SABC Is Spending Billions On Salaries! Is That Why It's Neck Deep In Trouble?
The South African state-owned broadcaster is in over its head in financial turmoil, and its biggest cost-driver is salaries.
With a salary bill that is R3.1bn, representing 42% of revenue, the SABC is in the deep end and desperately needs rescuing.
In September, the SABC board and management unveiled a 105-page turnaround plan to the South African parliament to convince its lawmakers that this plan was different to previously failed strategies.
Right at the core of the organisation’s financial dilemma is a complete disconnect between costs and revenue. The SABC had accumulated a debt of over R1.3bn and in 2017/2018 reported a loss of R622m.
Independent television producers and employees are feeling the impact of the SABC’s troubles as salaries are sometimes not paid on time.
A government guarantee would enable the SABC to borrow funds to pay down its debt of R1.3bn and stabilise cash flows, but the organisation would have to convince its lenders that it would be able to repay the loan; therefore, cost-cutting would play a critical role in putting the lender’s mind at ease. The SABC has also proposed to improve on their collection of TV licence fees to gather more funds.
Other commercial plans include reducing sports rights costs, regenerating television and radio advertising revenue and getting paid for SABC1, SABC2 and SABC3, which are currently carried by for free by the competitors.
Salary cuts for top management would be a sure way to solve the R3.1bn staff cost problem as over the years there had been irregular promotions and random salary increases for hundreds of employees, as well as disrespect for recruitment policies.
At this point, it has become clear that to secure a financially stable future, SABC has no choice but to make some incredibly tough decisions.