PRESS RELEASE : EMBATTLED TV INDUSTRY TO MEET COMMUNICATIONS MINISTER

1 July 2009

PRESS RELEASE

EMBATTLED TV INDUSTRY TO MEET COMMUNICATIONS MINISTER

While the nation’s attention is focused on the mud slinging and blame shifting that has been unfolding in parliament between the SABC’s dissolving board and senior management, the harsh reality is that production companies are continuing to haemorrhage as we lay off staff due to the ongoing non-payment by the public broadcaster.

The TVIEC will be meeting with Communications Minister Nyanda on Friday 3 July. We shall be providing the minister with insight into the realities on the ground facing the television industry and also be addressing the false information supplied by the SABC and the dangers that such misinformation poses to the thousands of jobs that make up the production sector.

On June 4 the TVIEC, who make all local TV content for the SABC [except for the news and sport] marched to SABC headquarters to highlight a crisis of national importance. This march was prompted by the simple fact that the SABC owes us (independent producers, actors, writers, directors, technical crew) millions of rands for work already done or in production. We were met with platitudes from the senior executive about working together through the crisis and promises of weekly meetings to resolve the crisis.

Our industry is still owed millions of rands and, a month on, there is little or no communication at all from SABC’s senior management.

In the midst of this long-running crisis, not a single board member or executive has accepted accountability for this mess. Instead they play a blame game. They gave themselves fat bonuses and continue to take home large monthly pay cheques. Worst of all, individuals on the board and the executive continue to lobby for positions. They have misread the mood of the country and have ignored President’s Zuma’s call for accountability of public servants. The present SABC cannot be trusted to save itself. We are calling for urgent action by the imminent interim board to lance the rot.

The TVIEC is heartened by the announcement of the Minister setting up a Ministerial Task Team looking broadly at broadcasting policy and legislation issues and shall be seeking to have representation on this team. We believe the failings of our public broadcaster are endemic and require fundamental review and correction.

A RESPONSE TO THE SABC’S MISINFORMATION

The SABC has attempted to mislead the public and the government by stating that their crisis is a result of the global economic recession and downturn in ad spend. This is a dangerous lie.

Anyone analysing the SABC’s annual financial reports (which have clearly been designed to make that task difficult) will quickly see that most of the SABC’s loss of revenue is entirely self-inflicted. The national broadcaster lost substantial sports sponsorships partly because it lost lucrative sports rights, but allegations also point to a turf war between its internal sports department and its sales department. The result of this mismanagement of sports revenue is a larger contributing factor than the economic recession.

Moreover, the SABC has mismanaged advertising rates and relationships as well as commitments resulting in significant refunds to advertisers.

Surprisingly for an institution of its size, it is also mismanaging revenue collections. To blame the loss of revenue on a downturn in advertising spend is misleading. Why are the other broadcasters not facing this crisis?

The SABC’s financial crisis is not merely a story of lost revenue. This is also a story of an organization that spends money recklessly with no concern for its core business – serving the public.

Perhaps an anecdote best represents this disregard for financial management: The SABC, eTV and DSTV all source foreign TV programmes from an annual four day jamboree in Hollywood, USA. DSTV sends three or four of its managers there to source content for 21 channels. The SABC sends more than 20 people there to source less than 30% of its content for three channels. Shockingly, even board members have attended this market over the last five years.

While anecdotes of board-endorsed profligacy abound, the other substantially mismanaged cost drivers include news and an increase in management staff.

The cost of news has increased substantially with no increase in news output for South African viewers nor an increase in the quality of coverage. Many costs can be attributed to vanity projects which deliver neither value for money nor adherence to license conditions. The SABC arrogantly walked away from its news offering on the DSTV platform to viewers across the continent for which it was paid R20-million per annum. Instead, it chose to create an expensive (reportedly more than R200-million per annum) 24-hour news service on the Vivid platform that has few, if any, viewers.

Over the last five years the SABC has substantially increased the headcount of its middle managers, especially in content. Just five years ago, some 25 commissioning editors commissioned content for three channels. Now more than 100 people populate the Content Hub, with no equivalent increase in workload. This increased layer of the “muddled middle” has caused major organizational confusion between content procurement and channel transmission. The SABC’s international acquisitions arm has acquired more than R75-million worth of content that the channels cannot use. It has also mismanaged its programme stock, resulting in wasteful write-offs. At the SABC, no manager gets fired for poor performance. They merely get redeployed and replaced with another person. This is how the headcount has increased across the board.

The SABC has also been peddling the myth that to solve the present crisis, they will produce content “in house”. The truth is that presently less than 40% of the content budget is spent on “outside” production – ironically on its most-watched genres. The SABC produces its news and sports “in house” at substantially higher costs per minute than it spends on independently produced content. While the SABC has some respected producers, journalists and crew, any production of its popular genres in-house will be a disaster because of its poor management capabilities.

We need real change, not empty promises.

The present leadership has over the last five years presided over some monumental blunders – not least of which was the loss of local soccer from our screens. The present crisis could lead to a loss of more programmes. As viewers we notice the small things too - the increased amounts of technical errors in transmission, the programmes that never run on time and the many changes to the schedule. This is not merely a financial crisis. This is mismanagement at its worst. Public institutions can be well run, responsive to society’s needs and financially self-sufficient. There is clear proof of this in other sectors. We deserve the same for the SABC too. But we need a real sense of urgency to fix it. We need a commitment to professional leadership. We deserve a public broadcaster we can all be proud of.

TVIEC’S RECOMMENDED WAY FORWARD

The TV Industry Emergency Coalition believes that the following actions will go some way to solve the present impasse and lay the foundations for the creation of a vibrant TV industry:

IN THE IMMEDIATE TERM:

· APPOINT A NEW LEGALLY CONSTITUTED BOARD. We are encouraged by the dissolving of the current board and an interim board being put into place to stabilize the organization while a new board is constituted. We call for the appointment of people committed to public service broadcasting, including representation from the independent TV production industry for the new board. We call upon the interim board to urgently meet with the production sector in order to assist us in this difficult period and to help with damage control where possible.

· APPOINT NEW EXECUTIVE LEADERSHIP. A new Group Chief Executive must lead the turn around strategy of the SABC and restore public confidence in the organisation. S/he must build a core team of competent and enlightened leaders unencumbered by the individuals who are tainted with the present mess.

· MAKE A PUBLIC COMMITMENT TO IMMEDIATELY PAY OUTSTANDING DEBTS. The SABC needs to create a ‘fast-track’ emergency system of payments of outstanding debts – including payments of repeat fees to actors, writers, musicians and producers. Its present excessive bureaucracy compounds the problem of cashflow. This schedule of payment must be made transparent to creditors. Despite numerous meetings and promises our industry is still largely unpaid and carries the burden of debt.

· CONDUCT AN INQUIRY/AUDIT INTO THE PRESENT CRISIS. An Inquiry must be conducted to properly investigate the causes of the present crisis and hold the present board and executive accountable in terms of the Public Finance Management Act (PFMA). The public needs to know what the leadership has spent the money on – including a report of the expense accounts of the top leaders. A culture of accountability will go a long way to prevent future abuse of the SABC.

IN THE LONGER TERM

· REVIEW AND MODERNISE COMMISSIONING AND TERMS OF TRADE. The SABC still uses apartheid-era production contracts that fix prices/rates for talent as well as apartheid-era business practices including blacklisting, bullying, and micromanaging independent businesses. There is an urgent need to change this. Moreover, the terms of trade are unfair. They place all risk on the producer and undermine any possible self-sustainability. These terms of trade should be negotiated under the guidance of an independent mediator. In addition, the SABC must commit to commissioning programmes in regions other than Johannesburg.

· PLACE INTELLECTUAL PROPERTY IN THE HANDS OF ITS CREATORS. Presently, the SABC owns all the intellectual property rights of the content we develop and produce. The SABC has failed to exploit this content by selling it to broader markets. This discourages creativity, innovation and entrepreneurship. After a lifetime of content creation, the creator owns nothing. Independent producers are unable to build a sustainable industry if they cannot own what they produce.

· AN ICASA-LED REVIEW OF COMPLIANCE TO REGULATIONS. We believe that the SABC is in danger of being in flagrant violation of broadcast regulations. ICASA needs to act urgently to protect the integrity of the broadcast environment and to act in the public’s interest. This review of SABC compliance should cover all aspects of its license conditions and include public hearings on SABC performance.

· REVIVE THE SPIRIT OF PUBLIC SERVICE BROADCASTING. The SABC has killed the spirit of public service broadcasting that was initiated at the dawn of democracy. The spirit of inclusiveness, consultation and citizen partnership created by the new government must benefit public broadcasting too. The new SABC must act in partnership with the independent production sector and other important civil society stakeholders to create great public broadcasting.

Again we state our commitment: We are not fighting against the SABC, we are fighting for the SABC.

FOR FURTHER INFORMATION: tvcrisis@gmail.com

This press release is written on behalf of the TVIEC (Television Industry Emergency Coalition) which consists of: IPO (Independent Producers Organization), SASFED (South African Screen Federation), TPA (The Producers Alliance), DFA (Documentary Filmmakers Association), WGSA (Writers Guild of South Africa) as well as the CWU