How MultiChoice lied about its deal with the SABC

During a wave of revelations in 2015 about a R553-million deal between MultiChoice and the SABC, MyBroadband interviewed MultiChoice SA chairman Nolo Letele.

The deal with the SABC included a provision that allowed MultiChoice to suspend the agreement if the SABC encrypted its channels on digital terrestrial television platforms.

MultiChoice opposed the government’s original intention to require support for signal encryption technology in South Africa’s digital TV specification.

MultiChoice said encryption was unnecessary for set-top box control, and it was a way to get the poor to subsidise Etv’s entry into the pay-TV space.

Following a report titled Diabolical and secret SABC deal exposed, MultiChoice said the SABC dictated its own policy on encryption.

The SABC was also free to speak in favour of encryption, said MultiChoice.

Letele told MyBroadband that the encryption provisions were not condition precedent, and they could not refuse to sign the agreement if the SABC went the other route.

The minutes of an SABC board meeting published by the DA show that Letele’s statement in 2015 was false, however.

Deal breaker

The minutes of the board meeting in 2013 reveal that Letele had the opposite stance on the matter.

Imtiaz Patel, who was group CEO of MultiChoice at the time, said they wanted the SABC to agree to keep its channels unencrypted.

MultiChoice believed broadcasters would be allowed to choose whether to adopt the technology, said Patel.

Patel was referring to a budget vote speech by Dina Pule, then the Minister of Communications.

Pule said the ministry had decided to make the set-top box control system non-mandatory.

Letele then proposed that the provisions in the agreement regarding encryption be made condition precedent.

Mr N Letele: Which is why I’m suggesting we make it a condition precedent.

Mr I Patel: But I think you may be missing each other because by condition precedent, you are suggesting that if conditional access is in there, the agreement falls flat.

Mr N Letele: Correct.

Patel then emphasises that the issue of conditional access is a deal-breaker, and they need the SABC’s commitment on non-encryption.

“We are not coming here saying this is, you know, this is the be-all and end-all, you know. But I must say though… that this is the very important point for us. It’s a deal-breaker point, I’ll be honest. And I have re-iterated it. I have said this to you before,” said Patel.

News channels

A more recent statement from MultiChoice which has also been called into question is its claim it is standard practice to pay for news channels.

On the topic of paying R141 million per year for previously-Gupta-owned ANN7, MultiChoice said it was standard practice.

It is worth noting that MultiChoice’s negotiations with ANN7 and the SABC were happening around the same time.

MultiChoice concluded its initial deal with ANN7 at R20 million per year in December 2012. ANN7 went on air in August 2013, and an amended agreement increasing its rate to R50 million per year went into effect in October 2013.

The minutes of the meeting between the SABC and MultiChoice discussing its news channel and conditional access terms is dated June 2013.

“We would not normally pay for a news channel. Ok. We don’t,” said Patel in the meeting.

“There’s a unique relationship with Etv… But, besides that we don’t pay for any other news channel, anyway, ok. So we wouldn’t normally pay you for a news channel.”

The full minutes of the meeting were published by the City Press.

MultiChoice responds

MultiChoice did not directly respond to questions about Letele’s statements from 2015 and that it is standard practice to pay for news channels.

“This was not a clandestine meeting. No kickbacks were paid. This was part of a negotiation meeting with the SABC. The final decision on this proposal lay with the SABC board,” said MultiChoice.

Now read: SABC board butts heads over R500 million Multichoice deal

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How MultiChoice lied about its deal with the SABC