SABC's R1bn football deal fiasco

With the SABC drowning in debt, the corporation’s interim board is desperately trying to renegotiate a billion-rand deal signed for the TV rights to all games of the Confederation of African Football (CAF) in the next eight years.

It remains unclear what CAF games are at issue. The existence of the contract was revealed by interim board member Leslie Sedibe at a hearing of Parliament’s communications committee on Tuesday. However, the Mail & Guardian is the first to disclose its precise nature.

The contract price paid was allegedly not authorised by the former SABC board.
It was signed by Mvuzo Mbebe, the group executive for content enterprises, who was recently suspended by the interim board.

Mbebe signed the contract at the end of last year and allegedly agreed to a guarantee exceeding R500-million. It was signed at a time of mounting SABC debt and when senior executives had been briefed twice about the financial crisis at the public broadcaster.

Telling Parliament that the interim board had uncovered the billion-rand contract this week, Sedibe described it as “shocking”.

“It’s a sports contract that we are investigating,” he told journalists, who swamped him after he had dropped what he described as a “bombshell”. “We would have preferred to pay a lesser price.” He declined to name the contract, saying negotiations were under way.

SABC sources said the corporation’s chief financial officer, Robin Nicholson, had repudiated the deal. Nicholson has also been suspended.

Mbebe and Nicholson flew to Paris in February this year to renegotiate the contract, signed with SportFive, CAF’s agents. It is understood that the guarantee was dropped and the terms of payment renegotiated.

Mbebe could not be reached for comment, but after the announcement in Parliament he is understood to have slapped a court order on the SABC, demanding copies of all sports rights records dating back to 2004.

SABC sources said the contract had been red-flagged by the corporation’s finance department and was shown to the interim board when it took over. “This contract was never hidden,” said a source. “Some people just like grandstanding.”

Interim board chairperson Irene Charnley told Parliament the SABC’s losses now stood at R910-million and had escalated by R120-million in the past two months. The SABC was expected to start turning a profit by 2012, she said.

The SABC had been given an extension to submit its annual report because the R1,4-billion guarantee it had requested from the treasury had not been finalised, said Charnley. The guarantee would en-able the public broadcaster to borrow money, but SABC sources said the guarantee requested had now risen to R1,8-billion.

While the government was expected to offer a short-term bail-out, a letter sent last week by Finance Minister Pravin Gordhan to Communications Minister Siphiwe Nyanda highlighted his concern. The M&G has learned that Gordhan’s letter stated that while there was a willingness to support the SABC it had to resolve its own financial shortfalls.

Charnley told Parliament that the stopgap R200-million the SABC is to receive from the government’s medium-term budget will be spent on paying some of its debt to local producers.

Meanwhile, Nyanda’s controversial draft Bill, which could see taxpayers forking out to fund the SABC, caught even acting SABC chief executive Gab Mampone by surprise. Last week Nyanda gazetted the Public Service Broadcasting Bill, which proposes as one solution to the funding crisis the abolition of licence fees and the introduction of a 1% levy.

Mampone said the draft Bill was unexpected. “I thought it would go through other processes and became a White Paper,” he told the M&G.

Reacting to the DA’s accusations that Nyanda wanted to turn the SABC into a “state mouthpiece”, the minister’s spokesperson, Tiyani Rikhotso, said: “For what good reason — would the minister seek to amass unnecessary and unconstitutional authority over the public broadcaster? The minister understands the importance of independent media that serve as a watchdog for the public and would never seek to undermine this principle.”

Glynnis Underhill

Glynnis Underhill

Glynnis Underhill has been in journalism for more years than she cares to remember. She loves a good story as much now as she did when she first started. The only difference is today she hopes she is giving something back to the country. Read more from Glynnis Underhill

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