SABC selling land to raise money

The South African Broadcasting Corporation (SABC), through Broll Auctions and Sales, will auction off three pieces of land in Durban Central to raise funds. The auction will take place on 16 October 2024.

The public broadcaster’s financial situation is dire, with the Portfolio Committee on Communications and Digital Technologies calling for a change to the SABC’s funding model, as well as greater support from taxpayer funds.

Broll Auctions and Sales will auction three vacant high-value pieces of land owned by the broadcaster.

They are situated in Stamford Hill in Durban Central, near the Kingsmead Cricket Stadium. Their combined plot size is 8,944 square metres.

The agents say the property is surrounded by hospitals, hotels, shops, and businesses. The area also has a wide variety of residential properties.

“Spanning three erven, the property is well-maintained, with manicured lawns, established trees, and paved walkways throughout,” the listing reads.

It adds that two of the three pieces of land are surrounded by palisade fencing. The combined plot’s zoning is General Business 3, giving any development a maximum height of seven storeys and 80% coverage.

Selling the pieces of land will help the public broadcaster, which is technically insolvent, raise funds as it waits for government to develop an alternative funding model.

The SABC recently tabled its annual public report for 2023/24 in parliament, revealing a loss before interest and tax of R192 million. The report also shows that its liabilities outweigh its assets.

In early September 2024, the public broadcaster said it expects to report a loss of R590 million for the 2023/24 financial year, describing its current budget as “an SABC in financial distress”.

It had reported a loss of R1.13 billion in the 2022/23 financial year, and the Portfolio Committee on Communications and Digital Technologies congratulated the SABC on its improvements.

However, committee chair Khusela Sangoni said the committee supports reworking the SABC’s funding model and asked the public broadcaster to provide alternatives to the current model.

It also supports greater public funding for the SABC.

The SABC’s current funding model relies on advertising revenue and TV licence fees, the latter of which has proved to be a significant challenge for the public broadcaster to collect.

In the 2022/23 financial year, it only received 13% of the R4.7 billion it billed for TV licence fees.

Philly Moilwa, the SABC’s head of policy and regulatory affairs, recently presented an alternative funding model for the public broadcaster before parliament.

He proposed implementing a device-independent household levy that must be paid regardless of whether a household’s residents access the SABC’s services.

Moilwa argued that its content has expanded to various device types, necessitating such a levy. He also proposed that the South African Revenue Service and DStv owner MultiChoice should help collect the fees.

He explained that pro-competitive licence conditions could allow the dominant pay-TV broadcaster to factor the household levy into its subscription prices.

MultiChoice has previously baulked at the idea of collecting tax revenue on behalf of a state-owned competitor, calling it “completely inappropriate and unfeasible”.

It highlighted the problem of potential double-billing viewers if multiple parties are made responsible for collecting the SABC’s levy.

Despite being loss-making since the 2014/15 financial year, the public broadcaster has high hopes for its financial future and expects to report a profit of nearly R1 billion in March 2028.

While it couldn’t provide details on its financial turnaround plans, the broadcaster told MyBroadband it plans to reduce its R590 million loss expected for the current financial year to a R243 million loss in the 2025 financial year.

“The SABC has a commercial strategy and corporate plan geared towards the financial recovery of the entity,” it said.

“Our key priority initiatives to protect current revenues and drive sustained growth are subject to funding.”

It added that the trend of forecasted losses for 2024 and 2025 is a clear example of the SABC’s focus on clawing back its previous losses.