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Johannesburg – The SABC’s mandate means it will always start its financial year at a loss, acting COO James Aguma said on Thursday.
“It’s like you are an athlete running against Wade van Niekerk, but before you start they put a 10-kg bag of sugar on your back,” he told reporters at the SABC’s financial results announcement.
Aguma said the SABC made a loss of R 411 million in the 2015/2016 financial year. In the 2014/2015 financial year, it reported a R395m loss.
The SABC had to keep a focus on its mandate, which communications authority Icasa determined.
“Whether it gives you revenue it does not matter, we just have to do it. We covered elections and it does not give revenue."
He attributed the current loss to the fact that the SABC had to cover events of national importance, including former president Nelson Mandela’s funeral and the Rio Olympics.
Covering Mandela’s funeral cost a “handsome sum of money”. Reporting on such events provided a huge social return on investment, but a negative financial return.
Other factors contributing to the loss were that it received less than 3% of its funding from government, growth in post-retirement service costs, and the impact of tax adjustments arising from previous years.
Aguma said sports rights had been unpredictable over the recent financial year, at times growing by 300%. This left the broadcaster no option but to buy them at a higher cost in order to fulfil its mandate.
Former COO Hlaudi Motsoeneng said he did not see the results as a loss.
“If we are to compete, I think the SABC would do very well if we played in the commercial space. But we are not in the business of profit-making,” he said in his new capacity as group executive of corporate affairs.
