Sunday, January 17, 2010

TVIEC Update

15 January 2010

2010: TVIEC Campaigns
Report back: State of the Industry Survey
TVIEC Press Release 18 December 2009
TVIEC Press Release 5 January 2010
TVIEC Open Letter to the New SABC Board 7 January 2010

Dear fellow industry professionals

As you are aware, the Television Industry Emergency Coalition (TVIEC) was created in 2009 as a result of the SABC crisis of non payment and operational meltdown and the ensuing drama that unfolded.

This was a coming together of independent filmmakers: actors, crew, writers, producers, post prod crew, facilities and the unions in a joint effort to save our industry.

We had all hoped that the TVIEC could have disbanded by 2010, having played its part in resolving the SABC crisis, however sadly this has not been the case. There remains an ongoing problem getting the outstanding debt paid, operational problems have not been addressed at all and there is an increasing new debt in the form of royalties and repeats.

However, the new SABC Board and GCEO are in place and we are encouraged that finally we have structures that are accountable and permanent as opposed to the “interim” and “acting” roles that have been managing (mismanaging) the SABC into and during the crisis.

Sadly the crisis is far from over. As you will see in the results of our industry survey below, unemployment within our sector is sky high and we pre-empt the SABC will take some time before new commissions start to flow as they restructure. Even with a more promising new SABC Board in place (one that includes four of the TVIEC’s nominations), it is critical we remain vigilant, involved and ensure that the agenda of the independent sector is at the forefront: Building a sustainable independent production industry and ensuring cast and crew are paid timeously and fairly.

The TVIEC committee is committed to ensure that out of this crisis come changes to the fundamental problems that have stifled and frustrated our industry. We will continue with our work in 2010 with the aim to bolster and rebuild our public institutions – from the SABC to ICASA and the NFVF until we collectively, through our various organisations, agree that the crisis period is over and our organisations can resume the normal duties of managing their membership needs. We will do so by whatever means are prudent – lobbying, engaging and protesting if necessary.

2010: TVIEC Campaigns

Local Content and Terms of Trade. As an industry we need to continue to campaign to promote local content and to strengthen the SABC. The TVIEC will continue meeting with stakeholders, including the new SABC Board and the new GCEO. We will restate our position on the crucial issues – the commissioning of local content, cumbersome operational procedures, terms of trade with the corporation, intellectual property and the urgent payment of outstanding debts to producers, writers and actors.

The key focus for 2010 will be to win the battle for Intellectual Property ownership. The TVIEC will convene an IP workshop, plan a campaign and take it to stakeholders and to the streets.

High on our agenda needs to be transformation and the future generation of South African filmmakers and the role played in their development by institutions such as the NFVF that are tasked with serving our filmmakers.

Similarly, we need and demand a bold, independent broadcast regulator and will continue to campaign for ICASA to become more than a lame duck.

Report back: Industry survey

At the end of 2009, the IPO and SASFED completed a report on the state of the television industry to present to government and stakeholders in an appeal for distress funding and support. Thank you to everyone in the TVIEC who responded to our online questions and phone calls.

Summary of the IPO/SASFED report on the impact of the global and SABC financial crisis on the independent TV production sector

The 2008/2009 SABC financial and management crisis has resulted in an
immediate and drastic reduction of income and certainty to the independent television production sector (excluding commercials, servicing and film). An estimated R500-million in anticipated annual commissions (some already contracted) has been ‘put on ice’. This together with outstanding debts and royalty payments projects over
R600-million estimated loss in production spend this fiscal year.

Estimated Annual Income 2008:
With an economic multiplier of 2.5, this has resulted in over R4.125 billion in GDP activity over the past year. The bulk of this (65%) is derived from SABC local content requirements across 3 channels. (Predominantly S1 & S2)
Estimated Number of Active Production Companies (excluding
feature films, sports and news, facilities/post). Turnover (in millions):
1 70 – 100+ 4 – 5 companies (Mainly long running soap/format)
2 35 - 70 8 – 10 (Drama and long running)
3 10- 35 15 - 20 (Drama and Doc)
4 5 - 10 15 - 20
5 Under 5 80 - 100
We estimate a further 30 to 40 companies who trade within the bigger prod houses and have not reflected them herein as their income is already contained in above stats.
Employment - Individuals and Skills (Excluding facilities and post):
Category Permanent Contract Regulars Freelance
1 450 250 2500 6000
2 250 350 2000 10000
3 200 200 2000 8000
4 140 200 500 4500
5 160 250 250 4000
Total 1200 1250 7250 32500
The SABC’s shift from internal production to outsourcing has resulted in large-scale job creation and skills transfer. The above indicates an estimated 42 000 people are employed over the course of a year to service these needs - and a further 105 000 jobs were created in support services. An estimate of 70% of above reflects employment of previously disadvantaged individuals.

The IPO/SASFED undertook a survey over the period 15 October to 5 November 2009, which entailed a manual interview process by telephone and e-mail.
Companies Surveyed: Production 45; Post Production 9; Studios 5; Facilities 7. Total 66

Anecdotal Quotes from Respondents
“We are refocusing our business to outside our borders throughout Africa” – Large multifaceted production house
“We have retrenched all our staff” – small high end drama company
“I am losing my house. My car has been reposed and I am struggling to make payments” – highly regarded black director
“If we are not contracted by SABC within next 2 months, we will liquidate” – small production company focusing on live television.


Loss of turnover
Respondents were asked to report on their estimated drop in total turnover for the
current/forecast year. These responses were analysed in terms of size and impact.
The result showed that the impact of the crisis is not even across the market, but is more severe, on average, the smaller the organization.

Production Companies
Estimated Average Turnover Loss (R millions)
Category % avg loss T/O Avg TOTAL
1 10 85 43
2 30 50 120
3 50 20 200
4 60 7 71
5 70 2 126

Estimated Average Turnover Loss 2009/10 (R millions)
Category % avg loss T/O Avg TOTAL
1 10 75 38
2 30 40 60
3 50 20 80
4 66 7 46
5 70 3 32
Total lost revenue R725-million (which is a loss of 31% overall)

This implies a total capital at risk of R303-million or 32% of the total capital in the industry.

Job losses
The survey on job losses was focused primarily on jobs in the production sector, as this is by far the major employer in the value-chain of the industry.
Jobs Lost: 17 171

Multiplier effects
The survey looks at direct activity in the industry. With the accepted industry multiplier of 2.5 the key indicators of distress are as follows:
Total turnover loss R1.9 billion
Job losses in production 42,000

For discretion we have not listed the names of companies that have informed us of closure or near closure but have instead provided a profile of a few. Our estimates are that approx 15 companies have closed with a further 20 just clinging on.

Companies with little or no reliance on the SABC continue to show distress, at a level from 20 – 38%. This has been taken as an indicator of non-SABC specific downturn in the industry, and is in line with anecdotal industry estimates of drops in activity, advertising spend and volume of 15-30%.

A theoretical amount of R788 million of total capital would need to be invested again in the industry, simply to return to the level of 2008. A major part of this is the cost of re-training skilled workers, and can be avoided if recovery is rapid.

Demand on the independent production sector for content in the digital environment will be 400 to 500% greater than current levels. With 3 multiplexes of 8 to 10 channels, 2 of which are non-subscription, this means that there will be approx 16 channels compared to the current 4, with independent production thresholds equal to the current free to air. Therefore approx 300% increase in demand. The growth requirement of independent production will thus be significant. Any reindustrialization will therefore not only have to bring the sector back to its current level but will have to provide for significant expansion.

18 December 2009

1. Welcome to the incoming SABC board and GCEO

The Television Industry Emergency Coalition congratulates the new SABC board on their ratification and welcomes Doctor Ben Ngubane as Chairman, Ms Felleng Sekha as Deputy Chair, as well as Mr Solly Mokoetle as GCEO. We are indeed pleased that 2010 will start of with fresh leadership and look forward to working with the new board and GCEO to turning the SABC around into a profitable institution that is answerable to the South African public and a jewel in our national crown.

However, while we welcome the new GCEO, we question why the interim board made this sudden and unexpected announcement and did not defer the appointment to the incoming permanent board given that they are weeks away from taking the helm of the SABC. This seems to undermine the incoming board from the outset. We trust the GCEO and the new board will meet as soon as possible to forge a relationship of their own.

We also wish to state that we are very disappointed that the SABC Interim Board has not kept its word to our sector in resolving the crisis around non-payment to producers and artists. There remain millions of rands in unpaid debt to the independent production sector and this amount is growing daily due to repeat broadcasts that are not being paid to actors, writers and production companies. Despite numerous promises by the Interim Board that paying the independent production sector was one of the clear objectives of their tenure, this has not been achieved and we feel duped.

We call upon the new board and GCEO to act swiftly in resolving the matter of outstanding debt to our sector as unfortunately the Interim Board and management have abused the goodwill of the independent production sector and people now demand payment to be made swiftly and without further delays. This must be a priority on their incoming Board’s agenda, together with resolving the ongoing operational crisis at the SABC. To this end we commit to working with the GCEO and board to ensure that this matter is now swiftly settled.

2. Formalised labour meets formalised business

The crisis at the SABC has seen a historic coming together of formalised business and labour in the film and television industry. The CWUSA (Creative Workers Union of South Africa), IPO (Independent Producers Association) and SASFED (South African Screen Federation) have committed to a two-day workshop on the 3rd and 4th of February to seek out and agree to a common vision and roadmap for the industry with a focus on building sustainable livelihoods for creative workers and businesses. Key issues will be intellectual property ownership, fair trade and financial agreements between broadcasters, producers and artists - and a revitalised focus on building local content.

Our industry has paid a heavy price for the management and financial crisis at the SABC. It has led to company closures, retrenchments and job losses. We cannot let that happen again.

We are committed to building a sustainable and responsible production sector that is able to meet the demands and needs of our democracy and economy, and offer sustainable employment in line with the objectives of our government.

Our sector has huge capacity for job creation and we are committed to growing and developing skills.
We commit our support to President Zuma’s call to the nation to continue working to create a united cohesive society out of our fragmented past. To continue promoting unity in diversity and to develop a shared value system based on the spirit of community solidarity and a caring society.
We are committed to become active citizens in the renewal of our country and within our sector to work together, to help where we can to speed up its economic growth and sustainability and to create decent work and sustainable livelihoods for all in our industry.
5 January 2010

Response to Sunday Times lead story of 3 January 2010:
‘Fresh Crisis Rocks SABC’

The TVIEC wishes to state that our position has been misrepresented in the above-mentioned article with regards the appointment of Mr Solly Mokoetle as GCEO of the SABC. We do not feel Mr Mokoetle’s appointment was ‘unfortunate’ as the article alludes. On the contrary, we stated publicly and to the Sunday Times that we had no problem with Mr Mokoetla’s appointment and welcomed him, however we found it unfortunate that this appointment was made on the eve of the SABC Interim Board’s departure and not left to the incoming board as they will be working closely with the new GCEO.

We went on to state that our major concern is that the Interim Board is leaving the SABC without meeting its promise to the independent production sector to pay all outstanding debt to producers, writers and actors by the end of November 2009. In this regard the new board and Mr Mokoetle will be inheriting a substantial debt to our sector.

We have in good faith negotiated with the Interim Board and acting SABC management to receive outstanding payments and feel let down. In addition, the SABC has allowed repeat broadcasts of programmes to go ahead without paying actors and writers for these repeats as is contractual, thus increasing the debt to independent sector. The Interim Board’s view that payment of repeats should be sorted out by management and was not their responsibility is very disappointing and the TVIEC views this as an abdication of fiscal responsibility.

Some eight months have passed since the TVIEC marched to the SABC demanding payment of debt and despite some small payments of amounts under R200 000 and countless promises, our members are still largely unpaid. The TVIEC will insist that the SABC now resolves the matter speedily.

7 January 2010

Open Letter to the New SABC Board

The recent references in the press to the much maligned Gobodo audit report have prompted us to issue this open letter.

The Gobodo report was initiated by a SABC Board chaired by Eddie Funde and his deputy Christine Qunta. Although the terms of reference were never openly articulated, our understanding is that the forensic audit enquiry was set up to investigate claims by individuals within the SABC of irregularities and collusion in the SABC’s commissioning process. The enquiry was undertaken at great expense to the public and exacted a heavy toll on those being investigated inside and outside the SABC.

The individuals and companies interviewed during the investigation were never formally advised of any allegations against them nor given an opportunity to read the report or to defend themselves. However the report was presented to the Funde Board – a report which we understand contained a number of unfounded allegations and innuendo.

Along with the infighting within the SABC over the past eight years or so, we have seen a period where character assassination entered into our political culture. We believe that the Gobodo report has been put to sinister use and continues to be used for dubious ends.

We wonder whether the resurrection of this report is not yet another attempt to divert our attention away from the findings of the recent AG report which deals with the disarray that the SABC found itself in at the end of the Funde/Qunta reign.

It is a pity that the new SABC Board and GCEO are having their attention side-tracked by a five year old report that apparently deals with conspiracy theories. They should rather get stuck into the task of rebuilding the teetering public broadcaster, which still has a huge debt outstanding to the production industry and is in desperate need of new content and morale.

The real issue at hand is that the Board needs to tell the public and the industry what it will be doing about the 2009 forensic report of the AG. We understand that the AG’s findings ultimately raise questions about the legally binding fiduciary responsibilities of the previous two Boards.

We call on the SABC Board to put the chapter of conspiracy theories (and reign by fear and rumour) of the institution’s history behind us and do either of the following: Get legal opinion and act upon the report if there is substance (thereby allowing the respondents a fair and legally transparent process) OR openly declare the enquiry and the subsequent report as flawed and invalid.

Charl: 082-6813680

This update is written on behalf of the TVIEC (Television Industry Emergency Coalition) which consists of: IPO (Independent Producers Organization), SASFED (South African Screen Federation), TPA (The Producers Alliance), DFA (Documentary Filmmakers Association), WGSA (Writers Guild of South Africa) as well as CWU (Creative Workers Union).

TVIEC Steering Committee: Charl Blignaut, Rehad Desai, Levern Engel, Harriet Gavshon, Stan Joseph, Desiree Markgraaf, Lodi Masetsela, Kgomotso Matsunyane, Marc Schwinges and Robbie Thorpe