SABC spent R2.3bn buying sports rights that brought little returns
The SABC lost R2.3bn on sports rights agreements over the past six years because it overpaid, then failed to make money from broadcasting matches live.
This was revealed by the chair of the SABC board, Bongumusa Makhathini, in an interview with the Sunday Times this week.
Makhathini said the blackout of Bafana Bafana and other national soccer teams would continue until the SABC renegotiated the sports rights agreement with the South African Football Association (Safa), which, he said, did not "make commercial sense".
"The sports rights are overpriced and we are not able to commercialise these sports rights. After you have paid for sports rights, you then need to cover costs for production.
"Take Safa … you'll pay R110m for sports rights, then on top of that you need to add production costs which can run into millions. You need to then sell this product. How many people go to stadiums to watch these games? How many people will be willing to advertise during these programmes? Advertisers are not keen," he said.
Between 2012 and 2018 the SABC spent R1.6bn on rights to broadcast Premier Soccer League matches live. In addition, it spent R522m on production, but received only R466m in revenue.
The public broadcaster paid Safa R462m during the same period for rights to Bafana and other national soccer matches. It spent another R65m on production, but derived only R48m in revenue, resulting in a loss of R479m.
In the same period it spent R269m for Confederation of African Football rights. To broadcast these games cost R14m, but the SABC made only R20m from this, resulting in a R263m loss.
Makhathini said it was not just the responsibility of the SABC to broadcast national teams live. Other free-to-air broadcasters such as e.tv were also obliged, according to law, to carry their share. He said the SABC could fulfil this mandate only if it received more public funding.
"Why is it made to be an SABC problem only?" asked Makhathini. He said regulations on the showing of these matches applied to all free-to-air channels.
"If there is a mandate of this nature [for the SABC] then there must be funding that goes with it."
He said the board was going ahead with a cost-cutting plan that included many retrenchments and renegotiations of all commercial contracts. He said this would happen even if it cost him his job.
Makhathini said the board was under tremendous pressure from what he called "political and commercial interests", driven by those who were opposed to its plan to turn around the struggling public broadcaster. He did not say which politicians were putting it under pressure, or how they were doing this.
"In life you must have things that you are prepared to stand [up] for. If it means being pushed out for standing up for what is right, it's a better exit than me sitting here and trying to be liked and to be popular at the expense of the SABC.
"Whatever I'm doing with my board is not about me but about what's best for the SABC."
The SABC is fast running out of cash. Unless it gets a R3bn government guarantee, it will not be able to pay salaries or honour financial obligations by March.
Makhathini defended plans to retrench 981 permanent staff and not renew the contracts of 1,200 freelancers.
Former communications minister Nomvula Mokonyane has publicly slammed the board for the planned job cuts.
Makhathini said one of the reasons for the cash crisis at the public broadcaster was the arbitrary manner in which salary increases and promotions were made under the previous SABC board and executive team.
"There were salary increases that were arbitrarily done, that were not informed by affordability or the value that the employees had added," he said.
"There are promotions that were given to people that did not necessarily deserve it. There were a number of irregularities that happened.
"At some point we have got to fix what has gone wrong, rectify the mistakes and make sure we put this organisation back on track."
Makhathini said other cost-cutting measures included stopping the practice whereby board members were paid for each meeting they attended. They are now paid only for "scheduled meetings" that fall within the board calendar.
He said the board had also done away with frivolous items such as free biscuits and bottled water for staff, and was now strictly monitoring the printing of documents.
He said the turnaround plan the board had put in place was the only way to save the SABC, which was why he was staking his reputation on it.