, the manager allegedly misrepresented his role in including the clause. He claimed he had questioned the clause but was unaware of the final decision — but Werkmans reportedly contested this.

“During the contract drafting phase, [the manager] was copied in emails between the legal [department], [the decision-maker] and Discover Digital. Evidently, he was privy to the discussion with respect to the 7.5% ad insertion clause in the contract and failed to query its inclusion as it contradicted the approved business plan,” said Werksmans.

The third individual, the executive, also allegedly misrepresented his knowledge of the clause at the same meeting.

“He was aware of the 7.5%, as a number, but could not join the dots on what it was for. His response was tantamount to withholding vital information,” Werksmans reportedly stated.

The manager and senior decision-maker have been suspended, while the executive reportedly resigned upon learning of his impending suspension.

MyBroadband asked SABC to comment on both controversies, and a spokesperson provided the following response:

“The SABC is as a matter of principle not at liberty to discuss matters pertaining to an employer-employee relationship in the public space.”

Discover Digital responds

MyBroadband contacted Discover Digital managing director Stephen Watson to hear his company’s side of the story, and he provided the following statement.

It is deeply disappointing that City Press failed to approach us for comment prior to publishing its article.

All Discover Digital’s Advertising Video on Demand and Adserver service contracts — including its contract with the SABC — contain an advertising revenue share clause.

This is to cover the associated technology, resource and delivery costs.

The revenue share clause had also already been included in the contract wording at the preceding stage, when TelkomOne had been awarded the contract.

Post launching the SABCPlus service, [the decision-maker] alerted us to their omission of these costs in their internal business plan submission and accordingly that the plan had to be corrected to specifically reference these costs, and for the updated plan to be resubmitted to the SABC’s Executive Committee and Board of Directors for approval.

Discover Digital decided not to bill the SABC for its part of the agreed revenue share until such time as the business plan had been corrected and internally approved by the SABC.

By the time the one-year term of our agreement with the SABC had matured in November 2023, the proposed approval and ratification of the revenue share clause had not yet occurred.

Over this period the SABC for several months had been without a Board of Directors.

Accordingly, Discover Digital did not bill for, nor did it receive any funds from the SABC pursuant to the revenue share clause.

Discover Digital is willing to co-operate in any SABC investigation into the issue, whether through Werksmans Attorneys, the SABC’s own internal audit team or the Auditor-General.

To date, however, we have not received any enquiry or request for comment or to supply supporting documentation.

SABC Plus

Amid this drama, the SABC has told MyBroadband that its SABC Plus platform has grown its subscriber base to roughly 600,000 people a year after its relaunch.

It peaked at approximately 210,000 concurrent viewers during the Rugby World Cup Final between the Springboks and the All Blacks.

Perhaps owing to the pressure of handling such volumes, the SABC migrated the service to a new technology system on 1 December 2023.

“This update underscores the SABC’s dedication to continue providing audiences with an optimised and enriched SABC+ experience,” said the SABC in a statement.

“This will ensure that in future there is an enhanced and more robust digital content delivery for our valued viewers,” it added.

MyBroadband noticed the following changes between the old and new systems:

• The primary interface seems less cluttered, with clear divisions between different categories and a new, bolder font.
• The home page on the web-based platform categorises the SABC’s free-to-air channels by TV Channels, News, Sports, and Radio Stations.
• The top bar of the website also lets users jump between Home, TV, Radio, Catchup, Games, and a Manage Your TV License section.
• On the new mobile app, users are first presented with the option to stream TV or Radio. From there, they can select their preferred live channel or station to stream.
• Video playback quality increased from 720p to 1080p on both web and mobile.
• There is support for picture-in-picture mode.

The SABC said it would continue implementing new features and modifications to the service post-migration.