Page Archive: FAQ SBS Funding

SaveOurSBS

How Is SBS Funded?

SBS is a public broadcaster.

Most of the funding for SBS is from the Federal Government which has remained fairly steady in recent years. Funding from government for SBS: $186 million (2006-07); $188.2 million (2007-08); and, expected to be $190.9 million (2008-09). Although the numbers ascend the dollar value probably remains about the same or decreases slightly.

Current & Past Years Funding

About 80% ⁽¹⁾ of the funding for SBS comes from the Commonwealth Government. SBS is on the public record as stating that they believe that they will raise an extra $10M ⁽²⁾ in their first year (2007) of interrupting programs for ads. Even before SBS decided to interrupt TV programs for ads, their income from advertising ⁽²⁾ had increased compared to previous years As this occurred the income from the Commonwealth Government remained static and was reported by SBS to be down by $3M ⁽³⁾ (in real terms) in the May 2006 Budget.

Whenever SBS income from advertising increased, funding from the government remained static (a decrease in real terms). It’s a vicious circle. The more SBS gets from ads, the less it gets from government (in real terms).

If the above scenario continues the day could conceivably come when the Commonwealth Government will only fund SBS to a very small extent or stop funding it altogether. The more successful SBS is with its advertising, the more we, as the viewer will be ‘sold out’ to the advertisers in preference to us, the viewer.

SBS appeals to the different audiences that make up Australian society. If SBS receives little or no funding from the government and is forced to rely more heavily on advertising for income, the quality of the programs will suffer. This very lean broadcaster will be forced to reduce its operating budget further due to financial constraints. If the opposite happens and SBS is very, very successful at selling advertising by interrupting programs for commercials, there is a very real possibility that the Federal Government will eventually want to sell off SBS just as many other publicly owned institutions have been privatised and sold off. There is a history of this happening to other public broadcasters worldwide.

Of course if SBS is eventually sold or privatised, then its Shareholders will expect it to run at a profit. However given the current Charter of SBS the newly-privatised-broadcaster would argue that the Charter is too restrictive and ask/demand that it be changed. Does this sound like a familiar story? Ask the regulator to change the rules to run a company more profitably for the organisation that was formally owned by tax-payers but now owned by Shareholders?

We would prefer that SBS did not have to rely on commercials and therefore not be at risks of eventually receiving little of no funding from government.

Even if SBS is not privatised and manages to make more programs with the money from commercial breaks interrupting programs that simply means more programs will be interrupted for more commercials. It’s a never ending circle.

We need legislative change to save our SBS.

What will happen if SBS-TV stops advertising in programs (and places ads between programs only) but gets no increase in government funding? Will SBS survive?

Yes. SBS is said to operate “on a shoe string budget and the smell of an oily rag”. It would be far more preferable if it were fully funded properly by the Commonwealth government and on an on-going basis.

The Financial Statement from the SBS Annual Report for the financial year 2005 to 2006 ⁽⁴⁾ reveals that revenue from the sale of advertising and sponsorship accounted for $46,523,000 (not all of this is from the sale of air time for ads on SBS-TV although most of it is as some was from SBS program & merchandise sales and some from SBS-internet-on-line ads and some from SBS-radio ads) while the total income from all revenue, including the government portion, was $241,782,000. Income from government funding alone was $176,472,000. Government funding available for programming did not increase in the May 2006 Budget (funds from government for the financial year 2006 to 2007). As SBS hoped that by interrupting programs they would raise an extra $10M ⁽²⁾ in 2007, if that were to occur, and all other income streams were identical to the 2005-2006 financial year that would account for an increase of less than about 4.13% of the total income for SBS in 2007. It is highly likely to be significantly less because other income streams, besides TV ads, will most likely increase. Some people consider that even 4.13% of the total is virtually negligible.

“Why would you bother?”

Is it worth the effort? Why antagonise the entire SBS-TV audience for such a tiny increase in total income?

SBS argue that they will be able to make more Australian drama programs with an increase, however, unlike other broadcasters; SBS was primarily established to import programs from other countries. The original logo of SBS-TV, then called Multi-Cultural Television (MTV) channel 0-28, was the singing jingle “Bringing The World Back Home”. As such, unlike other broadcasters, SBS did not require massive funds to show foreign language programs on Australian television.

SBS Charter

Although the Charter of SBS states that SBS is to: “reflect the changing nature of Australian society, by presenting many points of view and using innovative forms of expression” there is absolutely nothing in the SBS Charter that specifically states that SBS must make Australian television drama, where as, there are requirements on commercial television to do that. The ABC makes Australian dramas and other Australian television programs. The Charter of SBS says that SBS is to take: “into account the contribution of the Australian Broadcasting Corporation” meaning let the ABC make such programs as the ABC is supposed to be a comprehensive broadcaster, unlike SBS which is supposed to be a special broadcaster. SBS should compliment and supplement other broadcasters, not copy them, ABC or commercial. The reason is because the SBS Charter states that the: “principal function of the SBS is to provide multilingual and multicultural radio and television services” and that these should “as far as practicable . . . [be] in their preferred languages” The original intent was that most programs would therefore be in languages other than English (LOTE). For many years SBS reflected that intent. It now does not. Most programs in prime time viewing are now in English as are the commercials.

If SBS were to follow the Charter more closely it would not be driven to increase its revenue by a mere fraction, in the hope to make more Australian drama programs, which, ultimately, will even mean more programs will be interrupted with more commercials.

Over time, many large organisations become bureaucratic and perhaps less efficient than they once were, particularly at the higher levels of that organisation. Is SBS now like that? Are SBS viewers now suffering from the intrusion and annoyance of commercial breaks in program because of an out of touch Board or senior management at SBS? Are egos high at that level?

SBS have stated that extra money is required to full fill their Charter requirements, however, when was the last time you heard of the SBS Board arguing their case for more government funding (instead of running ads)? By looking to advertising to increase revenue (by a mere fraction of the total), SBS do not need to convince any member of the government of their motive or reasoning. That is hardly in the spirit of what a public broadcaster should be. Where is the accountability?

If SBS were to return to its former style of program presentation, where it did not interrupt regular programs for commercial breaks, it would survive. You the viewer would not suffer.

However should programs continue to be interrupted for commercial breaks this valued public broadcaster will eventually be lost to ‘commercialisation’ and virtually be no different from any other commercial station.

Please do your bit to save our SBS (SOSBS).

Sign the petition.

May 2007 Budget

If you were hoping to find a funding rescue package for SBS in the May 2007 Federal Budget you may be sadly disappointed. We are not aware of anything to report in this regard. SBS still continues to pursue the ‘commercialisation’ path in lieu of sufficient government funding.

For more information about the above read: “We Don’t Believe You Shaun” on the Save Our SBS web site (www.SaveOurSBS.org).

References:

1. SBS CORPORATION “FAQ” <sbs.com.au> web pg id=379

http://www20.sbs.com.au/sbscorporate/index.php?id=379

2. SBS publication: “04 Commercial Affairs” pg 41 — 50

http://www20.sbs.com.au/sbscorporate/media/documents/652304_commercial_affairs.pdf

3. SBS Media Release: Tuesday 9 May 2006: “SBS DISAPPOINTED WITH BUDGET”

http://www20.sbs.com.au/sbscorporate/media/documents/36362006__budget_response_9_may.doc

4. SBS publication: “08 Financial Statements” pg 89 — 127 (Australian National Audit Office: 17 August 2006)

http://www20.sbs.com.au/sbscorporate/media/documents/91508_financial_statements.pdf

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