The SABC appears to have abandoned its goal to making a R1bn profit in the 2026/27 financial year. Coupled with the impending closure of Showmax, the state broadcaster’s position highlights the difficult terrain that media and entertainment players are navigating.
Instead of reporting a profit for the first time in more than five years as projected last year, the National Treasury has revised this expectation to a R41.3m loss for the SABC, saddled with higher labour and content costs.
Total revenue is expected to increase at an average annual rate of 6.4%, from R6.6bn in 2025/26 to R7.9bn in 2028/29, “mainly due to the increased collection of licence fees and revenue derived from sponsorships and advertising”.
Unfortunately, the national broadcaster expects that income will be matched by a similar increase in expenditure from R6.7bn in 2025/26 to R7.9bn in 2028/29.
While looking out of reach, making a profit is top of mind for the state broadcaster, Tendai Matore, acting CFO at the SABC, told Business Day in October.
To do this, it is working to increase its revenue, in part by monetising its digital platforms such as SABC+, its online video-streaming platform.
“We have already started commercialisation of the SABC+ platform. Obviously, we are at an early stage of that commercialisation, but the current numbers and our trading results leave us hopeful that we are on the right track and we can indeed derive some significant revenue diversification in the medium term,” Matore said at the time.
In October, the auditor-general, for a second consecutive year, issued an unqualified audit opinion on the corporation’s financial statements for the year ended March 2025.
Despite its ambition, the broadcaster saw a modest 1.3% growth in revenue to R5.152bn, which was outpaced by a 3% rise in expenditure to R5.435bn. Overall, it recorded a net loss of R253.3m for the period.
The SABC is one of the most commercially driven public broadcasters in the world. This is because funding from its parent, the state, accounts for only 3% of its budget.
Rivals such as MultiChoice fund their operations mainly through subscriptions and eMedia mostly through advertising.
In addition to allocations from the government, the SABC takes in money from TV licences. All these entities — including Talk Radio 702 owner Primedia and African Media Entertainment — compete for advertising revenue.
Over the medium term, “the corporation will focus on revenue generation initiatives that will include the optimisation of the SABC+ digital platform and partnership agreements in its efforts to improve its financial sustainability and address going concern challenges,” the National Treasury said.
“The corporation will also focus on digital transformation to take advantage of new platforms and emerging technologies. This will include using AI, exploring new strategic partnerships, maximising revenue from its content library and repositioning its image by building public confidence to make it a media platform of choice for all stakeholders.”
On the expenditure side, labour accounts for the largest portion of the SABC’s spend, with employee costs set to increase at an average annual rate of 6.2% to an estimated R2.3bn in 2025/26 to R2.8bn in 2028/29, “as the vacancy rate of 20% is reduced and cost-of-living adjustments are budgeted for”.
Spending on content acquisition is set to increase 13% over the medium term and spending on compensation of employees at an average annual rate of 6.2% over the same period.
Other costs, while smaller, are set to increase at a much faster clip.
For example, broadcasting costs are expected to rise 35%, from R515.7m in 2025/26 to R696.1m in 2028/29, while marketing may increase 23%, from R132.6m in 2025/26 to R179.1m in 2028/29. Direct licence collection costs are set to go from R89.9m in 2025/26 to R121.3m in 2028/29 as the marketing of new content and TV licence payment follow-ups will be intensified.
Even then, these are only estimates. In previous years the broadcaster has budgeted for a surplus only for it to end up in a deficit position.