Super Sport yesterday broke the hearts of many football lovers anticipating to watch the up-coming African Nations Cup on DSTV that the biggest football channel in Africa does not have the right to show the competition to football fans waiting to watch their favourite football fans.
What happened that led to this?
Why so?
Walk with me as we explore the whole drama.
In 2021, CAF, the football body that owns the AFCON franchise, elected a man called Dr. Patrice Motsepe. That decision had a significant impact on what happened to Super Sport and their inability to show AFCOzN to millions of football fans all over Africa.
Dr. Patrice Motsepe is a suave, sophisticated businessman from South Africa. He was actually the first Forbes black-dollar billionaire in Africa, long before Aliko Dangote of this world came to the limelight.
He made a promise during the campaign to run CAF as a business,borrowing from his pedigree as a successful billionaire businessman, and that is exactly what he has been doing.
One of the initiatives that he brought to CAF was the public auction or bid of TV licences for CAF events that included AFCON, which has never happened before in the history of CAF. He borrowed the idea from the owners of the wildly successful English Premiership franchise, where the highest bidder goes home with a licence to the broadest English Premiership matches in his country.
HI TV once won this bid over DSTV 12 years ago.
A date for public bidding was set, and media companies in Africa like DSTV, Bien, and Canal were invited to bid for the license. In the bidding war that ensued, one unknown New World TV based in Togo came as an underdog to the bidding war and outbidded DSTV and Canal World by offering to pay CAF.
A staggering amount of $80 million for 3 years, and the money will be paid upfront.
Interesting
CAF has never had it this good.
$80 million for just TV sponsorship
Something that DSTV used to pay a token in the past for.
An elated and excited CAF president, waxing lyrically, said "This is the biggest investment by a pan-African broadcaster in CAF’s history."
And here is another interesting mix.
The promoters of New World TV were smart to partner with a bank owned by the CAF president.
The name of the bank is Sanlam, and they are the bankers for this new biz in town. Just last year, New World TV won the right to broadcast World Cup matches to French-speaking countries.
Guess the bank that arranged the loan that New Worked TV used to pay FIFA.
Sanlam Bank, so this relationship with the CAF president made it easier for the man to sanction New World TV as the winner of the bidding war over 8060267081. The deal with CAF gives New World TV rights for both free-to-air and paid TV in most of Africa. It covers 13 competitions, including the 2023 and 2025 AFCONs, and is reportedly worth around $80 million.
On the surface, this is a bold new step—an African broadcaster broadcasting the continent’s premier competitions. Typically, major rights such as these go to big, internationally owned corporations, such as Canal+, BeIn, or South African-based Supersport.
Here’s where it gets interesting...
New World TV is a new kid on the block. Just over two years ago, the company was unknown outside the tiny nation of Togo 🇹🇬.
I did not know about them until yesterday.
Then, in July 2021, it shocked the continent by winning the rights to air the FIFA World Cup across Francophone Africa. It has since secured rights for competitions such as the Bundesliga, FA Cup, Euro 2024, and the 2023 Women’s World Cup.
In total, all these rights are worth over $100 million.
Who is funding them?
But beyond this, DSTV was not incentivized to challenge the $80 million offered by the new guys for one reason. Multi Choice, the parent company of DSTV, based in South Africa, has been a loss-making company for two years and counting.
Last year, they declared a loss of $71 million for two reasons.
1) Nigeria
2) South Africa
Again
Last year was a good year for DSTV Nigeria.
Big Brother Naija asset was their biggest income-generating asset and cash cow, as it made a lot of money for them. The same year, they repatriated $91 million from Nigeria to South Africa, which was the revenue they made from doing business in Nigeria.
Also, Nigeria is their biggest overseas market in Africa, excluding South Africa.
South Africa has a bigger market than Nigeria in terms of revenue for the company. But for all the money they made in Nigeria, there was a problem, and the problem is dollars.
The scarcity of dollars chased away GSK and Sanofi from Nigeria.
DSTV is a foreign business that calculates its revenue in dollars, but for so long, the company found it difficult to move their money domiciled in naira away from Nigeria because CBN was not ready to give them dollars. It became an issue that had to devise ingenious means to send money home.
One of them was a future contract, but they were losing money because of the instability of the exchange rate of naira to dollar. The company's failure and inability to access dollars to move their money home were responsible for their loss last year. Their money was trapped here in Nigeria for years, and when they finally had access to dollars to repatriate the price won’t be the same again.
Let’s say, for instance, they generated revenue when the dollar was 500, and when they finally had access to the dollar, the price was now 750. That is automatically a 250-naira loss for every dollar that they are taking home to South Africa, so this factor alone contributed significantly to the $71 million loss.
Secondly, South Africa experienced a severe power shortage last year. South Africa, a developed economy, is competing with Nigeria, which is more useless because of the incompetence of the ruling party, the ANC. Before now, South Africa had an uninterrupted power supply, but not any more, so the fact that South Africans don’t have light to watch DSTV affected DSTV revenue as many people in that country stopped paying for DSTV.
So these two reasons affected Multi-Choice, which led to the declaration of a $71 million loss. For this reason alone, it does not make business sense for a company that just declared a $71 million loss in business to give CAF the kind of money that the guys from Togo were offering.
So it was better for DSTV to walk away than commit to what they couldn’t pay for because the TV licence was too expensive for them.
Furthermore, Africa is a poor continent, so the AFCON licence is not worth $80 million, if we are to be honest.
$80 million is 80 billion naira if we must say.
It is overvalued, and DSTV rightly stayed away from paying.
In a nutshell, an expensive TV licence is why millions of football fans, including myself, won’t watch AFCON on DSTV.
Because New World TV still has little presence beyond a few French-speaking African countries, they are not in Nigeria.
According to the Africa Report, New World TV claimed just 100,000 subscribers in mid-2022, although ‘it hoped to acquire between seven and ten million subscribers in sub-Saharan Africa within the next three years.'
It begs two questions:
Firstly, with AFCON 2023 just a month away, how easy will it be for audiences across Africa to follow the games? New World TV channels are not available across most of the continent, and they will likely have to move quickly to secure deals with in-country broadcasters. Previous NWTV broadcasts have had significant broadcasting issues.
Secondly, how can such a small company compete financially with DSTV, BeIn, and Canal+?
Even with extraordinary growth over the last two years, it's not clear where the company has found the funds to finance this latest conquest, as I stated before.
Again? Who is bankrolling them?
And with CAF's flagship tournament just around the corner and no clear distribution channels for most of the countries for which it has just won the rights, it's painful that so many of us won’t watch our favourite stars on TV because the CAF president wants and is driving CAF to generate more revenue and more money at the risk of exclusion of football fans all over Africa who genuinely love this game.
The other side of captalism that we don't discuss.
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