SABC’s Survival at Stake: Auditor General Warns of Mounting Debt and Revenue Crisis

The South African Broadcasting Corporation (SABC) is teetering on the edge of collapse, with the Auditor General of South Africa (AGSA) raising red flags over the broadcaster’s financial stability and ability to continue operating as a going concern.

In a presentation to the Standing Committee on Public Accounts (Scopa) on Tuesday, the AGSA laid bare the SABC’s precarious financial situation—despite a slight improvement in audit outcomes from a disclaimer in 2022/23 to an unqualified opinion with findings for 2023/24.

But while the audit result signals progress in management transparency, the AGSA warned this does not reflect real financial health.

“There are still serious risks to the SABC’s long-term viability,” said Auditor General Tsakani Maluleke. “Debt levels are unsustainable, and revenue collection remains alarmingly low.”

A Legacy of Debt and Dysfunction

The SABC is currently saddled with R1.6 billion in debt—far exceeding its available cash of R400 million—and ended the 2023/24 financial year with a deficit. One of the largest debt obligations is to Sentech, the state signal distributor, where efforts to restructure payments have a “low chance of success,” according to the AGSA.

The broadcaster also incurred over R60.2 million in fruitless and wasteful expenditure, largely due to interest payments on outstanding debt.

Adding to the challenge is the SABC’s outdated revenue model. The AGSA pointed out that while the broadcaster should be collecting more than R4 billion annually through TV licenses, it only manages to collect around R700 million due to dismal compliance.

The Price of the Public Mandate

Running news channels, purchasing costly sports broadcasting rights, and providing mandated programming in multiple languages during prime time all add to the burden. Yet, there’s no direct government funding to support these obligations.

“The cost of fulfilling the public mandate continues to rise, while traditional income streams are in sharp decline,” the AGSA report stated.

Despite a government R3.2 billion bailout in 2019 meant to fund a three-year turnaround plan, the SABC’s financial position has not significantly improved.

Urgent Need for Innovation and Reform

While the AGSA acknowledged some positive developments—such as new content acquisitions and contracts—the underlying risks remain severe.

The report calls on the SABC to urgently reinvent its revenue model, including:

• Creating compelling, monetizable content

• Making sports content financially sustainable

• Expanding digital platforms to attract new audiences

• Increasing commercial revenue streams

“All of this is necessary to build viewership, improve ratings, and ultimately boost advertising and commercial income,” said Maluleke.

Is There Hope?

Despite the dire outlook, the Auditor General maintained that there is still a “reasonable and feasible basis” for concluding that the SABC can remain a going concern—provided critical interventions are implemented swiftly.

But without a bold new approach to revenue generation and more disciplined financial management, the SABC may become another state-owned entity in need of a bailout it can no longer justify.

{Source: BusinessTech}

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