THE BOTTOM LINE
MultiChoice: Will foreigners still like what they see?
Offshore shareholders in Naspers watch competition commission’s investigation into SABC deal with interest
The Constitutional Court ruling on the Competition Commission’s powers of investigation comes at a difficult time for MultiChoice. It was announced recently it would be separated from Naspers and get its own JSE listing.
Given the substantial portion of international investors among Naspers’s shareholders, the unbundling of MultiChoice will mean that foreigners are set to become significant investors in Africa’s largest pay television operator.
The commission’s investigation is focused on MultiChoice's R500m five-year agreement with the SABC, which media group Caxton and civil society organisation Save Our SABC claim was a merger. The R500m agreement was also the subject of allegations by the DA that the payment was made in exchange for political influence over government policy on digital migration.
MultiChoice, which also came under fire for its broadcasting deal with the Gupta-owned ANN7, has denied these allegations. The ANN7 deal has since lapsed.
International investors may be sufficiently encouraged by the recent bidding war for UK-based telecommunications group Sky to overlook any lapse in judgment the commission might discover. Far from assuming the future of traditional media companies had been cobbled by tech and video streaming companies, US cable and internet operator Comcast was willing to pay £30bn to get access to Sky’s 23 million customers.
MultiChoice is a significantly different creature. It does not have the same customer base and it produces only a fraction of its own content. But the Sky deal suggests some of MultiChoice’s international investors may see attractions in traditional media. That’s if they’re not put off by anything the commission discovers during its 30-day investigation.