eMedia Investments, parent company of e.tv and eNCA, has taken MultiChoice CEO, Calvo Mawela, to task over comments he made about the channels during a press conference held on Wednesday.
MultiChoice, still reeling from a major reputational scandal over it’s deal with ANN7 TV that erupted late last year, brought out the big guns – including Naspers CEO, Bob van Dijk – to reveal the results of its investigation into strident claims of corruption and a lack of ethics over the deal.
In attempting to justify payments to the Gupta-owned channel, Mawela told reporters “annual payments to e.tv had escalated substantially, heading towards R500 million per annum”.
In doing so, said Vasili Vass, the company’s group head of corporate affairs, Mawela had revealed confidential contractual information. “We have refrained from making any comment to date, but today’s statement by MultiChoice requires clarification,” Vass said in a media release issued late on Wednesday night.
He pointed out that eMedia Investments was contracted to provide five channels to DStv on a non-exclusive basis, “the same basis as ANN7 provides its news channel to MultiChoice”. The provision of 24-hour news channel eNCA as well as Afrikaans news bulletins for kykNET were provided on an exclusive basis.
“These services are incomparably more extensive than the ANN7 offering and attract substantially larger audiences on the DStv platform,” said Vass. “eNCA delivers an independent, commercially viable news service, holding more than 50% of the news-watching audience. The total amount currently received from MultiChoice for all of the services is significantly below the amount suggested by both the MultiChoice statement and subsequent comments made in the Q&A session. The overstatement of the amount payable, to justify amounts paid in respect of ANN7, is distressing.”
ANN7 contract will not be renewed
MultiChoice will not be renewing ANN7’s contract when it expires in August, Mawela annouced at the press conference. In an interview on Bruce Whitfield’s Money Show, Mawela was pushed by the host to confirm MultiChoice paid a “ballpark” figure of “about R500 million” over five years. The annual fee paid to ANN7 escalated to R141 million a year from 2016. The channel also received a once-off payment of R25 million in 2013, the year ANN7 was launched by Infinity Media. This was because the “start-up costs” of a news channel were exorbitantly expensive.
Mawela dismissed the payments as normal practice, as did Jackie Rakitla, director of corporate relations in an interview with The Media Online at the time.
“While we understand that some people may not be aware of it, it is standard practice to pay for mainstream news channels – particularly for local 24-hour news channels,” he said. This was later contradicted by former CEO Imtiaaz Patel in a meeting with the SABC, the minutes of which were discovered by DA shadow minister of communications, Phumzile van Damme. Patel, who knows the Gupta family personally, said, “We would not normally pay for a news channel. Okay. We don’t. There’s a unique relationship with e.tv that everyone espouses etc. It’s got its unique conditions. They’re supposed to supply us with many more channels and it’s really quite tricky at this point in time. But besides that, we don’t pay for any other news channel, anyway, okay. So we wouldn’t normally pay you for a news channel.”
MultiChoice tasked its audit and risk committee to investigate its relationship with ANN7 and to a certain extent, the SABC. The results of the investigation were released on Wednesday. Mawela reiterated the “common practice” theme, saying the broadcaster paid for pay content, “including local news channels”.
He said the board had accepted the findings, admitting to “some mistakes” but said there was no evidence of corruption, bribery and impropriety in the deal.
“The board has found there were some mistakes in our dealings with ANN7, but there is no evidence of corruption or any illegal activity,” Mawela said. “Secondly, we acknowledge that we should have looked into the controversy surrounding ANN7 before public concern was raised and this should have been raised to the board sooner. Thirdly, we will not be renewing our contract with ANN7. Instead, we are going to be hosting a new black owned news channel and we’ll be calling for proposals from interested media groups soon. We will not be renewing ANN7’s contract and the channel will not be broadcast on DSTV once the contract ends on the 20th of August 2018.”
Van Damme disagrees. The Democratic Alliance late last year filed a complaint with Icasa, asking that the broadcast authority investigate the contracts between MultiChoice and the SABC, and the links to the Guptas. She says the Icasa inquiry is more important than ever.
“The MultiChoice press conference this afternoon provided very few answers, and left many questions unanswered,” Van Damme said in a statement. “While we welcome MultiChoice’s efforts in conducting its own review of its carriage agreement with Gupta-owned ANN7, it is difficult to objectively assess the findings of its investigations without sight of the full report.”
She said it was “scant on detail” and that no one had been held accountable for the mistakes made. “It is quite clear now that the ICASA probe is more important than ever to ensure that the full facts are put on the table, and those responsible for any wrongdoing are held accountable,” she said.
Icasa confirmed the investigation, ICASA has confirmed that it will look into the matter and intends approaching MultiChoice to provide responses to the formal complaint lodged by the DA. It said it would request copies of the contracts concluded between MultiChoice and ANN7 as well as between MultiChoice and the SABC.
Icasa investigation will continue
“Upon receipt of the contracts from MultiChoice and the response to other issues raised by the DA, ICASA for its part, will peruse all the copies of the contracts and submissions to determine if there may be any matters of non-compliance in respect of MultiChoice’s licence terms and conditions as well as applicable regulations,” it said.
Van Damme said the DA supported a plurality of voices in the media space, and did not believe in shutting down of those the party doesn’t agree with. “This matter was never about whether ANN7 should be on air, but about the exchange of money allegedly to influence government policy,” she said.
MultiChoice has vocally denied its support of ANN7 and the Guptas was related to its stance on encryption come digital terrestrial television. Mawela did, however, refer to MultiChoice tightening up its lobbying guidelines. And promised that a “robust” due diligence process be instituted for start-up channels.
In the meantime, eMedia has refuted claims that its agreement with MultiChoice had not been subjected to questioning, saying this statement was “misplaced”.
“The amount paid pursuant to an ordinary commercial contract such as eMedia’s is irrelevant when it comes to the issues facing MultiChoice and their relationship with ANN7,” said Vass. “That relationship, which has been ventilated in the media and the court of public opinion, details serious allegations of bribery, corruption and impropriety.”
eMedia and MultiChoice fundamentally disagree on the issue of encryption or non-encryption, with e.tv supported encrypted set-top boxes.
The New Age, the newspaper formerly owned by the Guptas, who sold it to ally Mzwanele Manyi, screamed its anger with the headline ‘ANN7 PUNISHED: News channel gagged for pro-transformation stance’.
Manyi said in the newspaper that ANN7 would not go down come 21 August. “We are going to study the press statement and try to make sense of what was said in it before we can exercise the myriad of options that are available to address the issue,” he said.
“Whether political or not we do not want to go into any of those things at this point, we are going to study this and make our move. ANN7 is not going down,” Manyi told the over 500 staff who stand to lose their jobs.
He accused MultiChoice of having “no real commitment to diversity of media through new voices and perspectives”.