SABC has a plan to turn R1-billion annual profit

The South African Broadcasting Corporation (SABC) expects to report a nearly R1-billion profit in 2026/27, the National Treasury revealed in its Budget Review document.

The public broadcaster has been loss-making since the 2014/15 financial year, and in its latest annual report, it recorded a loss before interest and tax of R192 million.

The Budget Review document includes a forecasted statement of financial performance, in which it estimates that the SABC will record a loss after interest and tax of R27.5 million in 2025/26.

This will be followed by a R907 million profit after interest and tax in the 2026/27 financial year and R784 million in 2027/28.

At the same time, it expects to collect R6.95 billion in revenue in 2025/26 and R7.75 billion in both 2026/27 and 2027/28.

“The corporation will focus on addressing its financial stability over the medium term. It has developed a strategy that details clear actions on new commercial capabilities to deepen its digital transformation to take advantage of new platforms and emerging technologies,” Treasury said.

“This will be done through increased commercialisation of the recently revamped over-the-top platform known as SABC+, for which the broadcaster aims to have 1 million registered users in 2027/28.”

The public broadcaster will also increase commercialisation of its social media platforms, including TikTok and WhatsApp, to target a growing online audience.

The free-to-use SABC+ streaming platform currently has an estimated 500,000 registered users, which the public broadcaster hopes to increase to 750,000 in 2025/26 and reach one million by 2026/27.

Curiously, the Budget Review document lists similar subscriber base targets of one million users for both 2026/27 and 2027/28.

The SABC expects to obtain 78.3%, or R17.6 billion, of its revenue over the medium-term expenditure framework (MTEF) from advertising and “other commercial activities”.

“Total revenue is expected to increase at an average annual rate of 6.2 per cent, from R6.5 billion in 2024/25 to R7.8 billion in 2027/28, mainly from the collection of licence fees and advertising revenue,” said Treasury.

The public broadcaster relies on TV licence fee collection for part of its funding. However, TV licence avoidance has been increasing steadily since 2019.

According to former SABC chief financial officer Yolanda van Biljon, the SABC billed around R5 billion in TV licence fees in 2023/24. However, it only collected R726 million of this amount.

The avoidance of paying TV licence fees has increased each year since 2019, when the avoidance rate was 69%. TV licence avoidance rates from 2019 to 2024 were as follows:

• 2019 — 69%
• 2020 — 81%
• 2021 — 82%
• 2022 — 82%
• 2023 — 84%
• 2024 — 86%

The Department of Communications and Digital Technologies wants to rework the public broadcaster’s funding model to improve its financial situation.

The long-awaited SABC Bill was expected to provide a roadmap for reworking the funding model. However, it effectively kicked the can down the road.

Among its proposals was that the communication minister must develop a sustainable framework for funding the SABC within three years of the bill’s adoption.

Unhappy with the bill, South Africa’s communications minister, Solly Malatsi, cancelled and withdrew it in November 2024.

Malatsi, a DA MP in the Government of National Unity, said the bill lacks a credible funding model, a view shared by several broadcasting experts, former SABC executives, and media watchdogs.

“This approach does not meet the urgency required to stabilise the broadcaster and risks perpetuating an outdated licensing structure that will not provide the SABC with the necessary resources to fulfil its mandate,” he said.

The bill’s withdrawal has led to run-ins between Malatsi and his contemporaries in the ANC.

Khusela Diko, chairperson of the Portfolio Committee on Communications and Digital Technologies, said Malatsi’s decision to scrap the bill would “sound the death knell for the SABC”.

Shortly thereafter, the Presidency issued a statement clipping the wings of cabinet ministers, saying they were no longer allowed to withdraw draft legislation without the approval of the President and Deputy President.

Additionally, the Presidency has said that the new rule would retroactively apply to Malatsi’s action — something the Democratic Alliance (DA) has disputed.

The Minister also locked horns with National Assembly speaker Thoko Didiza over delays in gazetting the bill’s withdrawal.

“It’s very clear that there is stalling from the Speaker’s office to withdraw the bill, which is extraordinary because that would be in violation of the very same rules she’s supposed to uphold,” said Malatsi.

Diko slammed his comments directed at Didiza, describing them as unwarranted and unconstitutional.

However, Malatsi remains steadfast and plans to leverage various legal avenues to reinforce his decision to withdraw the bill.