SBS Mulls Programming Cuts After Senate Rejects Ad Changes

June 24, 2015 World Screen Top Stories

MELBOURNE: Proposed legislation that would allow SBS to broadcast more prime-time ads has been rejected by the Australian Senate, leaving the broadcaster with a "A$28.5 million ($22 million) hole in its budget over the next four years."

An amendment to the Special Broadcasting Service Act 1991 would have allowed SBS to air ten minutes of advertising an hour, up from the current limit of five minutes. However, with the bill now shot down, SBS will have to examine overall funding and provide an impact report to the federal government.

SBS Managing Director Michael Ebeid argued that revenue raised through advertising goes directly to protecting SBS investment in "great Australian programs and services that deliver on our Charter." He also pointed out that a survey of SBS audiences showed that 73 percent would prefer to have a little bit more advertising than see programs and services cut.

"The failed passage of this legislation is a setback and leaves SBS with a A$28.5 million hole in its budget over the next four years," Ebeid said. "Given this legislation did not pass and SBS has largely exhausted back-office efficiencies, this funding cut is unable to be absorbed without impacting programs and services.

"SBS will now need to consider its contingency plans internally, provide an impact report to the federal government and review our overall funding. Once this process is complete, SBS will be in a position to outline further details about the impact the failed legislation will have on the organization."

By contrast, Free TV Chairman Harold Mitchell championed the move. He said: “The failure of the SBS advertising bill in the Senate is great news for viewers and for the continued production of quality Australian content. It is a win for good public policy. It never made sense to turn SBS into a fourth commercial television license, especially at a time when the television advertising pie is flat and we are facing increasing competition from global players who are unregulated and pay little or no tax in Australia.

“Viewers can be assured that there won’t be more ads on SBS in prime time and that free-TV broadcasters will be able to continue to fund the great Australian programs they love. We understand that governments have to make difficult budget decisions. Our concern has always been that any savings should not be at the expense of privately owned companies subject to a range of rules and taxes which SBS does not face.

“The SBS has an important role in Australian television as do the commercial free-to-air broadcasters. We are grateful that the Parliament has decided to reject these changes that the public did not ask for and which would have damaged free-TV broadcasters at a critical time.”