Government pledges to keep SABC 'functional and afloat' for election

Communications minister Mondli Gungubele has given the clearest indication yet that the government will once again financially support the cash-strapped SABC, even though he declined to provide the amount likely to be involved this time around.

Gungubele told MPs on Wednesday that it was crucial for the government to keep the SABC afloat, especially with the 2024 elections on the horizon.

“I am not going to say whether there will be a bailout. I will tell you the key issue to us is, whatever happens, the SABC will need to be functional, especially when it comes to the elections. That will have to happen,” he said. “How that happens is a matter with regards to how do we play around with the resources at our disposal and what gaps are there, but the basic principle is that we are working to ensure the SABC stays afloat to carry out its broader responsibilities,” said Gungubele.

He was answering MPs’ questions in the National Assembly on Wednesday, along with other ministers in the economics cluster. 

Among the efforts to deal with the broadcaster’s financial woes, the government is looking at creating a commercial subsidiary through which the SABC could compete in the commercial environment, said Gungubele.

This is partly because about 80% of the corporation’s revenue is dependent on advertising. But for the SABC to be competitive in that space, it has to be freed from certain regulatory measures.

This is among the proposal contained in the yet to be tabled SABC Amendment Bill (Broadcasting Bill).

“It’s against that background that when you look at the bill that’s going to come to the house, we are strengthening the existence of the commercial aspect of the SABC, so that there are platforms which are dedicated to maximising and optimising the audience that SABC has, so that in terms of revenue we do better than we are doing now.”

The state is also revising its contribution to the SABC based on the model that will be tabled in the house, he said, without giving details on the proposed funding model.

The “dream” is to decrease its independence on the state while making sure its public mandate is fully funded, said Gungubele.

 He revealed that his department was following up on how the broadcaster spent the R3.2bn bailout it received in 2019. “We are following the expenditure of the money that has been used to check what percentage is attributable to poor management and what could be attributable to malfeasance.”

The SABC was allocated the R3.2bn in 2019 to fund initiatives outlined in its approved turnaround plan aimed at transforming its financial sustainability status.

More specifically, the funds were intended for settlement of other payables, investments in fresh and compelling content as well as funding long-term capital expenditure projects and partnerships crucial for monetising and commercialising the institution, including all its platforms, said Gungubele.

The investment in content was vital for increasing audiences across all SABC platforms.

As of March 31, the institution had spent about R1.1bn of the allocated R1.2bn from the bailout specifically designated for content investment aimed at driving commercialisation of the platform and ultimately enhancing profitability.

“Unfortunately, investment in content efforts by the SABC did not yield desired results towards the commercialisation of the SABC for profit maximisation.”

The R1.2bn that was allocated to content was used to fund 196 projects across a number of genres, among them drama, entertainment, children's programmes, education and documentaries.

According to the minister, the SABC indicated that it was difficult to commercialise newly acquired content successfully and extract profit from it. The SABC advised that new dramas that were premiered did not meet expectations towards profit maximisation.

Regarding investment in capex projects and their potential to contribute towards profit maximisation, the SABC indicated this would happen only in years to come.

But the newly appointed board has developed a revenue-improvement plan that is expected to protect and attract current and new audiences, to safeguard the current revenue base and to improve financial performance over the short to medium and long term, said Gungubele.

The Sunday Times reported in July that the broadcaster's CFO, Yolande van Biljon, had warned her bosses that the SABC could find itself having to apply for business rescue as its finances teetered on the brink. 

The broadcaster announced more than R1bn in losses for the financial year ended March.