/ 30 July 2020

It’s worse than we thought: The state of the SABC and the political battle over retrenchments

Graphic Sabc2 Twitter
(Graphic: John McCann/M&G)

The SABC pays more than R3-billion of its revenue to salaries, even though more than 50% of its permanent staff are not suited or skilled for the positions they hold, and it is projected that the broadcaster will make a loss of R1.2-billion for 2020-21.

But this will not change if politicians and unions get their way. Less than a year ago, the public broadcaster was handed a R3.2-billion bailout and, if its current financial position does not change, the begging bowl will be out again for more taxpayers’ money. 

One of the conditions for the bailout last year was for the SABC board to put together a strategy document. This 100-page document was handed to Parliament’s portfolio committee on communications about two weeks ago, but ANC committee members were not interested in hearing the details. A recurring theme in the document is the bloated employee costs. 

The public broadcaster announced last month that it needs to cut about 600 jobs, which would be a cost reduction of about R350-million. But there has been pressure from the government, the ANC and unions that there should be no jobs shed, particularly during the Covid-19 pandemic. 

The broadcaster and the unions are involved in a section 189 process through the Commission for Conciliation, Mediation and Arbitration. 

Bloated and underskilled

According to its turnaround document, the broadcaster states that:

  • 65% of the permanent workforce have a diploma or less education;
  • The SABC, with only four channels, has the highest employee cost as a percentage of expenditure in comparison to its local competitors, such as e-Media Holdings, and international public broadcasters, such as the BBC;
  • The broadcaster pays more than 40% of its revenue to employees, with each employee costing on average R450 000 a year; and
  • Unlike other broadcasters, the SABC spends a mere 22% of its budget on content; others spend more than 40% on content.

“Staff optimisation at the SABC is more than 10 years overdue. It was an explicit requirement for the successful turnaround of the SABC when it needed state support in 2008-09. It remains an explicit requirement for the successful turnaround of the SABC now,” reads the turnaround strategy document. 

Over the past 10 years, the public broadcaster made a profit only from 2011-12 to 2013-14. But that was achieved because of low investment in content, which is the core business of the corporation. “Revenue growth has significantly slowed in the last four years. Ability to compete in the market is key for the SABC’s revival,” reads the document.

But then came the years of controversial chief operations officer Hlaudi Motsoeneng, who in one year increased his salary from R1.5-million to R2.4-million and allegedly did the same for his allies, as well as employing more people. 

The unions at play

But politicians and the unions are not willing to allow the SABC to cut any jobs, and have said that it should look at other cost-cutting measures. While the broadcaster was attempting to conduct a skills analysis, unions raised a number of issues.

The SABC has maintained that the skills audit is not related to the retrenchment process, which was instead necessitated by the dire financial position.

The major unions wrote a letter to the management, stating that staff members could not complete the skills survey due to the lockdown. The unions complained there were issues with the complexity and the validity of the survey questions and were worried about the questions in the survey and how the results would affect employees.

This is not the only reason there is political resistance to job cuts: the SABC, just like many other state entities, has been a place for patronage and an employment agency for years. 

University of the Witwatersrand School of Governance associate professor William Gumede told the Mail & Guardian that SABC and other state-owned enterprises have gone beyond the rationale of their existence and become institutions that are draining public resources.  

“In the public sector, unions are very strong and are aligned to the ANC, so, in order not to alienate the unions, the ANC will not agree with retrenchments in these entities. You can’t retrench your patronage people,” Gumede said.

Commercial entities such as Media24, Edcon, Caxton, CTP Publishers and Printers, and mining houses have all cut thousands of jobs because of the depressed market. Communications Workers Union secretary Aubrey Tshabalala, said, as much as the unions appreciate the need to deal with the huge salary bill, it is in a stalemate about retrenchments with the SABC because of the fact of the incomplete skills audit. 

“We agreed on the skills audit so that it can be identified what talent is there and where there is an oversupply of employees. This will assist to avoid a situation where you might retrench what you need and commit the same error that was made in 2007 [when], after retrenchments, a few months later people were rehired at higher salaries. The same people who say there is a high salary bill went ahead with a new structure and appointed people to positions. The skills audit must … inform a new corporate plan,” Tshabalala said.

He said the union has proposed that the SABC should withdraw the new structure and the appointments and, if that doesn’t happen, it will interdict the section 189 process.  

Enter politics

Yet the Communications Deputy Minister Pinky Kekana, who told the SABC to stop the retrenchments, has publicly argued that the SABC could find other cost-cutting measures.

“While the staff costs are high, there are other ways to look at cost-saving and revenue-generating in the immediate future; at a time like this when we face dark times, we should not be looking at just cutting staff,” Kekana said.

Gumede noted that state entities had become a fertile ground for the politically connected to benefit from tenders. “Over the last couple of years it has become an employment agency, so if you retrench, you also retrenched those deployed in procurement … We are going around in circles here. It is time for us as a society to ask ourselves if we are getting value in protecting jobs in these entities.”

Based on the SABC’s strategy document, there are a number of measures the broadcaster has embarked on to cut costs. These include renegotiating sporting rights contacts from an expected cost of R1.4-billion over five years to a new arrangement of R360-million over five years and for another set of sporting rights to be cut from an expected cost of R550-million over five years to a new arrangement of R110-million.