/ 10 March 2009

SABC cash problems under spotlight

Minister of Communications Ivy Matsepe-Casaburri told a media conference held by the economic cluster of ministers that three separate reports on the state of the South African Broadcasting Corporation (SABC) will guide the government as to what should be done to extricate the corporation from its financial distress.

The minister said on Tuesday that the first report was put together by the department based on input from the board, the top management and from middle management.

A draft report was received on Monday and the final version will be ready on Friday.

She said that separately from this, the department had commissioned a report from Deloitte and Touche which has also just been delivered. And in the meantime a report was commissioned from Bowman Gilfillan by the SABC board itself.

The reports all indicate that there has been ”a bloating of the personnel at the SABC”, the minister said, and she added that supervision of procurement processes was not properly done which ”suggests some of the reasons for the financial distress the SABC is under”.

Global crisis bites
She also said that the global financial situation has created its own tensions, with the cancellation of much advertising. The SABC said last week that it expected to lose R400-million from the unforeseen cancellation of advertising expenditure, related to the global financial crisis.

However, the minister indicated that the corporation is not asking for money from Treasury. The broadcaster is asking for Treasury to provide the banks guarantees that will enable finance to be raised until conditions improve. There is no indication yet of Treasury’s attitude to this request.

Asked whether she perceived deficiencies in the corporate governance of the SABC, the minister replied that the deficiencies are quite clear for people to see. ”All of the three reports refer to problems around corporate governance,” she said. ”So three different independent reports make references to these. As we intervene we shall have to intervene on the basis of what the reports say.”

She promised that the reports will be published as soon as possible.

The SABC’s managers have predicted that the public broadcaster will make a loss of R784-million in 2009.

In fact less than 2% of the SABC’s funding comes from the government. It earns the majority of its income from television licences and through commercial funding, which includes the nose-diving sale of advertising.

Matsepe-Casaburri made it clear, however, that there was nothing the government could do to come to the rescue of the commercial arm of the corporation — otherwise its private sector competitors would complain that the field they play on was suddenly not level.

All the government was able to do would be to help it with its public broadcasting side. — I-Net Bridge