By the end of the current financial year the ABC will join the likes of The Ten Network, the Seven Network, News Ltd and Fairfax with total revenue of $1 billion or more.
While that’s a significant milestone, the ABC would argue that it has to do more than these other media groups, combining radio and TV, a bit of retailing, a growing internet presence, and meeting the terms of the ABC Charter, while the privately owned groups have to act in a more commercial fashion.
The ABC won’t be over much, but it will be around $1.02 billion, if the gain in revenue from the 2007 year to June 30 is any guide.
According to the ABC’s 2007 annual report it finished the year with revenue of just over $994.7 million, up from $972.4 million in the 2006 financial year.
Expenses rose to $961.2 million from $929 million in 2006, so there’s a comfortable margin of around $22 million in the latest year.
The annual report and accounts show that the total amount from government reached a peak $809.5 million in the year to June, compared to $774.2 million.
“Goods and Services” income was flat however at $150.3 million compared to $150.1 million. The ABC report is deficient in clearly explaining the source for this income: it seems to be revenue from ABC Enterprises, equipment and asset rental and hire and associated commercial activities. ABC Enterprises and other commercial activities should have greater disclosure levels because of their non-ABC mode of business, being designed to make a profit.
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These should be broken out in the accounts each year to see if taxpayers’ money which supports these businesses is being well spent and an adequate return is being made.
Employee costs rose to $352.7 million from $330.7 million but suppliers were the single biggest cost at more than $404 million, up from $3.96 million.
The ABC accounts reveal the organisation provided $5.21 million ($2.99 million) to cover the ‘write-down and impairment of assets’. This too was not clearly related to anything directly in the annual report, although there was a reference in the section relating to the performance of ABC Commercial to “stock write offs within the Books, Audio and Gift businesses.”
This is only a small amount but it seems as though this is very old stock and been hanging around for a while, which indicates poor management.
The annual report shows ABC commercial making an annual profit of $13.475 million “following” those write offs. There was no comparison to the results for the previous year, nor were there any details on revenues, for the various businesses, especially shops; apart from a figure given for the hire of ABC facilities and equipment of just over $6 million (down from more than $9 million for the previous year in which the Commonwealth Games fell).
The disclosure for the remuneration of the board and senior management is adequate and no doubt meets the requirements of the various public service regulations, but in terms of disclosure levels in the listed company sector, it falls woefully short.
It is around five to six years behind: the board remuneration and management remuneration are given in income bands. In the Seven Network and Fairfax for example, it is broken down for non-executive board members and for the executive directors of the company, and the next five senior reports.
Even though the ABC feels it has met adequate disclosure levels, in terms of comparison with what’s the current standard in corporate Australia, it is poor: and there’s nothing stopping it from trying to do more and disclose more, just public service conservatism.
The Managing Director, Mark Scott, would seem to be paid between $585,000 and $599,999. That’s the highest income band for management in the 2007 financial year.
And the ALP, if it wins the federal election, will have two chances to change the ABC board next year with Directors John Gallagher up in February and Ron Brunton in May.
Meanwhile, SBS’s 2007 annual report shows it had total income of $240.5 million, down from $241.7 million in 2006. Expenses were unchanged at $240.38 million. SBS received a net $177.56 million ($180 million gross) from the Federal Government in 2007.
But SBS had some trouble expanding on the minimum requirements for disclosing executive and board remuneration. The highest paid senior executive and board member was paid between $465,000 and $479,999. That was presumably Managing Director, Shaun Brown.
The annual report discloses a 10% fall in the network’s TV advertising and sponsorship income. It was $41.74 million in the year to June, as opposed to $46.52 million. That’s a surprise given the TV ad market has been better in 2007 than it was in 2006 and SBS started its controversial in-program advertising in October last year.
But the commentary has a different message. Under the section “COMMERCIAL AFFAIRS TELEVISION SALES”, SBS said:
The combination of the 2006 FIFA World Cup, introduction of in-program breaks and industry-leading audience growth drove strong growth in television advertising sales in 2006-07, growing gross television revenue by 16.7 per cent to $38.6 million.
The audience for SBS’s program promotions and for advertisements almost doubled with growth of 92 per cent as a result of the new in-program break structure, which began to be rolled out in October.