SABC TV licence replacement plan

Communications Minister Solly Malatsi says his department is looking for a new funding model for the SABC, which would not place an additional burden on consumers.

Malatsi shared his views in a discussion with Newzroom Africa regarding speculation about a new SABC levy to fund the state broadcaster.

This levy would replace the current TV licence regime, which has not brought enough money to sustain the state broadcaster.

Malatsi said the problem with the current TV License regime is the very low compliance and collection rate.

He said that this low compliance rate from television set users means that SABC does not get enough revenue to fund its operations.

It contributes to the deteriorating financial sustainability of the state broadcaster, which has become technically insolvent.

It sparked a conversation about an alternative to TV licences to collect revenue for the SABC from television owners.

Malatsi said he opposes imposing additional taxes on South African citizens as they are already heavily overtaxed.

However, he said the country needs a new approach that would replace the current TV licence regime.

Numerous mentions of the new levy to fund the SABC have been made, but the minister said there is no formal proposal regarding this issue.

“The risk of a new levy is the additional cost it would have on South African consumers to fund television and media services,” he said.

He added that how people consume media services has shifted from using a television set to streaming through smartphones or laptops.

The government has not yet determined the best way to handle this shift in consumer behaviour regarding funding the SABC.

Malatsi said any solution should ensure that it does not burden consumers with additional costs or make it more challenging to do business in South Africa.

The SABC is technically insolvent

The SABC’s latest annual report revealed that the state broadcaster’s finances are dismal. Although it generated R4.98 billion in revenue, its expenses outweighed its income.

This resulted in the SABC reporting a loss of R198 million for the year and a total comprehensive loss of R1.06 billion.

The continued losses took their toll on the state broadcaster, which became technically insolvent over the last financial year.

It reported assets of R4.09 billion and liabilities of R4.12 billion, leaving it with negative equity of R37 million.

Negative equity means the company is technically insolvent and cannot settle all its liabilities if all its assets are liquidated.

The SABC said it ‘remains materially uncertain’ whether it will be able to meet its obligations in the next twelve months.

It will require severe austerity measures, including suspending more than 80% of the long-term capital plan and limiting content investment.

“It must be noted that virtually no funding is currently available for any capital investment in innovation, infrastructure and technology,” the SABC said.

Despite the SABC’s worrisome financial position, it has continued to compensate its employees and directors handsomely.

The SABC’s latest annual report revealed that the SABC has 2,234 employees, who earned an average of R653,900 each over the last financial year.

The 11 top management employees earned an average of R2.9 million annually, while those in senior management earned R1.6 million.

The SABC’s 239 middle managers took home an average of R1.1 million over the last financial year.

The state broadcaster spent R1.46 billion on its 2,234 employees, making them some of the highest-paid people in South Africa.

The SABC’s directors were equally well-paid, with sixteen directors earning a combined R18 million over the last year.

Former SABC group chief executive officer Madoda Mxakwe was paid R2.1 million for three months of work.

Mxakwe’s five-year tenure as chief executive ended on 30 June 2023, three months into the financial year.

He was the first SABC group chief executive officer to complete his contract at the state broadcaster in over 15 years.

SABC CFO Yolande van Biljon received R3.5 million over the last year, and COO Ian Plaatjies was paid R3.4 million.

SABC chairperson Khathutshelo Ramukumba received R1.1 million, while the other non-executive directors received between R552,000 and R951,000.