Midi TV, owner of fledgling broadcaster e.tv, is besieged by problems, report Mungo Soggot, Donna Block and Ivor Powell
Embattled television company Midi TV has hired one of South Africa’s most respected broadcast managers, Quentin Green, to help save fledgling broadcaster e.tv from the gallows.
Midi TV’s chief executive officer, Marcel Golding, confirmed this week that Green, formerly the head of SABC TV, was already on board as commercial director. Ironically, Green was a key member of one of the rival media consortia beaten by Midi TV last year in the race for the first new television station to open since the 1994 election.
Green will provide a much-needed fillip to e.tv’s management, which has been wracked by factional infighting since the station went on air last year. He joins as e.tv limbers up for what could be the Independent Broadcasting Authority’s (IBA) most important battle to date – a battle that could culminate in the revoking of e.tv’s licence.
An IBA representative said Midi TV managed to secure a postponement of a Broadcasting Monitoring and Complaints Committee hearing into its alleged licence transgressions by applying to the IBA for key amendments to its licence. These include a reduction in the amount of South African programmes it has to broadcast.
It was a bold move on the part of Midi. When Midi was awarded the licence a year ago the IBA expressly warned it that no amendments to its application would be countenanced. Meanwhile, an increasing number of disillusioned independent television producers have been waiting to pounce if Midi failed to live up to its promises.
The legislation governing South Africa’s broadcast licence regime allows formal complaints to be lodged against such applications. Independent producers have now jumped at the chance to formally challenge Midi which they see as having been responsible for undermining the independent broadcast sector.
Their argument is that Midi was awarded its licence because of its empowerment credentials and because of its pledge to foster this sector of the entertainment industry, and that now it is seeking to go back on its word. Golding refutes this, saying e.tv is now “exceeding” its local content quotas. To date 11 complaints have been filed.
While the question of local content is foremost in the complainants’ sights they’ve also hit out at the other key aspect in Midi’s application for change to its licence – a shake-up of its ownership structure.
The Midi consortium is led by Hosken Consolidated Investments, an empowerment investment company with strong union links, several other empowerment groups including Vula Communications, and United States media giant Warner Brothers.
Tension has been brewing between Hosken and Vula since the bid for the e.tv began. Both are gunning for control of the minority shareholders. But because Hosken has been bankrolling the operation, it has now moved to restructure Midi’s shareholding to fully reflect the relative investment by itself on one hand and its business partners on the other.
Golding, who is head of Hosken, this week said: “Shareholders who have invested in the company should be the ones with the equity.” Golding wants to put all nine South African shareholders into one umbrella company called Sabido Investments to help lure a cash-flush partner into the Midi fold.
Midi’s opponents say that considering Midi won the licence mainly because of its empowerment credentials, such a move would undermine the spirit of its licence. They say it would allow Hosken and Golding to control and change the empowerment component without the scrutiny of the IBA and the rest of the industry.
While Golding is diplomatic about the failure of his consortium partners to put up their money, some Midi sources have hinted that Hosken could easily sue its partners for failing to honour their funding agreement.
Meanwhile there are allegations that Golding has been working to consolidate the operation on other fronts as well. One of the companies currently in dispute with Midi is Sprockets Productions, operating as Deadtime, which has provided five hours of programming per night for e.tv, thus taking care of a large proportion of the local content requirement in the e.tv licence.
Sprockets is currently in litigation with Midi, seeking the company’s liquidation. They claim Midi owes in excess of R5-million on the R13-million Deadtime contract. Golding contests the debt. However, in negotiating the settlement of the debt, Golding offered to buy a majority shareholding in Deadtime – on behalf of Midi.
In a letter dated July 12 1999 Golding proposed that e.tv and Deadtime enter into a partnership which would involve Deadtime significantly in the branding and channel identification of e.tv.
But he added the rider: “As e.tv has made a significant financial contribution to Deadtime, and continues to make available a daily platform, e.tv must own at least 51% of the joint venture company.”
According to Sprockets’s Sharlto Copley, Golding said if the offer was accepted, Deadtime would become integrally involved in the e.tv operation.
Buying into Deadtime on behalf of Midi as the e.tv holding comapny could have violated the e.tv licence, which specifically excludes the licence holder from involvement in outside production.
Sprockets declined the offer, and took the matter to court instead.
The IBA says it will take about two months for it to decide on e.tv’s fate. At stake are the two issues the IBA is supposed to care about most – black empowerment and local programming content.
The question is whether the IBA will have the mettle to either force Midi to comply with the letter of the law or shut it down. Midi now get the chance to respond to the 11 objections to its licence amendment application, after which the IBA investigates, initiates a hearing and then passes judgment.