The public broadcaster’s financial woes do not affect it alone.
The sporting public, sport sponsors and the organisations in charge of sporting codes each pay a price for the SABC’s debt in one way or the other. Now, in an effort to dig itself out of its financial pit and save an estimated R440-million a year, the SABC is planning to retrench 981 permanent workers and 1 200 freelancers.
The SABC’s dire financial state has hampered its ability to broadcast major sporting events as it cannot compete for broadcasting rights, which, for football, rugby and cricket, are all owned by SuperSport. The public broadcaster sublicenses the rights from its competitor, which often gives it mere crumbs.
The SABC broadcasts Springbok home matches only after they have ended. It doesn’t show any matches the Proteas play overseas. At the end of April, it lost the rights to show Bafana Bafana and Banyana Banyana home matches. “What we have seen as a historical trend is that sport rights have, over the past five years, escalated quite surprisingly, and in some instances by more than 100%,” says SABC chief operations officer Chris Maroleng.
“This increase has effectively meant that the SABC has to deal with what we describe as an ‘unfunded mandate’. We are mandated, in terms of our regulations, to carry 22 sporting codes as stipulated in the Icasa [Independent Communications Authority of South Africa] regulations. But there is no explanation of where the SABC should find the commercial windfall to fund this R1.2-billion [to pay for broadcast rights over a three-year period].”
Disconnect with the public
The SABC’s failure to compete for broadcasting rights has led to a disconnect between the majority of the public and domestic sport, such as cricket and rugby, which are shown only on SuperSport’s premium package, which costs more than R800 a month.
Even though Cricket South Africa (CSA) and the South African Rugby Union (Saru) are paid handsomely for those broadcasting rights, they are not able to sell their products to a wider audience.
“The small reach cricket and rugby have in terms of viewers has an impact on the sponsors they attract and how they sell themselves,” says Kelvin Watt, regional managing director of Nielsen Sport for Africa and the Middle East. “Absa, for instance, pulled out of sponsoring the Currie Cup because it wanted to reach a wider audience to build its base. It achieved that through football and its sponsorship of the Absa Premiership. There are roughly 8-million to 9-million people who watch the Springboks, there are around 15 million people who watch the Proteas, and there are more than 30 million people who watch the PSL [Premier Soccer League].”
Success of the PSL model
The PSL’s business model is based on distributing matches on free-to-air and pay TV. The South African Football Association (Safa) could be forced to adopt a similar approach to balance its need to be commercially successful and meet its obligation to make national team matches available to the majority of the public.
“We are exploring every opportunity. We’ve had a few overtures made to us by other broadcasters, so we’re working on that. But the door is open for the SABC. It’s all about negotiations. There’s no door that’s shut. All we want is a commercially viable deal,” says Russell Paul, Safa acting chief executive.
Safa and the SABC are at loggerheads over the renewal of broadcasting rights worth R110-million, which expired on 30 April.
Safa is in a catch-22.
It, too, needs to make money. But Bafana Bafana matches are safeguarded by Icasa regulations as matches of national importance that must be shown on free-to-air TV. The SABC doesn’t have the money to renew the deal with Safa, and has tabled a paltry R10-million.
“We are trying to ensure that both parties reach common ground so that Bafana Bafana matches are back on TV,” says Vuyo Mhaga, spokesperson for the sport and recreation minister, Tokozile Xasa.
When asked why the ministry doesn’t have measures in place to ensure the majority of South Africans are able to watch rugby and cricket, at the right time and no mater where they play, Mhaga unwittingly bolsters Safa’s argument. “The SABC can’t afford to buy those rights and we can’t force them to do so. We can’t say that Saru must drop its prices, because that would have an effect on the development of the game and [Saru’s ability] to honour its contracts.”
Safa has also been saying the same thing in its insistence on the SABC continuing to pay the R110-million a year agreed upon in the last broadcast deal between the two organisations.
“It’s imperative that we get the funds that are required for the development of the game,” says Paul. “That’s what people tend to miss sometimes. They think Safa is setting out to be greedy to get the money. We’re not asking for exorbitant amounts of money. We’re asking for the sum of money that was paid to us in the past. We’re not even asking for an increase. Ideally, we would want R150-million or R200-million.
But we recognise their challenges.
“We see the stories that the SABC is in a financial crisis. We know that. We understand that. But the financial crisis it has announced is R2.1-billion. Safa didn’t make it broke with its R110 million arrangement. [The SABC] had a press conference where it explained why it is R2.1-billion in the red. It’s not because of football.”
EPL deal controversy
Safa says the SABC is being disrespectful by saying it doesn’t have money for Bafana Bafana matches, but is able to buy English Premier League (EPL) rights and secure a deal with CSA to broadcast the Mzansi Super League.
“It’s unfortunate that certain of our detractors have placed on record a view that we were remiss to enter into such a commercially lucrative arrangement at the expense of entering and concluding agreements with Safa and others,” says Maroleng.
“That’s an incorrect perspective. The two, in our view, are mutually exclusive. The one [acquiring EPL rights] requires us to commercially exploit it and derive good value for the SABC. In fact, we have recouped 80% of the money we spent to purchase the rights in August. The other [Safa deal] talks to an unfunded mandate, which can’t be the burden of the SABC. What we are saying is that if the SABC is to persist as a public broadcaster and carry out its public mandate, we must enter into more lucrative sport deals, which helps us see how we can cover some of the costs we have projected.”
The future of sport broadcasting in South Africa looks bleak, with the only two real players being a multibillion-rand juggernaut that reaches a small portion of the public, and an impoverished public broadcaster that reaches every corner of the country but is in a financially precarious position. For sport in this country to thrive, both players must be strong so that competition between them leads to a wide spread of matches being broadcast to an even wider audience.
“The million-dollar question is, how do you balance making money and reaching a wider audience?” asks Watts.
“SuperSport is a massive funder of sport in South Africa. It will continue to be a major player for years to come, but it doesn’t have a wide reach. The key for the future of South African sport will be balancing making money and sport being readily available to a larger audience. What the NFL [the American National Football League], the most watched sport league in the world, does well is to distribute its games on free-to-air and subscription TV, and digital streams. Finding the right balance is key to survival.”— NewFrame