Pubcaster teeters on financial brink

It fights scandals and accusations of mismanagement

Plagued by plummeting ratings, internal strife and a series of scandals over mismanagement, the South African Broadcasting Corp. is looking for a way out of a steadily deepening hole as it approaches its 75th anniversary.

The pubcaster’s annual report, published last month, painted a bleak portrait of a rudderless ship R1 billion ($145 million) in debt and on the brink of financial collapse.

It said the SABC, which employs 3,000 staffers to run its three channels and 18 radio stations, had been forced to sell advertising airtime at discounted rates and that it continued to lose auds to competitors and DStv.

The report came amid continued signs of political infighting among members of the executive board, with a fourth member tendering his resignation last week. Whatever hopes the embattled pubcaster had of righting the ship after a successful World Cup soccer run in summer seem to be in doubt.

In August, former CEO Solly Mokoetle was suspended just eight months after being handed the reins, after failing to deliver a coherent strategy for the pubcaster’s turnaround.

Last week, acting CEO Robin Nicholson was forced to defend his reputation in the press, as rumors continued to swirl of a plot to unseat him.

Roughly 80% of SABC’s $864 million annual funding comes from advertising, with 18% supplied by licensing fees and just 2% from the government.

Given the advertising downturn, analysts say there’s no clear sign of how the SABC will repay the $145 million it owes the South African government.

Though the pubcaster halved its losses in the past fiscal year, the improvement came on the heels of strict austerity measures that have prevented it from spending on new programming.

But the company is still overstaffed and prone to wastefulness. For example, an investigative report last year found SABC spent tens of millions of dollars in licensing fees on foreign films whose licenses expired before they were broadcast.

The pubcaster’s financial woes have dealt a huge blow to the local TV biz.

“The whole industry started to collapse, because the major source of revenue is the SABC,” says Kate Skinner, spokeswoman for the SOS: Support Public Broadcasting Coalition, a group that includes NGOs, trade unions and independent players in the TV industry.

SABC execs now face a parliamentary hearing to get to the bottom of what Skinner called a “governance crisis” in a pubcaster that has had three executive boards in the past two years.

“Some very tough decisions need to be made by the board in terms of ensuring that the SABC is taken back tosustainability,” she says. “You need a strong united board and very powerful oversight structures to make that happen.”

With the board riven by divisions and plagued by corporate governance breeches, Skinner said the government needs to step in to help the pubcaster get its house in order.

“Unfortunately, parliament hasn’t played as rigorous a role as it should have,” she says.

SABC execs remain tight-lipped ahead of this week’s hearings.

Spokesman Kaizer Kganyago says the pubcaster doesn’t want to jeopardize the parliamentary debate with any preemptive statements, and wouldn’t comment on a possible new direction for the SABC until after parliament reaches its conclusions.

Skinner called the current round of hearings the first step in a long process of rebuilding the SABC, but said their success rested on a “total commitment to transparency.”

“If there’s real truth-telling … there is a real possibility of moving forward,” she says.

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