South Africa

SABC facing financial collapse

The South African Broadcasting Corporation (SABC) will collapse financially if it does not receive an urgent cash injection from the government and fundamentally change its operating model. 

William Bird of Media Monitoring told Newzroom Afrika that the state-owned broadcaster needs additional funding from the government to avoid entering into business rescue.

The SABC is in extreme financial distress and could be forced to apply for business rescue, according to the group’s chief financial officer (CFO).

The Sunday Times reported that the broadcaster looks set to announce a loss of more than R1 billion for the financial year ending March 2023.

Group CFO Yolande van Biljon said it could be liquidated if the group cannot sort out its financial situation.

Bird said business rescue would not be a good idea for the SABC as it would create further challenges for the company without solving the underlying issue of it simply being uncompetitive in the digital environment. 

The SABC operated without a board for six months of the last financial year due to the government lacking any urgency in appointing a board. 

The government also botched the turn-off of analogue TV sets in South Africa, which caused the SABC to lose 40% of its audience. 

“This is a perfect recipe for disaster,” said Bird. “Most of the blame, almost exclusively, should be laid at the government’s door.”

However, these short-term factors mask the real issues at the state-owned broadcaster. 

The SABC is expected to operate in the 21st century according to a model that has remained unchanged since the 1990s. 

“It is simply no longer fit for purpose. It is unable to operate in a digital environment.”

Communications Minister Mondli Gungubele

It was previously given a R3.2 billion loan guarantee from the government and is now asking for more. 

Bird said the government has no choice but to provide an urgent cash injection into the business, as without this, the company would collapse financially. 

This cash injection must accompany significant policy changes to the SABC’s operating model. 

In particular, the funding of the SABC needs to change with South Africans no longer paying their TV licences. 

Daily Investor reported that South Africans owe R44.2 billion in outstanding TV licence fees.

Communications Minister Mondli Gungubele revealed that 9.6 million South Africans had not paid their TV licence fees.

Overall, 2.2 million licence holders managed to settle their television licence fees in full or in part against a known database of 10.3 million television licence holders.

The SABC billed R4.4 billion in TV licences in the last financial year but only received R788.4 million.

“The licence fee collection rates indicate an evasion rate of 82%,” the SABC said in its latest annual report.

The situation became so desperate that the SABC wants to scrap TV licence fees in favour of a broadcasting household levy.

SABC board chairperson Bongumusa Makhathini added that it is crucial for major players in the industry, like MultiChoice, to assist with collecting the levy.

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