{"id":807678,"date":"2025-01-22T09:59:32","date_gmt":"2025-01-22T07:59:32","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=807678"},"modified":"2025-01-22T09:59:37","modified_gmt":"2025-01-22T07:59:37","slug":"technically-insolvent-state-owned-enterprise-collapsing-in-front-of-everyones-eyes","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/807678\/technically-insolvent-state-owned-enterprise-collapsing-in-front-of-everyones-eyes\/","title":{"rendered":"Technically insolvent state-owned enterprise collapsing in front of everyone’s eyes"},"content":{"rendered":"\n

The South African Broadcasting Corporation (SABC) suffers from decreasing audiences, declining revenue, mounting losses, and an ever-weakening balance sheet.<\/p>\n\n\n\n

The situation has reached such concerning levels that it cannot invest in technology, and its buildings and other infrastructure are collapsing.<\/p>\n\n\n\n

The SABC\u2019s 2024 annual report revealed that it recorded a loss of R200 million over the last financial year.<\/p>\n\n\n\n

While this is an improvement over the R800 million loss from the year before, it did not help its desperate financial situation.<\/p>\n\n\n\n

The SABC has been operating at a loss for many years. This is partly due to a significant revenue decline in recent years.<\/p>\n\n\n\n

In the 2019 financial year, the state broadcaster generated R6.5 billion in revenue. It was mainly derived from advertising and sponsorship income and TV licence fees.<\/p>\n\n\n\n

Five years later, revenue declined to R5.1 billion. This decrease resulted from a significant reduction in commercial revenue and TV licence fees.<\/p>\n\n\n\n

TV licence evasion rate increased from 69% in 2019 to an all-time low of 86% in 2024, which shows that South Africans refuse to pay this fee.<\/p>\n\n\n\n

South Africans have migrated to streaming services and do not want to pay for TV licences as they do not use the SABC\u2019s services.<\/p>\n\n\n\n

Many South Africans are also pro-actively avoiding paying TV licence fees as they are tired of funding corrupt and mismanaged state enterprises.<\/p>\n\n\n\n

Not paying for TV licences has become so commonplace that many government departments do not pay for this fee.<\/p>\n\n\n\n

The SABC\u2019s finances have reached such critical levels that the new Communications Minister, Solly Malatsi, is looking at a new funding model for the company.<\/p>\n\n\n\n

Stakeholders are looking at a public interest content levy to create a more sustainable model. This levy will be charged on various devices, including smartphones.<\/p>\n\n\n\n

The state broadcaster also wants other companies to collect these fees. This is another contentious strategy.<\/p>\n\n\n\n

The SABC is collapsing<\/strong><\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

The continued losses took its toll on the state broadcaster, which became technically insolvent over the last financial year.<\/p>\n\n\n\n

It reported assets of R4.09 billion and liabilities of R4.12 billion, leaving it with negative equity of R37 million.<\/p>\n\n\n\n

Negative equity means the company is technically insolvent and cannot settle all its liabilities if all its assets are liquidated.<\/p>\n\n\n\n

The SABC said it \u2018remains materially uncertain\u2019 whether it will be able to meet its obligations in the next twelve months.<\/p>\n\n\n\n

It will require implementing severe austerity measures, including suspending more than 80% of the long-term capital plan and limiting content investment.<\/p>\n\n\n\n

\u201cIt must be noted that virtually no funding is currently available for any capital investment in innovation, infrastructure and technology,\u201d the SABC said.<\/p>\n\n\n\n

The state broadcaster\u2019s poor financial state can be seen in numerous reports about its building and technology.<\/p>\n\n\n\n

Neglect could be seen everywhere in and around the SABC campus in Auckland Park, and Rapport recently reported<\/a> that its Radio Park building is in a poor state.<\/p>\n\n\n\n

It reported that workers in the SABC\u2019s dilapidated Auckland Park building complex are fed up after years of decline.<\/p>\n\n\n\n

\u201cRadio Park’s two service lifts reportedly last worked in 2018, and currently, only one of the regular lifts is operational. The escalators are broken and cordoned off,\u201d it said.<\/p>\n\n\n\n

The workers have also complained that outdated toilet facilities are dirty, and the stairs are poorly lit.<\/p>\n\n\n\n

The deterioration has been prevalent at the SABC campus for years and included numerous problems, including a fire in 2023<\/a>.<\/p>\n\n\n\n

In 2019, SABC employees in its Radio Park building had to be evacuated<\/a> after a diesel leak from the generator backup tank on the 15th floor.<\/p>\n\n\n\n

What the SABC looks like today<\/strong><\/h2>\n\n\n\n

Daily Investor visited the SABC recently, and it was clear that not much money was spent on maintenance, as shown in the photos below.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n
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\"\"<\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"

The state broadcaster suffers from decreasing audiences, declining revenue, mounting losses, and an ever-weakening balance sheet.<\/p>\n","protected":false},"author":10,"featured_media":807687,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[667,8534],"class_list":["post-807678","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-sabc","tag-south-african-broadcasting-corporation-sabc"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/807678","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=807678"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/807678\/revisions"}],"predecessor-version":[{"id":807690,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/807678\/revisions\/807690"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/807687"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=807678"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=807678"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=807678"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}