SABC And Multichoice Ink A Mutually Beneficial Agreement
The South African Broadcasting Corporation (SABC) says it has signed a new agreement with MultiChoice which will significantly benefit both companies.
This comes after the Competition Commission ruled that a channel distribution agreement between the two companies signed in 2013 authorised a merger.
The commission ordered Africa’s largest pay-TV operator and the SABC to register the transaction as a merger and made it clear that failing to do this will be in violation of competition laws.
The five-year agreement is estimated to be over R500 million ($6 932 410.00 USD) and will award MultiChoice the right to broadcast SABC’s 24-hour news channel and the entertainment channel, SABC Encore.
The SABC still maintains that the 2013 agreement with MultiChoice a standard channel supply agreement, not a merger.
In August this year, MultiChoice released a statement announcing that they had signed a new commercial channel supply agreement allowing the two channels to continue to be aired on DStv.
Neo Momodu, SABC’s spokesperson said that the new agreement was signed in August and would be mutually beneficial to both companies.
He explained that the aim of the agreement would be to allow the SABC to diversify its revenue activities given the cracks in the advertising market. The spokesperson suggested that in order for the SABC to reach financial sustainability, it would have to sell its assets and not rely solely on TV license collections and advertising.
The SABC, however, said that it's concerned about the ruling of the Competition Commission that its agreement with Multichoice authorises a merger.
Momodu said that the SABC had since entered into a new commercial channel supply agreement with MultiChoice, which according to its understanding, did not constitute a merger.
He declared that the SABC had now entered into a new agreement with MultiChoice to licence its 24-hour channel for five years and SABC Encore for two years.
The new agreement followed thorough discussions between the parties, and they believe that this agreement will give their relationship a fresh new start as the country continues to move towards digital migration.
Credit: This article originated from www.ewn.co.za