South African public-service broadcaster the SABC is facing a shortfall of more than R500m (€34.4m/$46.7m) in its sports coverage in the 2014-15 financial year, according to acting chief executive Tian Olivier.
Olivier told parliament that the high cost of sports rights is having a damaging impact on the broadcaster’s finances.
“The sports item puts us under pressure,” Olivier said. “If we have to continuously fund sport with R500m or R300m of our own cash year after year, eventually we will run out. It's not a difficult calculation to make. The cost of sports rights is very high. Unfortunately the revenue that we derive from this sports coverage does not cover the cost, and we need to talk about the sustainability of how we pay for sports rights going forward in the future.”
Olivier estimated that the broadcaster’s sports coverage would cost R930m in the 2014-15 financial year while estimated revenues from the coverage would be about R418m.
“In sport we have a shortfall of R500m,” Olivier said. “Given the cash flow position of the SABC at the moment we can sustain sport for a year but not for longer than that. The acting chief operating officer (Hlaudi Motsoeneng) is working on looking for sponsors for sport so that he can bring back that R500m in sport so that we can spend it again. We either need to find commercial funding for sport or we need to relook the regulations that we do not have this huge burden or mandate on us, or if possible, funding from the national treasury.”
Olivier added that the SABC’s planned sports channel is a “budget risk for the SABC.”