Out of cash SABC seeks R1.5-billion bail out

The SABC is out of cash and is sitting on a deficit of almost R800-million.

The broadcaster is seeking a bail-out of R1.5-billion.

"Cash flow has been aggravated by rights payments [the costs of programme purchases] and slow-paying debtors," said Robin Nicholson, the SABC's chief financial officer.

Independent producers have not been paid, workers will not receive annual increases and various other debtors complain about not being paid. Government is the biggest advertiser on the SABC and its slow payment systems are a key factor in the crisis.

SABC News International, the sprawling empire of former editor-in-chief Snuki Zikalala, has been the largest cash-drain. Three of its 12 bureaux have already been closed and more are likely to go. The channel's start-up costs were estimated by Empire magazine at R240-million for 12 bureaux and a R45-million studio, and budgeted annual running costs run at R60-million.

Now just a year old, the channel has not made one cent in revenue. Analysts suggest that viewership never climbed beyond a few thousand eyeballs as costs escalated.

The SABC is likely to seek loans of R1.5-billion on the financial markets backed by support from government. In addition, it is lobbying the South African Revenue Service for VAT exemption on TV licence payments and for a state subsidy for those South Africans who watch television and listen to the radio but who are too poor to pay the broadcaster.

Officially in austerity mode, the SABC has promised an end to profligacy.

Some other areas to watch out for include:

• A 70% increase in the cost of consultants, from R129-million in 2007 to R220-million in 2008. At the same time permanent headcount has grown, suggesting there are two parallel sets of staff running the place.
  
  
• Matilda Gaboo, the SABC's former head of international programme buying, spent R49-million on programmes that were never aired, according to an internal audit report and one by Cliffe Dekker Hofmeyr and Comperio Forensics. The Sunday Times reported that only 38 of 165 deals done by Gaboo had been analysed by March, suggesting the wasteful expenditure might be much higher.
  
  
• Mafika Sihlali, the SABC's former legal officer, allegedly defrauded the broadcaster of R1.8-million.
  
  

In 2008, the year in which the SABC suffered serial management failures, the top dogs rewarded themselves with massively inflated incentive bonuses:

• Former news and current affairs boss Snuki Zikalala: R2.25-million, an increase of 46.05% a year;
  
  
• Acting chief executive Gab Mampone: R1.95-million, an increase of 230%;
  
  
• Chief people officer Phumelele Ntombela-Nzimande: R1.7-million, an increase of 59.72%;
  
  
• Acting chief operating officer Mvuzo Mbebe: R1.9-million, an increase of 30%; and
  
  
• Chief financial officer Robin Nicholson: R3.3-million, an increase of 18.4%.