Monday, March 9, 2009

SABC R784m in the red

Following reports earlier this week of lawyer Barry Aaron’s call for the liquidation of public broadcaster SABC, Acting CEO Gab Mampone admitted on 5 March at a Johannesburg press conference that the SABC expected a loss of R784m for the financial year end.

In the SABC’s official press statement, the reasons given for the “financial strain” were the global economic meltdown and the resultant decrease in ad revenue, the broadcaster’s funding model, rising costs of content, increase in universal access delivery, technology developments and the substantial expansion in news infrastructure. No mention was made of the costly legal battles between the SABC board and ousted former Group CEO Dali Mpofu.

According to Mampone, R400m of the current loss was attributable to loss in TV ad sales. SABC3 in particular had performed badly. However, he said the SABC plans to operate at a R55m profit next year and envisages a 14% growth in revenue by that time.

Financial manager Robin Nicholson noted that the corporation’s expenses had grown from R4.382bn last year to R5.595bn. He stressed that no permanent staff members would lose their jobs, although half of the 400-strong staff are freelancers.

The broadcaster’s digital migration process required a huge investment, as did preparations to broadcast the upcoming Confederations Cup and the 2010 FIFA World Cup.

Gampone announced that the SABC would implement the Austerity Plan which involves the freezing of vacant posts, optimisation of TV licence revenue and continuous engagement with government to find solutions on the funding of the organisation.

Meanwhile Aaron has withdrawn his legal application for the SABC’s liquidation on the promise that he will be paid the R450,000 owed to him. (Source: Business Day)

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