The SABC office in Auckland Park, Johannesburg. Picture: SUNDAY TIMES
The SABC office in Auckland Park, Johannesburg. Picture: SUNDAY TIMES

The SABC, which suffered a net loss of R622m for the 2017-2018 financial year is now ‘‘technically insolvent’’ and unable to fulfil its financial obligations, CEO Madoda Mxakwe said on Wednesday.

‘‘If we were a private company, we would have been recapitalised,’’ he said at a briefing with reporters in Johannesburg, on the dire financial situation at the public broadcaster.

He said the threat of commercial insolvency was also increasing. In 2017, the SABC found itself in deep financial trouble. There were fears at the time that it would collapse should it fail to get a government guarantee of R1bn.

In the 2016-2017 financial year, the SABC recorded a loss of R977m, and R411m in 2015-2016.  

The huge losses were attributed partly to axed COO Hlaudi Motsoeneng’s controversial 90% local-content policy, which the interim board has since ended.

On Monday, the SABC announced that it would proceed with retrenchments in a bid to cut costs. It was looking at cutting 981 of its 3,376 permanent employees and 1,200 of the 2,400 freelancers.

Mxakwe said on Wednesday that the SABC's wage bill was R3.1bn, and its total expenditure R3.5bn. ‘‘This is not sustainable,’’ he said.

The total cost to company of the SABC's three executives was R12.5m, which he said was only 0.5% of the wage bill. The total cost to company of the group executive committee was R25m, and cost of freelancers was R500m per year.

SABC CEO Madoda Mxakwe. Picture: SUPPLIED
SABC CEO Madoda Mxakwe. Picture: SUPPLIED

Mxakwe said the SABC had five layers of management, which amounted to 495 managers over all, at a cost of R630m. This escalated to R1bn when junior managers were included.

While the SABC's board maintains it has no choice but to lay off hundreds of workers in order to remain sustainable, communications minister Nomvula Mokonyane and various MPs are strongly opposed to the job cuts.

SABC COO Chris Maroleng said looking at the fit-for-purpose structure of the public broadcaster, it was quite clear that the wage bill was “at a place which does not really allow us to benefit” from innovations in cost containment and revenue maximisation.

“It is essential that we deal with this issue that causes a continuous … hampering on the progress of the SABC from a financial sustainability perspective and also from an operational perspective,” he said.

SABC CFO Yolande van Biljon said total expenditure incurred in 2017-2018 financial year was R7.269bn compared to budget of R7.279bn.

For the 2018-2019 mid-year performance, the SABC’s year-to-date revenue was R3.2bn, representing an underperformance of R293m against the R3.5bn budget.

The corporation's net loss year to date was R323m.

The SABC's cash balance was R135m, she said.

Chief executive of HR Jonathan Thekiso said the SABC had already approached the Labour Court to recover money that was spent on ad-hoc increases, irregular appointments and promotions declared invalid as first identified in the public protector’s 2014 report into governance failures at the public broadcaster. This amounted to about R60m.

In September, the DA said it had submitted a Promotion of Access to Information Act (Paia) application to get access to documents showing exactly how much top management at the SABC earned.

“We have, today, submitted a Paia application to the SABC requesting the full salary packages of the public broadcaster’s group CEO‚ COO and CFO‚” the DA’s Phumzile van Damme said in a statement.

“The Paia aims to promote transparency‚ accountability and effective governance of all public bodies, like the SABC. The grounds for refusal of information in the act do not apply to the SABC in this instance. We trust that the public broadcaster’s management will reveal the requested information in the spirit of promotion of transparency‚ accountability and effective governance at the SABC‚ as they often proclaim to be adherents of‚” she said.