/ 12 June 2009

SABC implodes

The SABC’s debt mountain is even larger than reported — the public broadcaster owes SuperSport nearly R100-million.

More than 1 000 members of the independent television production industry marched on the SABC last week demanding a change in leadership and for the SABC to pay up. But the Mail & Guardian has established that larger players have also been affected by the public broadcaster’s financial woes.

Industry insiders told the M&G that the R100-million owed to SuperSport relates to Premier Soccer League (PSL) matches, as well as cricket matches that the SABC sub-licenses from Multichoice’s sports arm.

The insiders said that negotiations between SuperSport and the SABC regarding the money owed are continuing and that the SABC will be able to settle the outstanding millions only once it receives the R2-billion bail-out it has requested from the government.

But that bail-out looks unlikely to materialise soon. Communications ministry spokesperson Tiyani Rikhotso told the M&G this week that the treasury, the SABC and the communications department will meet to find ‘a solution to the financial challenges facing the public broadcaster”.

‘So far there haven’t been any movements in that regard but it’s something that we are definitely attending to,” said Rikhotso.

The SABC has the rights to at least 150 PSL matches a year from SuperSport. In 2007 the PSL sold the broadcasting rights for the league’s matches to SuperSport in a deal that was reported to be worth R1.6-billion.

In terms of the deal SuperSport had rights to more than 250 PSL matches, of which 150 were to be sub-licensed to a free-to-air broadcaster (as opposed to a subscription service) as stipulated in the contract. The SABC, which had previously paid R67-million a year for the PSL rights, snapped up the free-to-air matches, as this was key to bringing in massive advertising revenue.

SuperSport chief executive Imtiaz Patel said at the time that securing the rights to PSL matches was crucial to its growth strategy. The pay-TV operator was focusing on the emerging black middle-class market with its DStv Compact offering, priced at R200 a month, and the PSL matches were a huge drawcard.

SuperSport and the SABC refused this week to divulge any details about the sub-licensing arrangements between them. ‘This is a contractual issue and we are dealing with our creditors directly,” SABC spokesperson Kaizer Kganyago told the M&G.

He confirmed that football and cricket were the main sports the SABC sub-licensed from SuperSport. Asked if its R100-million debt would affect the public broadcaster’s relationship with SuperSport and its sports coverage generally, Kganyago said that the relationship ‘was not under threat”.

Patel refused to discuss the sub-licensing agreements. ‘The SABC are our partners on many matters related to sports rights,” he said. ‘The agreements between us and the SABC are confidential and therefore I feel it is inappropriate to disclose these matters in public.”

Board slammed for firing Mpofu
The South Gauteng High Court added to the SABC’s woes by ruling against its decision to fire its former chief executive, Dali Mpofu, writes Lynley Donnelly.

The Mpofu saga began in May last year after he fired the SABC’s head of news, Snuki Zikalala, for allegedly leaking internal documents. The SABC board, under former chairperson Khanyi Mkonza, axed Mpofu the following day, citing his lack of authority to fire Zikalala.

Mpofu took the matter to the courts and has since been reinstated and suspended a number of times.

This decision relates to his first suspension. The court’s decision in his favour was subsequently appealed by the SABC.

The decision by the appeals bench of the South Gauteng Court to dismiss the SABC’s appeal was unanimous.

Judge Mahomed Jajbhay declared that Mkonza’s actions had been unacceptable. In ordering costs, he said: ‘I find that the conduct of the chairperson [Mkonza] when assessed against the relevant background facts and the principles of corporate governance is not to be encouraged — She clearly got caught up in an emotional response to the suspension of Dr Zikalala.”

He went on to say that the ‘leadership qualities of Ms Mkonzo as well as the other non-executive directors were wanting”.

A spokesperson for Mpofu said that the axed chief executive was elated by the decision but ‘was not necessarily contemplating going back to the SABC”.

He and his lawyers would make a decision on the matter only after examining the documents, she said.

SABC spokesperson Kaizer Kganyago said the SABC still had to study the judgement.

Board dissolves
The SABC board dissolved on Thursday after the resignation of three board members, in a development that will force Parliament to appoint an interim governing structure.

The board members who quit with immediate effect were Bheki Khumalo, Andile Mbeki and Desmond Golding.

The South African Press Association reported that the three said in a joint statement that it was ‘in the public interest” for them to do so.

‘We are mindful of the enormity of the challenges facing the SABC.”

Their resignations come days after board chair Khanyisile Mkonza resigned, making way for the appointment of an interim chair, Ashwin Trikamjee.

However, legal opinion obtained by the ministry of communications was that Trikamjee’s appointment was illegal as only President Jacob Zuma is entitled to appoint the chair and deputies.

According to Ismail Vadi, chairperson of Parliament’s communications committee, the board was in any event ‘technically dysfunctional” because it did not have a quorum.

According to Tiyani Rikhotso, spokesperson for the department of communications, the parliamentary committee must now nominate a new set of acting board members who will serve until a new board is appointed. Their term should last no more than six months.

The SABC had been scheduled to appear next week before the portfolio committee.

On Thursday Business Day reported that Communications Minister Siphiwe Nyanda intended taking the board to task for installing an illegal interim chair. He was due to meet the board on Friday to express concerns about this and other issues plaguing the broadcaster, including financial mismanagement and its plea for a R2-billion bailout from government.

Before his resignation Khumalo had expressed his desire to step down as soon as possible.

‘It is the right thing to do. Let the ruling party and the president appoint an interim board,” he told the Mail & Guardian.

He said the board had needed only his and one other person’s resignations for it to dissolve.

‘The only alternatives are for the board to dig in their heels or to go through the parliamentary process,” he said. Khumalo also expressed concern that a lengthy parliamentary process could inflict additional reputational damage on the broadcaster.

Rikhotso echoed these sentiments. ‘We are only interested in seeing a board that will steer the SABC back to a stable state,” he said.