The SABC has signed a settlement agreement worth R170 million with the Competition Commission – more than the beleaguered public broadcaster’s available cash at the end of its past financial year.
The deal follows nine previous settlements by members of the cartel, which colluded to set advertising rates with identical discounts for vetted larger advertising agencies while giving smaller agencies uniformly worse deals.
The SABC’s settlement is second only to the R180 million settlement that DStv, the sister company to City Press’ owner Media24, agreed to earlier.
Media24 previously agreed to a settlement of R30 million.
Two other settlements in the cartel were announced this week, bringing the total to 12 companies.
Primedia settled for R85 million and Ster-Kinekor for R3.6 million.
This brings the total settlements with media companies, including Caxton and Independent Media, to R486 million.
These settlements consist of a fine component, a separate contribution to the Economic Development Fund and the provision of discounted advertising space to small ad agencies who suffered at the hands of the cartel.
The SABC, DStv, Primedia and Media24 were by far the largest culprits.
The settlement will significantly add to the SABC’s financial woes.
In his budget speech last month, Finance Minister Tito Mboweni specifically mentioned the state-owned broadcaster as one of the likely beneficiaries of a government bailout, the funds for which would come from a R13 billion contingency reserve.
It was not revealed how much the broadcaster might receive, but, according to the new regime for state-owned enterprises announced by Mboweni last month, it would come with the appointment of an external chief restructuring officer who would be tasked with trimming the fat at any bailout recipient.
In its previous annual report, the SABC noted a cash holding of R131 million.
The portion of the settlement that the SABC will need to pay immediately comes to R90 million – almost 70% of what it has.
Giving away extra ad space to small agencies will cost it another R120 million over three years.
Neither the SABC nor the Competition Commission responded to City Press’ questions about the broadcaster’s ability to pay the fine.