Jacquie Golding-Duffy reports on the far- ranging cuts a top US consultancy has suggested for the SABC
THESABC has been advised to axe nearly 1 000 staff and to cut R200-million from the cost of its radio and support services.
Two confidential reports by top United States company McKinsey Consultants detail cost-cutting measures ranging from shutting satellite service Astrasat to retrenching staff in chief executive Zwelakhe Sisulu’s office and monitoring personal phone calls.
But McKinsey – which is being paid R6- million to advise the SABC on how to save money – also warns that the cuts will still fail to meet savings the consultancy deems vital to financially safeguarding the SABC. The broadcaster is currently operating with a R60-million deficit.
The proposals have been presented to SABC management. A meeting between unions and top management is scheduled for March 7. Any agreement with the cost-cutting proposals could put the broadcaster on a collision course with the South African Union of Journalists (SAUJ) and the Independent Broadcasting Authority (IBA).
The SABC said McKinsey’s recommendations would be dealt with in terms of the National Framework Agreement for Restructuring Public Enterprises, and that the recommendations would be widely discussed before final decisions were made.
The consultancy’s report on potential television cutbacks has still to be released, but is expected to be similarly radical.
McKinsey’s objective on radio cutbacks – its report is entitled Radio Division Cost Inititative – is to cut expenses by R100- million.
In administrative and supporting functions – Closing the Gap: Support Functions Cost Initiative – McKinsey proposes saving R130- million.
On both accounts the consultant has quoted what it sees as reachable targets within a year. In radio, it envisages the SABC saving R89-million while retrenching 523 staffers. In support services, it sees the SABC saving R118-million and axing 442 staff.
But the report says the suggested cuts will still leave the radio operation R11-million short of the saving the consultant has targeted. In support services the cuts would miss McKinsey’s target by R12- million.
Closing Astrasat, in which the SABC has invested tens of millions, could save R2,4- million, McKinsey says, and R1,3-million could be saved from closing its language bureau. The consultant says 14 staff from Sisulu’s office could go, saving R1,7- million. It also suggests that the SABC’s use of external consultants should be cut.
In creating a sustainable radio division, McKinsey says that all financial obligations to the National Symphony Orchestra should be severed, that the Pretoria office should be shut and significant restructuring should take place in other regional offices.
It states there are “significant medium- term threats” to radio’s revenue base and the “identified efficiency improvements are not sufficient to meet the target”. It says a number of “structural options will have to be considered to close the R11-million gap”.
McKinsey says the two national public service stations (SAfm and Radio Sonder Grense) and four black public service stations (PBS) are unprofitable and account for just 8% of revenue.
But “almost all the PBS stations and especially the African language stations appear to have untapped potential”.
McKinsey says retrenchment packages for the radio division alone would be R26-million but this cost would be recovered through the resultant savings in four months.
Efficiency improvement proposals include shutting the orchestra – which is already under way – at a saving of R10-million and a cost of 81 jobs; eliminating the position of the Cape Town radio manager to save R400 000; and merging the posts of station manager and programme organiser at Radio Lotus, to save R200 000.
Other suggestions including cutting 12 jobs at Radio Sonder Grense to save R1,4- million, and 10 budgeted vacant positions in Public Service Radio to save R1-million.
Radio Active could save R6,6-million by reducing its budgeted vacancies and introducing a system to reduce personal phone calls.
McKinsey recommends that the Pretoria radio region be closed, saving R9,2-million. Total savings from rationalising regions’ staff is put at nearly R25-million, with 140 job losses.
In radio news, 79 jobs are deemed to be targets for cutting – including the SABC’s staff on its Cape Town political desk – to save R10,8-million.
Cuts to support services would save about R16,4-million from redundancies and improving controls. Other cutbacks include phasing out meal subsidies to save R3,8- million, forcing top management to pay for parking (R300 000), reducing reception hours (R300 000), reducing the use of e- mail (R800 000) and cutting air- conditioning (R1,3-million).
The proposals, which insiders say could be phased in within the next three months, raise further questions about the SABC’s ability to meet its national broadcasting mandate, as stipulated by the IBA.
The SAUJ said this week it would go to the IBA to expose the broadcaster’s “undermining of the public broadcasting service mandate”.
SAUJ president Sam Sole said the union would tackle the SABC on every aspect of retrenchment and restructuring proposed by McKinsey.
“More than a third of the proposed retrenchments will be editorial staff members and this is unacceptable, especially if it means cutting back on SAfm, which is the single national public radio station left.”