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MultiChoice faces backlash over ANN7 payments

Company says contract that would see it pay news channel R150 million a year was never finalised.

MultiChoice has denied it signed a revision to an agreement with formerly Gupta-owned 24-hour news channel ANN7, in terms of which it would pay the channel R150 million/year.

But the news that it has been paying the channel at all provoked a backlash from consumers on social media on Thursday.

Responding to e-mailed questions from TechCentral, MultiChoice said the draft contract (PDF) — contained in the so-called “Gupta leaks” e-mails — was never finalised.

The draft contract came to light on Thursday after a portion of the leaked e-mails were published online.

The e-mail that contained the draft amendment to the channel supply agreement between MultiChoice and ANN7, sent from former Gupta lieutenant Nazeem Howa to one of the Gupta brothers, Rajesh “Tony” Gupta, showed plans were afoot to change the original deal, which was signed in December 2012. It’s not known why the amended deal was not signed.

The draft “third channel amendment agreement” stated: “With effect from the effective date (April 1 2014), the fees payable by MCA (MultiChoice Africa) … shall be increased from R50 million/annum to R150 million for the remainder of the term. For the avoidance of any doubt, the increased fees for the remainder of the term shall be calculated pro rata from the effective date to the end of term”. The unsigned amendment suggests that MultiChoice had been paying R50 million/year up to that point for the supply of the channel, which until recently was owned by the controversial Gupta family. 

The unsigned amendment agreement also proposed changing the duration of the contract to ten years – so, expiring in 2024.

‘Legally binding contract’

“The draft contract published (in the Gupta e-mails) was not signed and MultiChoice is not part of the e-mail exchange referred to in your query,” the pay-TV broadcaster said in its e-mail to TechCentral on Thursday.

“We confirm that we have a legally binding contract, the details of which are subject to confidentiality clauses,” it added. It declined to say how much it has paid ANN7 to date.

According to a well-placed source with knowledge of the situation, the deal between MultiChoice and ANN7 will expire in 2018. It’s not clear, however, whether MultiChoice intends extending the contract. That, presumably, will be the subject of negotiations between the companies. 

The Naspers-owned broadcaster has faced a consumer backlash for carrying the channel on its platform at all. This criticism intensified on Thursday on the news that it has been paying ANN7 for the supply of the channel.

The deal with ANN7 risks causing reputational and commercial damage to MultiChoice, with some users on social media on Thursday saying that they are considering cancelling their DStv subscriptions in the wake of the revelations that it has been paying ANN7 for the channel.

In August, controversial Gupta-aligned businessman Mzwanele Manyi said he was buying ANN7 and The New Age newspaper for R450 million in a deal financed by the Guptas.

A Manyi-owned company called Lodidox bought Infinity Media, which owns ANN7, for R300 million, and two-thirds of TNA Media, which owns The New Age, for R150 million, Gupta-owned Oakbay Investments said in a statement at the time.

The sale came as Oakbay struggled to find a banker willing to do business with it. Bank of Baroda this year became the latest institution unwilling to provide banking services to the Gupta family’s businesses.

This article was first published on TechCentral. To access the original, please click here.

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Corruption is everywhere; not just in government

Its even worse in Corporate; they are just smarter enough to conceal it

No way is it worse in corporate. There are reporting standards, audits and more people with integrity. Corporate entities also have to work for their money, Govt gets it for free!

And the customers and public can kill you quick quick, ask Bell Pottinger…

I wonder how much Multichoice is paying for other channels. Probably less. For me the only sensible deal with ANN7 would be if they paid 150 million to Multichoice.

Sickens me that park of my monthly subscription for DSTV goes to the Guptas ………!!

Sickens me that you pay a monthly subscription to DSTV.

If ever there was a case for white monopoly capital, Naspers is it.

Multichoice needs to understand that I will cancel my contract with them if they are paying ANN7 for that propaganda rubbish. I am sure many other will support my view.

I will be happy to see the day when we can get true IPTV in SA, and I can finally stop paying DStv for their anti-competitive service. I only want to watch about 10 channels but am forced to fund over 100.

A very unhappy customer.

How is it possible that MC would agree to a deal in terms of which they pay ANN7?
ANN7 do not attract any advertising revenue, and surely do not have much pull in terms of viewership.
Is that not something more behind this deal that the public do not know about?

what do you expect from a company that ” secretively ” signed deals with the SABC, under Motsoeneng for SABCencore programs.

Unless MC want to end up like Bell Pott, review your relationship with ANN7

Disgusting that anyone pays anything to thieves.

I watched it out of curiosity the other day. Could not believe it was the same news as 403, so biased and twisted, a real white hater station.

I will seriously rethink my DSTV subscription knowing this now.

This article does not sound correct…Why is MC paying ANN7? should this not be the other way round?
On the face of it sounds non-commercial; unless there is a non-disclosed political pay-off for MC facilitated by the Guptas?

cancelled my MC 5 years ago, best “multi” choice I made, why rethink?, they’ve been selling us replays since ever…and now paying ANN7 to sell you, gupta propaganda…a few month ago on this site, how many also then rethink their subscriptions when MC increase subscription…?all words with no action.

My subscription cancelled. thank you for the reminder of what we are supporting

As I am getting close to retirement, I was considering getting DSTV up to this stage. Now, I have certainly loss interest. Overpriced service in any case. Thanks for opening my eyes.

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