Embattled South African public-service broadcaster the SABC is today (Monday) set to receive around two-thirds of a ZAR3.2bn (€192.4m/$211.4) government bailout after it was found to have met five of eight preconditions for the funding.
The announcement was made by Minister of Communications and Digital Technologies, Stella Ndabeni-Abrahams, as the SABC continues to address its financial worries. The SABC’s annual report submitted to parliament last week detailed another financially difficult year for the broadcaster.
For the year ending March 2019, the Corporation reported a net loss of ZAR482.4m. This net loss was a 35 per cent improvement on the restated loss incurred in the 2017-18 financial year, but the broadcaster noted that one of the main contributors were losses incurred on sporting events. A further contributor to the loss was the decline in total revenue by three per cent to ZAR6.4bn.
The SABC was issued with a qualified audit opinion for the 2018-19 financial year after receiving a disclaimer the previous year. In February, the National Treasury announced that SABC would be considered for funding through contingency reserves, subject to certain preconditions.
Following a consultative process, SABC submitted updated responses to the set preconditions on August 30. These have been jointly assessed by National Treasury and the Department of Communications (DoC); revealing that of the eight preconditions, SABC has fully met five and partially met two, whilst one has not been met.
The government said SABC has succeeded in determining immediate cash requirements supported by detailed cash flow projections for the next 12 to 18 months; submitting a list of identified initiatives for revenue enhancement and costs-cutting initiatives; and conducting a thorough investigation into what caused its financial collapse.
The SABC is also judged to have provided an update of how the entity is dealing with the people implicated an investigation report; and developed a turnaround plan incorporating measures to prevent the reoccurrence of the identified factors.
The SABC is ruled to have partially met preconditions related to producing separate financial reporting for public and commercial broadcasting services; and identifying non-core assets for disposal to assist with reducing the recapitalisation requirement from government.
Based on the assessments of various factors, the government has ruled that the SABC can received ZAR2.1bn of the ZAR3.2bn today. The remaining balance will be transferred once the public broadcaster fully meets the remaining three outstanding conditions or firmly demonstrates evidence to comply.
Ndabeni-Abrahams said: “The SABC plays an integral role to inform, educate and entertain the public. As a department, we remain committed to ensuring a public broadcaster that is able to effectively discharge its mandate, whilst being a commercially viable organisation.”
The latest news comes after Cricket South Africa last week confirmed the extension of a rights deal with the SABC for the Mzansi Super League, with the broadcaster reportedly paying a rights fee for this year’s edition of the domestic Twenty20 competition.