SABC expects profit of almost R1bn in 2026/27

The SABC expects to report a profit of almost R1bn for the first time in more than five years in the 2026/27 financial year, the National Treasury has revealed. 

This, as the public broadcaster aims to double the number of users on its online video streaming platform to 1-million by 2027/28 as part of a broader effort to commercialise its digital properties. 

The SABC, which has operated at a deficit for more than a decade, has been allocated R707.4m for its “various activities”, according to the Treasury’s Estimates of National Expenditure which gives specific details on how money will be spent in the national budget.

Rivals MultiChoice funds its operations mainly through subscriptions and eMedia mostly through advertising. 

In addition to allocations from the government, the SABC takes in money from TV licences. All these entities — including Talk Radio 702 owner Primedia and African Media Entertainment — compete for advertising revenue.

This comes as finance minister Enoch Gondongwana tabled the year's national budget after a failed attempt last month. 

“The corporation will focus on addressing its financial sustainability over the medium term. It has developed a strategy that details clear actions on new commercial capabilities to deepen its digital transformation to take advantage of new platforms and emerging technologies,” said the Treasury. 

“This will be done through the increased commercialisation of the recently revamped over-the-top platform known as SABC+, for which the broadcaster aims to have 1-million registered users by 2027/28; and social media platforms such as TikTok and WhatsApp channels to target the corporation’s growing online audience.”

SABC+ has 500,000 users. This is expected to rise to 750,000 in 2026/27, then to 1-million in 2027/28. 

The broadcaster expects to derive 78.3%, or R17.6bn, of its revenue over the medium-term expenditure framework (MTEF) period through advertising and “other commercial activities”.

Total revenue is expected to increase at an average annual rate of 6.2%, from R6.5bn in 2024/25 to R7.8bn in 2027/28, “mainly from the collection of licence fees and advertising revenue”.

On the expenditure side, labour accounts for the largest portion at an estimated 38.9%, or R8.2bn, of projected spend. This is expected to increase at an average annual rate of 4.8% from R2.5bn in 2024/25 to R2.8bn in 2027/28. Goods and services accounts for 38.2% of expenses, “mostly for signal and broadcast costs and programming, film and sports rights”.

Total spend is expected to increase at an average annual rate of 1.3%, from R6.7bn in 2024/25 to R7bn in 2027/28.

Overall, the SABC expects a loss of R27.5m in 2024/25, then a profit of R906.9m in 2026/27, then another R783.8m surplus in 2027/28. The expectation for a surplus appears to be driven by higher revenue at the broader as expenses will remain relatively flat over the period. 

Even then, these are only estimates. In previous years the broadcaster has budgeted for a surplus only for it end up in a deficit position. 

“Despite necessary initiatives to optimise costs, the corporation will increase investment in activities that will contribute to financial sustainability, such as content acquisition, the filling of critical vacancies and training and upskilling to improve services; and seek to increase spending on broadcasting, which will bring in additional advertising revenue,” the Treasury said. 

In February, parliament welcomed measures against Big Tech to correct the imbalance imposed on SA’s media industry, recommended by the Competition Commission after an
18-month investigation.

The government said the measures would bode well for the SABC. 

The commission released a provisional report on Monday recommending that Google compensate the media industry to the value of R300m-R500m annually for a three- to five-year period, which could boost SA’s ailing traditional media houses, whose revenues have dried up over the past decade due to the rise of technology platforms and shifting consumer behaviour.

The commission has also recommended that YouTube, owned by Google, improve the ability of the media and broadcasters, including the SABC, “to monetise their content on its platform through increases in the revenue share to 70% and active promotion of higher-value direct sales by the media”, the commission said.

gavazam@businesslive.co.za