EDITORIAL: SABC needs to do more than just slashing its wage bill
The broadcaster has been groaning under a draining cost-to-income ratio as advertising sales fall and competition from online platforms is fierce
In a country where more than 10-million people are out of work, it is undeniably painful to see that more than 600 people from the SABC will join the ranks of the unemployed.
Yet, faced with the alternative of putting even more jobs at risk by kicking the can down the road, the board of the public broadcaster was left with little choice. The SABC first laid out plans to retrench as many as 400 workers late in 2020, predictably drawing swift rebuke from the Communication Workers Union (CWU) and from communications minister Stella Ndabeni-Abrahams, who sought to cultivate an image of a politician in tune with the plight of the working class.
Ndabeni-Abrahams and the CWU were joined by the SA Communist Party, which denounced the retrenchment process as weakening the broadcaster when it was needed the most to educate and deliver news during the pandemic, and corruption-accused ANC secretary-general Ace Magashule.
Unashamedly, Magashule vowed to use the might of the ANC to block the restructuring process, saying he expected ANC deployees, as opposed to independent board members, to vote down the proposal. Predictably, this was just another act of grandstanding, and he did no such thing.
How long that will last is unclear, but Magashule simply made the national broadcaster another battleground in ANC factional battles. Those aligned to former president Jacob Zuma only care about undermining the current president, Cyril Ramaphosa, and have no care for the economy, which is in need of structural reforms, chief among which is to take painful decisions about state-owned enterprises.
For the SABC board, with little visible support from the shareholder representative, Ndabeni-Abrahams, to come through victorious is not insignificant. They were able to cut the broadcaster’s wage bill, which gobbles up more than half of its annual revenue of R5.7bn, by twice as much as it had planned. Eventually more than 600 workers accepted severance packages.
It would be naïve to think slashing the wage bill is a silver bullet for the broadcaster that has been groaning under a draining cost-to-income ratio — which measures the cost of running a business in relation to its operating income — of 110%.
Like other media companies, the SABC is competing with Silicon Valley giants such as YouTube, which intensified competition as big brands shifted some of their marketing spend to the platform that has enjoyed explosive growth as internet data prices come down and more people buy smart, connected TVs. It’s a structural problem that faces even “world-class” broadcasters such as the BBC, as young audiences spurn traditional broadcasters and opt for social media, apps and on-demand TV.
In the year to the end of March 2020 — the latest available financial disclosures — the SABC’s advertising sales dropped almost 10% due to a combination of sliding television audiences as the cash-strapped broadcaster struggled to create fresh and compelling content to keep people watching.
Other than advertising revenue, the SABC needs to work out how to collect mandatory TV licence fees, which are crucial if society wants public services rather than purely commercial content from the broadcaster’s three TV channels and about 20 radio stations.
As we have written before, one of the board’s proposals, to rope in the SA Revenue Service to collect the fees on its behalf, might be an effective tool. But it is hard to see how it would get the backing of the public, which is rightly sceptical that the problem is with the funding model rather than years of mismanagement and political meddling.
Having said that, reducing the SABC’s wage bill — one of the main conditions of the Treasury in exchange for getting a cash injection — is a step in the right direction, albeit with a sting in the tail as workers have had to unfairly pay for the collapse in governance.
We can only hope politicians will step back and allow board members — many of whom were appointed when Ramaphosa took power in 2018 — in other state-owned enterprises the space to overhaul and reform them.
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