South Africa: SABC’s lost millions ‘not our fault’


The SABC expects pre-tax losses of almost R800-million this year and has gone, cap in hand, to the Treasury for help. Acting chief executive Gab Mampone said last week the broadcaster was now “monitoring and stopping unnecessary spending” as part of a wide-ranging turnaround strategy. by Buddy Naidu

He said the fact that the broadcaster was in the red and surviving on overdraft was due to “external factors”, mainly the global economic climate.

At least R400-million of the R784-million in losses was attributed to the loss of advertising revenue from multinational companies, said Mampone. Expenses for the 2009 financial year were R5.5-billion, up R1.2-billion from the previous year. The Times reported on Wednesday that the broadcaster was facing a deficit of about R700 million - which SABC spokesman Kaizer Kganyago repeatedly denied.

Mampone, his managers and several SABC board members, including chairman Kanyi Mkonza, put up a united front as they tried to explain the financial crisis crippling the parastatal. Earlier they spoke to SABC staff as rumours swirled through the SABC’s Auckland Park headquarters about retrenchments and pension fund money being used to pay salaries. Mampone and Mkonza vehemently denied both claims.

Board member Bheki Khumalo said that, though there was no need to panic, it was now “business unusual at the SABC”. Mampone admitted to having “issues over liquidity”. He said the broadcaster had expected growth of 20 percent but was not prepared for such a harsh credit crunch, which resulted in growth reaching only 2 percent.

He said his team met Treasury officials on Wednesday to, among other things, “seek a guarantee” because the corporation was renegotiating its overdraft facility after it had been “withdrawn ”. Mampone’s chief financial officer, Robin Nicholson, later said that the “banks still have some confidence in the SABC - even if others don’t”.

Mampone and Mkonza announced several cost-cutting measures, including:

• the freezing of all posts unless an appointment was “absolutely necessary”;

• the closure of some news bureaux worldwide, reputed to have cost between R3-million and R5-million to set up;

• clamping down on or “reducing” foreign trips by all staff; and

• a review and reduction of the use of consultants and freelance contractors.

Mampone said the corporation would lobby the department of communications to introduce “marginal” TV licence increases each year. The last two increases, he said, were in 1998 and 2004.

He said millions had already been spent on infrastructure. Mampone said the SABC hoped its debtors’ book “would return to normal” in the next six months.

Lawyer Barry Aaron last week withdrew his application in the Johannesburg High Court for the liquidation of the broadcaster, which he said owed him R450,000 in legal fees. He reached an out-of-court settlement with the broadcaster. Aaron told Sapa if he were not paid immediately, he would apply to have the matter reinstated.