SABC presents turnaround strategy to Parliament

Tuesday, September 25, 2018

Communications Deputy Minister Pinky Kekana has called on all South Africans to ensure the SABC is a sustainable organisation by paying their TV licences.

The Deputy Minister said this when the SABC Board and top management appeared before Parliament’s Portfolio Committee on Communications to present its turnaround strategy on Tuesday.

The presentation of the strategy also comes not long after the SABC Board announced that it would look at reconfiguring the organisational structure of the public broadcaster as a push is being made to cut operational and employee costs.

Kekana said all affected stakeholders, including Parliament and government, should play a role in making sure that the SABC is put on a path where it is able to discharge its responsibilities accordingly.

She said it was in everyone’s best interest to create an enabling environment for the SABC to become an employer of choice.

“We are looking at what is happening in the digital space and how pay TV and other entities that are in a similar position as the SABC are competing with it and it is in our best interest to make sure that we are able to assist it.

“We are also calling on our people to say it is in our hands and in our interest to make sure that we all sustain the SABC.

“We know the main revenue stream [for] the SABC has been the payment of TV licences and that has not been happening for quite some time. Whatever movie or soapies you see … it means you must pay [72 cents] a day as viewers and that has not been happening.

“That also brings other unintended consequences because if we don’t pay, it means even the staff of the SABC cannot be sustained. It also means we will not be able to view other content,” she said.

Kekana also used her presentation to announce that the SABC has secured the rights to broadcast the upcoming Global T20 Cricket tournament that will soon be hosted by Cricket South Africa.

SABC’s turnaround plan revealed

In a marathon briefing, Kekana was accompanied by SABC Board chairperson Bongumusa Makhathini, two non-executive Board members, and SABC’s senior managers, who took turns to present different aspects of the turnaround strategy.

Makhathini said one of the priorities for the Board, upon their appointment and to implement the strategy, was to appoint a competent team of executives.

He said optimising the financial stability of the SABC has always been in the agenda, and that in 2009, the National Treasury, as one of its conditions that accompanied a government guarantee, informed the public broadcaster that it must reduce its employee costs in order to be sustainable.

“In 2018, employee costs are still the biggest cost driver at the SABC and continue to be out of step as a percentage of revenue. It is sitting at about 42% of the total revenue, which is an anomaly,” he said.

Section 189 of the Labour Relations Act


Makhathini said with regards to Section 189 of the Labour Relations Act, which governs the process of restructuring, the Board has consulted with organised labour and employees to communicate that the SABC is “contemplating on embarking on the Section 189 process”.

“This process must fully comply with the Labour Relations Act and therefore it would have been improper for the employees to first hear about this process in a public meeting with this committee, and that is why we had to start engaging with labour so that we can work together in a consultation process and that [process] will result [in] a buy-in and alignment on how we will be proceeding in our cost-cutting drive,” he said.

He said that Communications Minister Nomvula Mokonyane, as the Board’s government shareholder representative, has been consulted about the Section 189 notice.

Turnaround strategy – three main elements 

Makhathini said the Board was committed to implementing the turnaround strategy.

He said the turnaround plan comprised of three main elements – addressing a legacy of governance challenges; looking at the regulatory and policy issues; and thirdly, attending to the commercial and operational element.

“We have [embarked on a drive] to address all governance and legacy issues that faces the SABC, including issues raised by the public protector and those that were raised by the [Ad Hoc Committee on the SABC Board Inquiry].

“The Board has been taking a lead in highlighting the regulatory impact of ICASA and Ministerial regulation on the SABC financial viability… in particular, the … sports rights, the DTT [digital terrestrial television] and the TV licence regulation.

“The third element of our turnaround strategy, which is a major focus for today … is the commercial turnaround plan, which in itself has about 15 different focus areas. So beyond the cost-cutting, there is about 15 other areas that the turnaround focuses on,” he said.  


Group CEO Madoda Mxakwe said out of SABC’s total expenditure of R7.3 billion for 2017/18, the broadcaster’s major cost drivers were employee costs, which stood at R3.1 billion, or 41%, followed by programme, film and sports rights, which cost R1.7 billion, or 23% of the expenditure budget.

Other costs include signal distribution, which cost R718 million, and broadcast costs, which equate to R486 million.

SABC’s Chief Financial Officer Yolande van Biljon said the public broadcaster’s mandate has, in the past, been funded from TV license revenue and government guarantees.

While there were high expectations to deliver on all mandate obligations, she said there was a critical need to prioritise mandates that contribute the most value.

Among these, the SABC needs to broadcast content that stands out from its competitors, and do more to provide the national audience with a distinctive mix of quality programming that offers greater value than satisfying only individual tastes. –