No more bailouts — the SABC’s big turnaround plan

The South African Broadcasting Corporation (SABC) has a five-year turnaround plan that is based on the state-owned enterprise no longer needing government funding.

This was revealed by the SABC’s chairperson, Khathutshelo Ramukumba, in a presentation to Parliament’s Portfolio Committee on Communications and Digital Technologies.

Ramukumba admitted that the assumption that the SABC could generate enough revenue on its own to fund its operations was ambitious and optimistic.

The plan envisages aggressive revenue growth of 28% to R6.4 billion in 2024/25, based on a 15% increase in advertising revenue, a 28% rise in sponsorships and a 19% increase in TV licence income.

SABC CFO Yolande van Biljon said this was a “tall order” as the public broadcaster could not invest in the content necessary to attract the audiences required by advertisers.

In 2022/23, the SABC posted a loss of R1 billion and projected net losses of R590 million in 2023/24, R242 million in 2024/25 and R27 million in 2025/26 before generating a profit of R907 million in 2026/27, provided the corporate plan is successful.

This bold plan comes at a time when the SABC is insolvent and faced day zero with a total blackout of its radio and TV services last year.

Ramukumba said three months after they came into office, they received an advisory from their management team that the SABC faced ‘day zero’ in the next six months.

Day zero included employees not being paid and the state broadcaster risking a blackout on its radio and TV broadcasts.

The SABC board developed a short-term strategy intervention to avoid this situation and presented it to the minister and the Communications Department.

He said that although they had failed to implement everything in their short-term strategy, they avoided day zero and a complete blackout.

Ramukumba added that while the SABC continue to pay salaries each month, it remains “on the edge”.

“We had to defer expenditure programmes — some very critical to ensure the continued broadcasting services of the SABC,” he said.

Despite the ambitious plan to become self-funding, Ramukumba said the national government should still fund the SABC to fulfil its public service mandate, which costs around R2 billion a year.

The broadcaster is mandated to inform, educate and entertain citizens in all official languages.

Ramukumba said the government should also continue to fund the SABC because of the widespread nonpayment of TV licences, which is estimated at R44.2 billion owed to the broadcaster by 9.2 million account holders.

Mapulane said in November 2023 that the SABC was worse off now than before it received a R3.2 billion bailout from the government.

“You will recall we supported the turnaround plan. It was implemented with the hope it would turn around the fortunes of the SABC, but the turnaround plan never turned the finances of the SABC,” he said.

“We are back to where we were, if not in a worse position than when we started with a bailout.”

Mapulane also revealed that the SABC had requested R1.5 billion in additional funding from the National Treasury, which was rejected.

This article was first published by Daily Investor and is reproduced with permission.