For the first time, the public broadcaster has admitted to being in the red to the tune of R784-million. But acting group CEO, Gab Mampone, says it will “not be liquidated”. He addressed the media at a press conference in Johannesburg today.
This comes after a liquidation application was lodged against the SABC, at the Johannesburg High Court, by lawyer Barry Aaron. The parties were set to meet in court today. Aaron has, however, withdrawn the application based on an understanding that the R450,000 owed to him by the public broadcaster will be paid.
Chief financial officer, Robin Nicholson, admits that overhead costs at the public broadcaster were not “well handled” in recent months. He attributes R400-million of the deficit to a general decline in advertising in the media market. “Our air-time sales were down significantly due to the change in the (economic) environment. Audience performance for SABC3 are down over the past seven months and sports revenue is a long way from where it is supposed to be.
“We are now focused on aggressive cost and asset management, while revenue growth is pursued.”
Mampone says “the days of SABC funding itself are long gone”. SABC management met with Treasury yesterday, “not for a rescue” but to discuss short-term liquidity issues. “We have not yet made a specific request about the funding process to the treasury or the DOC (Department of Communications),” he said.
Kanyisiwe Mkonza, chairperson of the SABC board, says the funding mechanism “poses a huge problem”. Some 18% of the SABC’s revenue comes from public funding; approximately two percent comes from government and the rest comes from commercial ventures and advertising. A request has been made to government to increase TV licence fees, which increased only twice in the past 11 years.
Mampone says the board and management are “now actively involved” in dealing with the corporation’s deficit. “We are aware that we are faced with a number of challenges, but we have a clear, concise plan to turn the business around.” Gloria Serobe, chairperson of the board’s finance committee, reiterates that while management is concerned, they are “not in crisis mode”.
The SABC is implementing an Austerity Plan, which includes freezing vacant posts, re-prioritising capital structures and better management of the liquidity of the organisation. Nicholson says retrenchments of permanent staff are not on the cards, but “we are engaging with the board about a reorganisation of the structure”.
The public broadcaster hopes to make a profit of R55-million before tax by 2010.
