This is how much the SABC suffers when you don’t pay your TV Licence

The SABC is presenting its turnaround strategy to parliament today, highlighting the major issues facing the public broadcaster, including how the lack of TV Licence fees is a massive stumbling block.

Speaking at a presentation to parliament’s communications committee on Monday, deputy communications minister Pinky Kekana said that TV Licence fees were the main source of revenue for the public broadcaster, and with low levels of payment, the state-owned media group was struggling.

She said that the annual TV Licence fee worked out to 76 cents a day for viewers – and without this, the SABC staff can’t be paid and the broadcaster can’t pay for content.

Kekana called on all South Africans to “play their part”.

In the latest financial year, the group billed R3.378 billion in TV Licences, but only pulled in revenues to the tune of R941 million – a 27.8% compliance level.

The SABC points to a sum of R2.43 billion as failing to meet its ‘recognition criteria’ – that is, monies that cannot be recognised and included as revenue. If everyone paid their dues, the group would post a massive profit.

Turnaround strategy

The department said it would be looking into new revenue streams for the SABC – however this would prove difficult amid growing competition from pay-TV operators, it said.

The broadcaster alluded to possible retrenchments, noting that 42% of revenue was currently going towards wages. It said that it has been communication with the department as well as unions on the matter, saying that it will follow processes outlines in South African labour law (s189 notices).

However, the SABC said that possible retrenchments are not the only strategy the broadcaster has planned, adding that it would be looking at governance issues and seeking commercial opportunities – including sports rights – while dealing with digital migration and other regulatory/policy issues.

The entire turnaround plan, however, hinges off the SABC being able to sort out its financial problems.

For the 2017/18 financial year, the group reported income of R6.6 billion, with expenditure at R7.3 billion resulting in a R632 million net loss. The broadcaster also has R1.3 billion in debt.

While the group’s financial position has strengthened in the past year, it said that there is not enough money to invest in the content it needs to claw back lost audiences.

The group said that it is currently losing between R80 million and R90 million a month, with expected revenues decreasing 10%.

Advertising pulls in revenues of R4.8 billion (71% of the total), with TV Licence fees bringing in R941 million (14%) and sponsorships drawing R393 million (6%)

The group’s employee costs amount to R3.1 billion (42% of total expenditure), with programme, film and sports rights coming to R1.7 billion (23%).

Other costs include signal distribution and linkage costs (R718.1 million – or 6%) and broadcast costs (R486.6 million or 5%).

About R2.4 billion in TV Licence revenue is not collected.

Read: SABC’s massive TV Licence mess in numbers

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This is how much the SABC suffers when you don’t pay your TV Licence