Media experts working to ensure the SABC remains viable
SABC CEO says its cash flow is depleted so it cannot honour payments to service providers — nor guarantee salaries at the end of March
A group of media experts are working with National Treasury officials to ensure the troubled SABC remains viable, communications minister Stella Ndabeni-Abrahams said on Wednesday.
The minister didn’t provide further details during a question and answer session in parliament.
The public broadcaster, which is the main source of news for thousands of citizens, is on the brink of collapse with company executives warning this week that it will be unable to pay salaries unless a request for a government guarantee is finalised.
“A group of media experts is working with the Treasury to ensure the SABC is able to remain sustainable and generate income,” Ndabeni-Abrahams said during a session in parliament on Wednesday. She had confirmed on Tuesday that the National Treasury had agreed to grant SABC interim relief. The amount to be granted was yet to be confirmed, the minister said then.
Mxakwe said that government funding will be used to recapitalise the SABC.
Briefing parliament’s communications portfolio committee on Tuesday, SABC CEO Madoda Mxakwe said the SABC’s cash flow is depleted so it cannot honour payments to service providers, adhere to its committed contracts, or commission local productions.
“The SABC cannot guarantee that it will be able to pay its employees’ salaries at the end of March 2019. Should this crisis not be addressed as a matter of urgency, the SABC will be unable to operate and the ‘black-on-air’ scenario is a real and highly possible threat,” Mxakwe said.
He said several major content providers of key programming, including soapies, have ceased production and are retaining content until outstanding payments have been received. The SABC relies heavily on these programmes to generate advertising revenue and the inability to invest in content negatively affects the financial sustainability of the SABC and the local production industry, said Mxakwe.
In December 2018, the Companies and Intellectual Property Commission (CIPC) issued a notice to the SABC in terms of the Companies Act to show cause regarding alleged reckless trading or trading under insolvent circumstances.
The SABC’s projected figures show factual insolvency by March 31 2019. Forecasts indicate that the public broadcaster will end the financial year with a net loss of R568m against a budgeted loss of R288m, and trade and other payables are expected to be R2bn.
The SABC sank into a deeper crisis late in 2018 when four directors resigned, leaving the board without the quorum required to make decisions. They quit after a scathing letter by Ndabeni-Abrahams in which she accused the non-executive directors of not acting in the best interest of the public broadcaster as they pressed on with retrenchments.
The SABC has since halted the retrenchments pending a skills audit. Parliament hopes to fill in the vacant board positions before the end of March.
Mxakwe told MPs that cost-containment measures are in place and, year to date, the SABC has realised savings of R785m. “This amount is unfortunately not enough to [alleviate] the current and projected losses of the corporation. Additional cost-saving initiatives are being reviewed for implementation,” he said.
The SABC spends more than R3bn a year on the salaries of its 3,000 permanent employees.