Relook funding at SABC


And so the SABC is technically insolvent. Its CEO Madoda Mxakwe said last week that the public broadcaster had suffered a net loss of R622m for the 2017-2018 financial year and is unable to fulfil its financial obligations. For the previous financial year, the SABC had recorded a loss of R977m‚ and R411m in 2015-2016.

Such consecutive losses suggest to me the broadcaster is at ICU if not on its deathbed already. I shall come back to who presided over this mess. For now, let me state that it never stops to amaze me how government has always been ready to prop up the South Africans Airways with billions of rand but has never shown similar enthusiasm when it comes to the SABC.

Of course, I do not encourage the treatment of the fiscus – ultimately the taxpayer – as a bottomless pit of money. State owned entities , especially those that are not necessarily fulfilling a public or social mandate, must sustain themselves from their commercial operations.

But I would have thought that when it comes to fulfilling a public mandate, SAA pales into insignificance compared to the SABC. The public broadcaster is the only source of news, current affairs, educational content and entertainment for millions of South Africans, especially the poor who cannot afford subscription to pay television. The public broadcaster provides, or ought to provide, information that make it easy and possible for citizens to function in a democracy.

Surely, between the funding of SAA and the SABC, the latter ought to be prioritized – unless, of course, one is not aware of the unique role SAA plays in deepening our democracy. 

Apart from the operational issues at the SABC, for example alleged over-staffing and a top heavy management structure, there seem to be a problem with its funding model. The SABC fulfils a public mandate and it cannot be funded through commercial revenue streams in the main. Such a formula has the inherent risk of content being informed by commercial considerations rather that what is in the public interest. Commercial revenue can be part of the funding mix but cannot be the main component.

In countries like Sweden, Norway and Denmark public broadcasters do not earn any commercial revenues. Rather, all of their income is derived from public funding sources, including television and radio licence fees levied on households. Has the time not come for South Africa to review the funding model of the public broadcaster?

Now for the mess the broadcaster is in. It is a matter of public record that the executive management that was there before the current one mismanaged the entity in a spectacular manner. Previous boards aided the dwindling of the SABC’s fortunes. Some previous board members were drawn into factions within the public broadcaster and in the process failed to hold executives who were part of “their” factions accountable.

One must also add that those board members and executives who has brought the SABC to this mess must be hold accountable for their actions even if they are no longer there. In walks new executives and after their analysis they tell us the public broadcaster is over-staffed and can do without some 1 000 permanent employees and 1 200 employees. It’s not palatable stuff but I respect them for telling us what we may not like to hear. But these are hard-nosed corporate functionaries who have been hired to turn around the SABC. I would be worried if they tried to mollycoddle the public, politicians and SABC staff.

Yes, laying off about 2 200 workers in these tough economic times is not an easy and it is not fair for the employees who are now the victims of a situation they did not create. Politicians would be sensitive about that. But then, if the SABC cannot retrench the government must be prepared to come to the party financially. Looking at commercial revenues to sustain the SABC is not sustainable. In fact, it is highly naive. Advertisers do not have an obligation to prop up the broadcaster. They may have good intentions but they themselves are under pressure in these tough economic times. Therefore, I would not be surprised if they have revised their advertising budgets downward.

Where then, does the SABC get the money to carry 2 200 surplus employees? It is good of government to baulk at the idea of mass retrenchments. It shows that it cares. But what is it putting on the table? What is the SABC staff putting on the table? Would, for example, the staff be willing to forgo increases in the next few years in order to save some jobs?

Solutions can be found if all of the parties involved can think outside the box and be willing to abandon their entrenched positions. The burden of saving jobs and raising money at the SABC cannot be left to the new Executives only, our government need to intervene and intervene decisively. In conclusion Government must develop systems that can stop this kind of abuse to our state own entities.

Comment by Ps Ray McCauley


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