The SABC owes Sentech over R700 million.

• The SABC’s failure to pay it’s debt to Sentech puts the signal distributer at risk of collapse, according to the deputy communications minister.
• The SABC itself is in a perilous financial position.
• The minister slammed the SABC’s aggressive revenue increase forecasts.
• For more stories, visit the Tech and Trends homepage.

The failure of the South African Broadcasting Corporation (SABC) to service its debt to Sentech, the state-owned South African signal distributor, puts the signal distributor at risk of collapse.

So said Deputy Communications and Digital Technology Minister Philly Mapulane at a Communications and Digital Technologies Portfolio Committee meeting, where the SABC presented its corporate plan.

“One of the things that has been a concern to us in the ministry has been the escalating debt of signal distribution cost that the SABC owes to Sentech,” he said.

Mapulane said that the SABC owed Sentech R745 million by the end of September this year. This is equal to half of the budget of Sentech.

“If this is allowed to continue like this it’s going to impact heavily on the sustainability. It is already impacting heavily on the sustainability of the other entity in the department which is Sentech and has the ability to collapse this other entity.”

He appealed to the leadership of the SABC to pay the outstanding fees to Sentech, in spite of their ongoing concerns regarding the fairness of the payment arrangement.

The SABC expressed its own concerns regarding its ability to stay afloat. 

Chief financial officer Yolande van Biljon laid out the aggressive revenue increases that the state broadcaster has forecast to stave off financial sustainability concerns.

Despite consistent decreases in revenue over a number of years, the SABC is predicting a revenue increase of 38% for the 2024 financial year.

Van Biljon said that: 

She acknowledged that the revenue forecast was “very aggressive”.

“Our concerns are directly linked to the performance of our commercial revenue. We are funded from revenue. We have no other funding sources. So if our revenue growth does not live up to expectations then our going concern is under significant pressure.”

Van Biljon explained that 35% of the content displayed by the SABC during prime time – between 18:00 and 20:00 – was not monetisable as mandated.

This meant that the SABC could only commercially benefit from 65% of the content displayed in that time.

Unrealistic

Mapulane immediately suggested that the SABC should revise its revenue increase projections downwards.

He explained that the public broadcaster’s second-quarter performance report revealed that it had already made a net loss of R464 million for the year to date. 

“Whilst the corporate plan is projecting a surplus in terms of revenue, already the information that is at our disposal in terms of the second quarter performance report indicates that there has been a net loss of just below R500 million,” he said.

Mapulane added that the revenue projection figures “are not consistent with the evidence that has been presented”.

He said the SABC had not been able to turn things around financially in previous attempts.

“Despite the huge capital injection and the turnaround plan which was implemented over three years, the SABC has not really managed to turn around.”

Restructuring

For Sentech’s part, there have been long-term plans that have been discussed regarding a potential merger of the state-owned company with Broadband Infraco to form a state digital infrastructure company.

It was recently revealed in a set of parliamentary questions that Sentech spent R2.5 million over a period of three years, printing out copies of it’s integrated annual reports. 

READ MORE | Government entities rack up enormous printing bill

In 2022/23 Sentech spent an average of R6 792.43 for each of the 120 copies printed.

Sentech spent the most overall on printing integrated annual reports of the 45 different entities compared by News24 over the period.