Local satellite broadcasters are upset about the SABC’s planned satellite partnership with Rupert Murdoch, saying they should have been first in line, reports Neil Bierbaum
THE business plan that South African Broadcasting Corporation management will present to the board next week for its satellite venture will centre on a deal proposing Rupert Murdoch’s News Corporation as a possible partner. This has raised howls of protest from local satellite players.
Although the business plan has been neither finalised nor approved, the SABC has announced that it intends converting the satellite broadcast of one of its existing channels into a second entertainment channel early next year. At present, the SABC has four half- transponders on PAS4, three carrying the existing SABC channels which are also broadcast terrestrially, and one carrying mostly sport.
The announcement was made during a roadshow around the advertising agencies this week. Sources indicate that the SABC is also investigating the possibility of expanding its satellite service to the Intelsat 704 platform, on which other operators are planning or delivering analogue services. According to Gert Claasen, who is heading up the satellite initiative, the corporation is “looking at both options. It depends on which partners we choose”.
However, industry players have questioned whether an expansion as risky as this should be entered into by the public broadcaster, particularly before investigations into its viability have been completed, and while it is still making losses on its terrestrial service. Mark Grey, managing director of satellite broadcaster Asec, asked this week: “Would a commercial operation enter into a high-risk expansion while it is making losses on its core business? And should the SABC be entering into a commercial venture that could enrich foreign players while excluding local
“Nobody,”insists Claasen, “has been excluded at this stage. We have had numerous discussions with [Jonathan] Procter, with Asec and with Primedia and we don’t think any of those are excluded, but we want to negotiate from the position we want.”
But Grey says there has been no formal advance from the SABC and Retcorp managing director Jonathan Procter says that while everybody has been talking to each other, “we are coming from very different points of departure and it will take some time before we find the necessary synergy”. Meanwhile, time is running out, he warns.
Among these satellite players there is the fear that an SABC venture will have a negative effect on local and international investors who might otherwise have invested in local satellite projects. “Local media are already undersubscribed,”says Procter, who believes that local players have the expertise and there is no need to jump into bed from the start with foreign partners. “Foreign partners should be carefully considered after local players have consolidated their positions.”
The original stated objective for the satellite service was to supplement the SABC’s income in the event of it losing its third channel and in the face of increased competition. The SABC has since requested that Parliament allow it to keep its third channel and it has asked the state for R496-million. Claasen insists that the satellite venture “will still go ahead”even if Parliament grants its other requests. “Government funding is required to increase our public service mandate,”he says. “Advertising income will migrate to other channels. This is an additional source to cross-subsidise the other
The Independent Broadcasting Authority does not seem to have a view on whether the satellite service is a justifiable source of revenue. The IBA report proposed that the SABC should get into satellite with one properly crafted channel. However, under existing legislation the IBA will readily grant interim consent to anyone who wants a satellite station as long as the applicant provides certain basic information, which then allows a satellite broadcaster to broadcast legally until the inquiry next year, after which the IBA “can withdraw consent”, according to councillor John Matisonn.
It appears that the SABC wants to make non- financial contributions with the option of converting these into equity at a later stage. Funding will therefore have to come largely from other sources. Sources indicate that Boland Bank is a potential partner. The SABC has also been talking to Worldwide African Investment Holdings, which recently withdrew from the Free-to-Air consortium in order to pursue an investment in satellite television.
Claasen enthuses that there has been “so much interest locally and internationally”that he has no doubt that the money will be found. But while he insists that the SABC would not enter into a partnership except on its own terms, it is well known that in all his deals, Murdoch insists on management control, something he would be likely to want here. Others also fear that Murdoch may use South Africa as a pawn in the fight with NetHold for international territories. “Obviously every player has their own agenda,”says Claasen. “That’s why we want to have our business plan in place. We have not made even moral commitments to anybody.”
A partnership with Murdoch would also have other drawbacks. While Murdoch holds the broadcast rights to southern hemisphere rugby, M-Net, through NetHold, has secured many of the movie rights for Africa, including those emanating from the Murdoch-owned 20th Century Fox Corporation. Claasen acknowledges that Murdoch is not the best partner from a programming point of view but, he adds, “we have been buying programmes for 20 years and so we do have our own contacts and sources”.
Murdoch, with his interest in book publishing interests, has allegedly manipulated his way past legislation in the United Kingdom and China by offering book publishing deals to Margaret Thatcher and the influential daughter of Chinese leader Deng Xioaping. His reputed offer to Newt Gingrich earlier this year raised a stir in the United States. Fortunately, President Nelson Mandela has aready published his autobiography, although Pallo Jordan or Zwelakhe Sisulu may still have a story to tell.