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SABC's downsizing pays off
BROADCASTING
THE SABC has turned around its fortunes by increasing advertising revenue, improving the collection of licence fees and implementing tough measures to limit management bureaucracy. The public broadcaster made a R72-million profit in the first half of the current financial year, reversing some of the losses incurred in the past two years. Spokesman Enoch Sithole attributed the turnaround to the severe downsizing recommended by UK-based consultants McKinsey Consultants. In March the consultancy recommended among other things that the broadcaster shed 1 400 jobs, scale down offices and close some companies within the SABC group. McKinsey envisaged that these measures would save the broadcaster R450-million. In addition to implementing these measures, Sithole says the broadcaster has been able to increase revenue through its improved collection of licence fees to R6.5-million, although payment levels still fall short of the SABC's targets. Television and radio advertising revenue, which took a knock following the relaunch of the SABC as a public broadcaster, has also shot up.
"In the whole we managed to curtail expenditure while increasing our revenue base. "SABC has restructured its operational processes and is now implementing a strategy for revenue generation." In line with these targets, the broadcaster this week announced two new appointments which it hoped would strengthen its drive to ensure financial viability. Talib Sadik, appointed CE of finance and enterprises, said creating a business enterprise division was the key to identifying and exploiting business opportunities within the broader broadcasting industry in a proactive manner. Profit generated from this division would be ploughed into both TV and radio to "enhance the quality of programming". Trevor Ormerod, former Times Media executive, was appointed sales and marketing head. Since its relaunch the SABC has suffered losses, attributable to the cost of delivering on its public broadcasting obligations, smaller audiences and lower advertising revenues. However, in August CE Zwelakhe Sisulu declared the "worst is over" and outlined a series of renewal strategies, including the privatisation of operations divisions and radical changes for radio aimed at improving the state broadcasters' financial performance.
Sisulu also predicted that the SABC would make its first ever profit in the next financial year.
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