Music industry becomes latest victim of SABC’s financial dramas

The SABC had a financially challenging year in 2018 and continues to be dogged by money troubles as it operates under technical insolvency. (Delwyn Verasamy/M&G)

The SABC had a financially challenging year in 2018 and continues to be dogged by money troubles as it operates under technical insolvency. (Delwyn Verasamy/M&G)

The SABC halted payments on music royalties for songs used on its television and radio stations last year according to the Southern African Music Rights Organisation (Samro).

City Press reported on Sunday that Samro — in its latest annual report — revealed that the public broadcaster owed the organisation R55.5-million in royalties at the end of June 2018.

“Continuous efforts are still in progress to engage with the SABC management in order resolve the delayed and slow payment of the increasing outstanding balance; so that future distributions are not negatively affected,” Samro said in its report.

READ MORE: Performers call out for pay rights

According to Samro’s website, the organisation’s “primary role is to administer performing rights on behalf of our members.”

Samro is responsible for collecting license fees from entities who use music such as television and radio broadcasters, retailers and promoters. These fees are then distributed as royalties.
Samro pays out about R300-million in royalties to publishers and composers every year but with the SABC not being able to pay out, this amount will be affected.

The SABC had a financially challenging year in 2018 and continues to be dogged by money troubles as it operates under technical insolvency.

In March 2018, the public broadcaster revealed that it had to fork out R22-million to defend former chief operations officer Hlaudi Motsoeneng during his turbulent tenure. Motsoeneng was involved in no less than 15 different cases since the 2013/14 financial year and was eventually removed as COO in 2017.

READ MORE: Hlaudi Motsoeneng’s legal fees cost the SABC R22m

In August, chief financial officer Yolande van Biljon told the portfolio committee on communications that the SABC is close to R700-million in debt and that it owes its creditors R694-million, with further accruals of R475-million expected.

READ MORE: SABC debt close to R700m

In October, the broadcaster announced that it had served a notice of retrenchment to retrench 981 permanent employees and 1 200 freelancers, according to section 189 of the Labour Relations Act.

The national broadcaster’s annual wage bill last year was R3.1-billion. Of this total expense, R12.5-million went to directors, R25-million to members of the executive committee, R500-million to freelancers and R1-billion to different layers of management, according to CEO Madoda Mxakwe.

In the retrenchment notice, the broadcaster said it had already implemented several cost-cutting measures “but that there was simply no manner in which a complete organisational wide restructuring and reductions can be avoided”.

READ MORE: SABC has no choice but to retrench — executives

Mashadi Kekana

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