The contract MultiChoice signed with ANN7 for R50 million per year

Contract negotiations between MultiChoice and Applewood Trading 206 over Gupta-owned news channel ANN7 have been revealed in the Gupta Leaks.

This includes a signed amendment to an agreement which saw MultiChoice pay R50 million per year for ANN7 – up from R20 million per year.

The Platform for the Protection of Whistleblowers in Africa recently released the mails containing the amendment.

“It is a sample from hundreds of thousands of emails, documents, and invoices related to the Gupta Leaks,” it said.

The details of the ANN7 contract are shown below.


Price

ANN7 went on air in 2013, and the amendment which increased the annual rate from R20 million to R50 million was effective from 1 October 2013 – with pro rata charges.

It was the second amendment to the original channel agreement, which was set to be signed on 14 December 2012.

MultiChoice therefore paid R3.33 million for the first two months, and R41.67 million for the remainder of the year.

This is provided another amendment didn’t adjust the fee.

The Gupta Leaks did contain an unsigned third amendment to the agreement, but MultiChoice said it did not sign the third amendment.

The minimum MultiChoice may have paid for ANN7 is therefore R45 million for the first year, and R50 million per year thereafter.

This would total R245 million to air the channel until 31 July 2018.

MultiChoice ANN7 contract 2013 price amendment


Performance

In a final draft of the original contract, MultiChoice requires that ANN7 achieve certain performance benchmarks.

It required that in the first year, 18% of its subscriber base must have watched three minutes of ANN7 per week on average.

At the time, this was measured by taking a representative sample of its subscribers and equipping them with special DStv decoders (DStv-i) – used to measure the ratings of channels.

The weekly average was calculated over four or five weeks in the year.

After the first year, ANN7’s performance target increased to 20%, and then to 22% in the third year (2015/16).

ANN7 tried to have these performance targets removed in the third amendment to the contract, which MultiChoice said it did not sign.

MultiChoice declined to answer questions about whether ANN7 achieved the performance targets.

MultiChoice ANN7 unsigned 2012 draft performance clause


Confidentiality

The final draft of the original agreement states MultiChoice’s is bound by a confidentiality clause.

MultiChoice ANN7 contract 2012 confidentiality


Signatures

The amended agreement in the Gupta Leaks contains the signature of Imtiaz Patel, CEO of MultiChoice South Africa at the time.

MultiChoice ANN7 contract 2013 price amendment signatures


Standard contract

MultiChoice told MyBroadband it has a contract to broadcast ANN7, but is unable to disclose the details of the deal.

“DStv is a platform that relays many local and international news channels, representing a wide spectrum of views,” said MultiChoice.

This includes SABC News, eNCA, ANN7, CNN, and Sky News.

“It is standard practice in pay television to make payment to carry channels of all genres, including news.”


Now read: How ICASA proposes the MultiChoice DStv “monopoly” should be broken

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The contract MultiChoice signed with ANN7 for R50 million per year