SABC PRESENTATION TO THE PARLIAMENTARY PORTFORLIO COMMITTEE ON SPORT

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SABC PRESENTATION TO THE PARLIAMENTARY
PORTFORLIO COMMITTEE ON SPORT

Prepared and presented by Sizwe Nzimande
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THE CURRENT LANDSCAPE

• Sport and the business of sport has experienced
  monumental shift in the past 10 years
• This monumental shift has not been all inclusive
  and has been prevalent in the so called Top 10
  sports.
• These top 10 sports are listed as follows
  Soccer, Cricket, Golf, Basketball, American
  Football, Formula 1, Tennis, Boxing, Baseball and
  MotoGP
• The costs related to running and administrating
  these sports has grown well above the average
  rate of inflation.
• This has had major impact not just on sponsors
  but on broadcasters around the world

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THE CURRENT LANDSCAPE

• The highest paid footballer in South Africa
  currently earns just over R500 000 a month vs.
  R32000 a month at his peak 10 years ago
• The first Springbok contract in 1994 was for
  R500000 per annum, today they are over R5.7
  million for the same type of contract
• TV broadcast rights to the same PSL matches
  recently got sold for a fee that the SABC could
  not have afforded on its current funding model.
• All in all sport and the broadcasting of sport
  have become big business and that big business
  comes at a price tag that is proving very
  challenging for many public broadcasters across
  the globe such as SABC, BBC, and ABC.
• To ensure that SABC Sport can continue to do its
  public mandate and deliver
• deliver sports of national interest to the
  public, there needs to be a review.

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THE CURRENT LANDSCAPE

• KEY CHALLENGES WITH THE BROACASTING OF SPORT OF
  NATIONAL INTEREST
• There are some key challenges that are making the
  broadcast of sports of national interest even
  more challenge for the SABC and these challenges
  if not managed will lead to the SABC not being
  able to broadcast sports of National interest in
  future.
• The current legislation in the ICASA Sports and
  Events of national interest bill does not offer
  the SABC any protection against what can be
  termed as the free market. The SABC must compete
  equally on commercial terms with all broadcasters
  in the market.
• However the SABC carries an added responsibility
  of carrying our mandate and broadcasting not just
  the profitable sports but sports that are of key
  focus to the country. This adds an added cost
  liability which private broadcasters
• do not have

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WHAT DOES THIS MEAN FOR SABC SPORT?
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THE CURRENT LANDSCAPE

• KEY CHALLENGES WITH THE BROACASTING OF SPORT OF
  NATIONAL INTEREST
• The SABC is not funded like other public
  broadcasters in other countries such as the UK
  and Australia, this means that every public
  service that the SABC does must be paid for by
  moneys that the SABC raises from the private
  sector.
• 75 of the income that the SABC generates comes
  from advertisers and sponsors, with the economic
  down turn in the past 5 years adervtisers and
  sponsors have reduced their spend with the SABC
  by up to 50 in some cases.
• This decline in spend has lead to the SABC not
  being able to meet as much of its pubic mandate
  as in the past.
• In short the cost of sports rights has increased
  and the SABCs income has decreased this has
  caused major cash short falls within the SABC.
• The planned alcohol advertising ban will make
  matters even worse

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THE CURRENT LANDSCAPE

• KEY CHALLENGES WITH THE BROACASTING OF SPORT OF
  NATIONAL INTEREST
• In 2005 the SABC was spending about R360 million
  on sports rights, in the 2013 to 2014 financial
  year, we are forecasting that we will need to
  spend about R850 million on sport.
• Sport is a very important element for pay
  broadcasters around the world and in particular
  the big sports such as Soccer, Cricket and Rugby,
  pay broadcasters are prepared to spend hundreds
  of millions to ensure that they buy these sports,
  these sports lead to subscription and
  subscription equals profits.
• With out subscription income it is almost
  impossible for the free to air broadcasters like
  SABC to compete with pay broadcasters.
• This will have a negative effect on the delivery
  of mandate and public
• service to the nation.

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LOOKING FORWARD
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HOW CAN FIX THIS?

• THE WAY FORWARD AND PROPOSAL
• The proposal is therefore that Government review
  the current ICASA bill on sports of National
  Interest to ensure that Free to Air broadcasters
  and in particular the Public Broadcaster is
  better protected in the drafting so that it can
  continue to broadcast sports of national interest
  well into the future.
• The second option is that Government starts to
  fund the Public Broadcaster as is done in the UK
  and Australia so that it can then compete in the
  open market a lot more efficiently and buy sports
  of national interest rights with out having to
  rely on funding from the private sector, through
  advertisers and sponsors as has been the case.

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THANK YOU