SABC COO Hlaudi Motsoeneng File picture: Bhekikhaya Mabaso

Johannesburg - A controversial five-year, R55-million deal between MultiChoice and the SABC has handed significant control over the public broadcaster’s news operations to the pay-TV operator – a private company with no public broadcasting mandate.

This is among the suggestions emanating from a complaint lodged with the Competition Tribunal.

The Caxton media group, the Save Our SABC: Support Public Broadcasting Coalition, and the Media Monitoring Project allege that the agreement in effect constitutes a merger.

The “Commercial and Master Channel Distribution Agreement” between MultiChoice and the SABC was signed in July 2013, but has been kept from public view under a confidentiality provision, although elements of it have become public knowledge and sparked deep misgiving, including in the SABC board and the governing ANC.

Even the SABC board was kept in the dark. Weeks after it had been signed by acting chief operating officer Hlaudi Motsoeneng, the then-chairwoman, Zandile Ellen Tshabalala, wrote to the then-minister Yunus Carrim to say the SABC was in support of a set-top box control system, although the agreement specifically bound the broadcaster to the opposite.

It is now part of the record before the tribunal and – thanks to a recent Supreme Court of Appeal ruling in the City of Cape Town versus Sanral case – this makes it a public document, despite MultiChoice’s attempts to force the Media Monitoring Project to remove it from its website.

One industry analyst said this had revealed the “diabolical” nature of the agreement.

On the surface the deal served to enable the launch – two months after it was signed – of the SABC’s 24-hour news channel on the DStv platform and the launch, now believed to be imminent, of an entertainment channel on the same platform.

The SABC will be allowed to carry its news channel on its digital platform once this has been launched (a process that is at least four years behind schedule), but with significant limitations.

It will have no right to carry, or license other broadcasters to carry, the entertainment channel, which is to be comprised in part of its substantial archive material, estimated to be worth billions in potential earnings.

Clause 4.2.1 of the agreement says the SABC grants to MultiChoice the “exclusive right” to “receive, distribute and market” the two channels. Subclauses say the SABC may not itself distribute, or authorise anyone else to distribute, the entertainment channel, or even a part or individual programme from that channel, while it may carry the news channel on its digital terrestrial platform when it is launched.

However, it may not allow anyone else to carry the news channel in the country, “or any adaptation, part, version, or individual programme thereof”, or even distribute “any other SABC branded news channel”.

This means all the content produced by the SABC’s stretched news operation for the 24-hour channel – with the exception, subject to consultation with MultiChoice, of events of national significance such as state funerals – will be exclusively controlled by this channel.

Given that both channels will be subject to regular viewership performance evaluations – carried out on MultiChoice’s behalf – and must achieve certain viewership levels or lose part or ultimately all of the income from the deal, a combined R100m a year, this means the SABC news will have to be crafted with the DStv audience in mind, according to commentators.

The SABC also committed in the agreement to certain scheduling obligations for the 24-hour news channel, including that it will supply current affairs, business news, weather updates and international news, among other items, which would require it to maintain a presence in specified areas and acquire international content.

Like other content for the news channel, none of this may be used in another SABC channel or sold to other broadcasters.

Along with these two pay-TV channels, the SABC agreed to include, for no extra charge, all its other free-to-air channels in the package and to ensure they would not be encrypted and always be receivable by M-Net decoders.

The applicants in the case argue that this has deprived the SABC of the ability to compete with MultiChoice for audience share, because without encryption it will not be able to buy high-quality content from overseas vendors.

It also gives MultiChoice the SABC audience – already accounting for 40 percent of its “eyes on screen” – on a platter. Although the SABC will retain the advertising revenue from its channels, having its content will increase MultiChoice’s attractiveness.

Securing the SABC’s archive content has delivered to MultiChoice a pre-emptive coup that will exclude competitors, including the SABC, from trying to set up new channels or license individual programmes using the archive material in the expanded digital environment.

The cost of all this to MultiChoice – R100m a year, rising by 5 percent a year – is considered a fraction of the value.

An authoritative source confirmed, for example, that the R40m for the news channel was roughly a 10th of what MultiChoice paid for eNCA.

MultiChoice disputed the accuracy of this figure.

 

Sekoetlane Phamodi, co-ordinater for the SOS Coalition, said it was clear the news channel was being “re-engineered to move away from that full public value kind of service that the SABC should be meeting”.

He cited as an example Motsoeneng’s recent announcement that African language bulletins would be discontinued.

“These are public resources that have been taken into the commercial sector – and there is no access for the public, it’s a distortion of what the Broadcasting Act envisages.”

MultiChoice, however, has denied exerting any influence on SABC news.

“We have several news channels on DStv (CNN, Sky News, eNews etc) and performance requirements are standard for all. The inclusion of such requirements in no way constitutes influence over those news channels’ operations,” it said.

William Bird of the Media Monitoring Project said while this might be true, it was unlikely agreements with the other news providers contained the same exclusive provisions as the SABC agreement.

 

Spokesman Kaizer Kganyago said the SABC would “never” allow another broadcaster to influence its news operations.

Sekoetlane Phamodi, co-ordinater for the SOS Coalition, said it was clear the news channel was being “re-engineered to move away from that full public value kind of service that the SABC should be meeting”.

He cited as an example Motsoeneng’s recent announcement that African language bulletins would be discontinued.

“These are public resources that have been taken into the commercial sector – and there is no access for the public, it’s a distortion|of what the Broadcasting Act envisages.”

MultiChoice, however, has denied exerting any influence on SABC news.

“We have several news channels on DStv (CNN, Sky News, eNews etc) and performance requirements are standard for all. The inclusion of such requirements in no way constitutes influence over those news channels’ operations,” it said.

William Bird of the Media Monitoring Project said while this might be true, it was unlikely agreements with the other news providers contained the same exclusive provisions as the SABC agreement.

Spokesman Kaizer Kganyago said the SABC would “never” allow another broadcaster to influence its news operations.

Political Bureau