MultiChoice, parent company to DSTV and its SuperSport channel is said to be considering canceling its plan to renew rights to the English Premier League and the UEFA Champions League.
Sources who spoke to ThisDay claimed that the company is considering the decision after its finances continue to be in the red despite the huge amounts it pays annually to secure the broadcast rights.
“It is becoming impossible to maintain many of these sports rights, especially the EPL, for Nigeria. The recent fall of the naira against the dollar has equally not helped matters,” the source said.
“Rights for the African continent used to be bought singly, but this changed in 2007 when a competitor, backed by the federal government, forced the EPL to excise Nigeria from the rest of Africa. Now, the cost of the rights for Nigeria has risen to almost the same with the rest of the continent put together, while the number of subscribers Nigeria is only about one-quarter of the rest of the continent,” the source said.
If the company continues to get less money from Nigeria on the rights, the source said:
“The cost of subscription in Nigeria continues to lag behind what is paid in the rest of Africa, especially in the face of the falling value of the naira. The company is approaching a situation in which it may be forced to choose between continuing to broadcast the EPL and its business survival.”
In its annual report published last month, Multichoice said its African operations continue to run at a loss despite the huge investment it has earmarked in the last few years.
The company said in the update that it expects headline loss of between 324 cents and 390 cents ($0.2638) per share for the year to March 31, compared with 410 cents for the previous year.
However, Multichoice Group said the disposal of 5% of its stake in MultiChoice South Africa reduced earnings per share (EPS) and headline earnings per share (HEPS) by 438 cents while foreign exchange losses are expected to reduce EPS and HEPS by 263 cents.
The company said it has 14 million households o its DSTV and GoTV platform.
Last year, Multichoice separated itself from Naspers, its parent company by listing on the Johannesburg Stock Exchange.