In 2008, then SABC CFO Robin Nicholson warned in his letter in the broadcaster’s annual report that employee numbers and costs were running out of control. Describing the level of employee cost growth as “problematic”, Nicholson said any “major cost management strategy” at the SABC “will have to address a continued increase in headcount costs”.
At the time, Dali Mpofu was the CEO, the SABC was seeing growth in revenue and profit, and the major concerns were whether the public broadcaster would be ready in time for the switchover to digital television and the Soccer World Cup.
Fast-forward a decade, characterised by a revolving door of executives and board members and millions in golden handshakes, and the chickens have come home to roost.
The SABC is getting ready to retrench an estimated 981 people, equal to about 30% of its permanent workforce of 3,376, and half of its 2,400-strong freelance team. By doing this, the broadcaster hopes to save R440m a year, excluding the cost of the freelancers.
Yet even this jobs bloodbath will be insufficient to get the SABC back onto a solid financial footing. The reality is that the SABC is bankrupt, unable to pay its debts. If the government wasn’t its shareholder, the microphones would’ve long been switched off.
Its total comprehensive loss for the year — a number which includes the actuarial losses on its pension fund and post-employment medical aid commitments — was R1.19bn in the 2018 financial year and R603m in 2017. In the current financial year, which started in April, the net loss to date is R323m.
In his letter in the 2018 annual report, new board chairman Bongumusa Makhathini made no bones about how we got here. In unusually scathing language for an annual report, he described the levels of corruption at the SABC as “endemic” and prevalent for “many years”.
He went further, saying the “corporation is still paying the price for years of ineffective leadership, failed governance and prejudicial decision-making”.
More than 28-million South Africans listen to its 18 radio stations a week, giving it a market share of 70.5%.
Much of this relates to the reign of former COO Hlaudi Motsoeneng, who was known to richly reward allies (and himself) with bonuses, pay increases and promotions, contributing to the runaway wage bill. He also cost the broadcaster dearly in other ways, notably a controversial archive footage deal with MultiChoice and his arbitrary rule to enforce 90% local content on local music on SABC radio stations, leading to a decline in listeners and advertising revenue.
Motsoeneng was finally axed in 2017 after the shenanigans at the SABC were the subject of a parliamentary inquiry, and former president Jacob Zuma appointed a new board in October 2017. The fact that the board is pushing ahead with the retrenchments, despite opposition from political parties, unions and the minister of communications, is a positive sign that we may finally have a strong, independent board that will stand up to political pressure.
New executives have since been appointed from outside the industry, with former Nestle executive Madoda Mxakwe joining as CEO in July.
The SABC, which broadcasts in 14 languages, remains a hugely important institution in SA’s democracy. More than 28-million South Africans listen to its 18 radio stations a week, giving it a market share of 70.5%. For millions, the public broadcaster is the only source of news and commentary, especially for home-language reporting. Its three main television channels — SABC 1, 2 and 3 — have in excess of 21-million viewers.
In a country with limited broadband access, which limits the competition from internet-based rivals, it should be easy to make money off these numbers. The SABC’s private-sector rivals certainly do, with a much smaller portion of the audience pie.
We need an SABC that is a well-run, profitable, growing, efficient organisation offering credible, comprehensive news and current affairs coverage, and entertainment. The job cuts, painful as they will be, are unavoidable, and arguably years overdue.
That we've allowed political meddling, mismanagement and corruption to destroy this pillar of our democracy is a real shame. But it would be absolutely unforgivable if we destroyed 2,200 people’s livelihoods without finally getting the SABC to a position where it can truly fulfil its role as a public broadcaster.