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HomeBusiness NewsThe day DStv almost lost the rights to a major sports tournament

The day DStv almost lost the rights to a major sports tournament

SuperSport almost gave up broadcasting the Indian Premier League (IPL) cricket this year because a middleman was charging more for the rights than DStv-owner MultiChoice was willing to pay.

MultiChoice Group financial chief Tim Jacobs told MyBroadband that they weren’t pulling a stunt to negotiate the price down — they really had walked away when they couldn’t get the deal they had budgeted for.

The day before the IPL was due to start, MultiChoice told subscribers via the SuperSport Twitter account that it would not broadcast the tournament.

Less than a day later and two hours before the opening coin toss, SuperSport announced that it had secured a deal to broadcast all 74 matches live.

“An intermediary company bought all of the global rights for the IPL and then came to all of the broadcasters, and you can just imagine… What are they going to do? They’re going to put a big fat margin on top of the price that they paid,” Jacobs told MyBroadband.

The intermediary company Jacobs was careful not to mention directly is Viacom18, a joint venture between Paramount Global and Ambani Reliance Industries.

Last year, the company beat strong contenders, including the Walt Disney Company and Sony, in a heated face-off for the rights to broadcast and stream the IPL between 2023 and 2027.

It reportedly bid in the region of $3 billion (R57 billion) for its slice of IPL broadcasting and streaming rights.

Four contracts were on offer, covering television and digital rights and a selection of important matches. Rights were divided into various regions, with one set focussed on the Indian subcontinent and others overseas.

Viacom18 bought the rights for three of the five global territories — sub-Saharan Africa, Europe, South East Asia, and Oceania — while the Times Group secured rights for the US and Middle East.

Towards the end of 2022, Viacom18 Sports and Cricket South Africa also announced a partnership, giving the company exclusive digital and TV rights for all international Proteas cricket — from 2024 to 2031.

“Viacom18 will present all senior men’s international and senior women’s international competitions played in South Africa,” a statement on the partnership said.

Should MultiChoice also fail to negotiate for these rights, Proteas cricket matches may no longer be available on DStv’s SuperSport channels.

Jacobs told MyBroadband that they have very clear price points in mind regarding what MultiChoice is prepared to pay for broadcast rights.

“We made it very clear what we were prepared to pay, and they called our bluff. We genuinely were coming off air [if Viacom18 didn’t capitulate],” he said.

“We just felt that we needed to hold the line,” stated Jacobs.

“If everybody thought that you could just interpose a third party between ourselves and the originator we had always negotiated with, and suddenly we’re going to pay a whole lot more money — what’s the commercial rationale for that?”

Tim Jacobs, MultiChoice Group CFO

Jacobs explained that MultiChoice has had to be disciplined about its spending to keep costs down and price increases to a minimum.

“This is part of the challenge that we’ve got. Especially when you’ve got a big market like South Africa where you’ve got load-shedding, where customers are under massive economic pressure…” he said.

“If you can’t pass full inflationary price increases into the market, you’ve got to be very disciplined about your cost base. If you’re not disciplined about that — that is where you lose your business.”

Jacobs said that after announcing to subscribers that they weren’t showing the IPL, Viacom18 realised they were serious.

They also knew that as soon as the tournament started, the value of the rights would decrease significantly.

“If the customer base is not watching it from the start of the tournament, they can lose interest very quickly,” Jacobs said.

When Viacom18 realised they might not get any money for their rights in MultiChoice’s African markets, they gave in.

“It’s very unusual for this to play out in the market,” said Jacobs.

“If they had come to us and agreed to [our price] before we had gone to press… [it wouldn’t have happened this way].”

Jacobs said they really did try to give as much time as possible for negotiators to reach a deal, leaving the announcement to the very last minute.

“They kind of pushed us right to the line,” he said.

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