SABC needs mega bailout

2017-05-07 06:10 - Justin Brown
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Johannesburg - The SABC and the department of communications were set to make a formal request “very soon” to National Treasury for funding to help the embattled broadcaster pay its bills, said SABC interim board chairperson Khanyisile Kweyama.

The broadcaster would be looking for a guarantee from Treasury of “close to R1 billion”, said Kweyama, who has been interim chair since March.

She was speaking on the sidelines of this week’s World Economic Forum (WEF), which was held at the Inkosi Albert Luthuli International Convention Centre.

Kweyama was previously the CEO of Business Unity SA and a director of mining giant Anglo American.

“We have not made a request for an amount of R1 billion,” she said.

“We know it is not a small amount. Revenue has dropped significantly in the past financial year, compared with previous years. Revenue is trickling in. The unfortunate thing is that expenses remain as they are.”

Regarding making a formal request to National Treasury for a guarantee, Kweyama said this would happen “very soon”.

“We are on a final draft. We have a financial team – we and the shareholder [the department of communications] – working on the funding proposal that we are going to present to Treasury.”

The cost of high local content quotas “is not sustainable at this stage”, she added.

“We are doing a cost analysis of the revenue that has dropped since that directive came into existence at the SABC. So, we are reviewing it [the local content quota].”

Currently, the interim SABC board consists of five members, down from as many as 12 in the past. Members were approved by President Jacob Zuma, on the recommendation of the National Assembly.

They report to new Communications Minister Ayanda Dlodlo.

Currently, critical portfolios at the SABC are being filled in acting capacities, notably the roles of CEO, chief financial officer, chief operating officer and head of radio.

Kweyama said the broadcaster would be looking to advertise to fill these top leadership positions “in the next week or so”.

Deputy Finance Minister Sfiso Buthelezi said during an interview at the WEF that National Treasury was as yet unsure of how much financial support the SABC needed.

In 2009, the broadcaster obtained a R1.4 billion guarantee. It drew down on R1 billion of that guarantee and later paid it back.

“It is very important that you get your governance correction. You need to put in place conditions associated with any guarantee,” said Buthelezi.

Back in 2009, the SABC had strict conditions associated with the guarantee and this time would be no different, he said.

“Any new guarantee would have very strict conditions associated with it and it would be monitored very closely.”

National Treasury was unlikely to grant the SABC a guarantee any larger than R1.5 billion, Buthelezi said.

The SABC posted heavy losses following the implementation of a high local content quota for its stations.

Tough economic times in the advertising sector have also been blamed for the drop-off in the broadcaster’s fortunes.

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