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SABC: New agreement with MultiChoice to benefit both companies

The five-year agreement is said to be over R500m and will allow MultiChoice the right to broadcast SABC’s 24-hour news channel and entertainment channel, SABC Encore.

FILE: The SABC headquarters in Johannesburg. Picture: Supplied

CAPE TOWN - The South African Broadcasting Corporation (SABC) says it has a new agreement with MultiChoice which will benefit both companies.

This follows a Competition Commission ruling that a channel distribution agreement between the two companies signed in 2013 constituted a merger.

The commission wants the public broadcaster and Africa’s largest pay-TV operator to register the transaction as a merger, failing which they will be in violation of competition laws.

The five-year agreement is said to be over R500 million and will allow MultiChoice the right to broadcast SABC’s 24-hour news channel and entertainment channel, SABC Encore.

The SABC maintains that the 2013 agreement with MultiChoice was not a merger but a standard channel supply agreement.

In a statement in August this year, MultiChoice announced that they have signed a new commercial channel supply agreement allowing the two channels to continue to be broadcast on DStv.

SABC spokesperson Neo Momodu says the new agreement was signed in August and will be mutually beneficial for both companies.

“The agreement will allow the SABC to diversify its revenue activities given the fragmentation in the advertising market. In order for the SABC to reach financial sustainability, it needs to sell its assets and not only rely on TV license collections and advertising.”

However, the SABC says it's concerned about a ruling of the Competition Commission that its agreement with Multichoice constitutes a merger.

Momodu says the SABC has since entered into a new commercial channel supply agreement with MultiChoice, which in the SABC's understanding, does not constitute a merger.

“The SABC has entered into a new agreement with MultiChoice to licence its 24-hour channel for a period of five years and SABC Encore for two years. This was entered into in August this year.”

The new agreement followed extensive discussions between the parties and they believe that this agreement will give their relationship a new start as the country moves towards digital migration.

(Edited by Thapelo Lekabe)