A reliable source close to the companies attributed the development to the rising cost of international sports rights and the continually falling value of the naira against other major currencies.
“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.
The company’s annual report, published at the end of last month, showed a gaping hole in its Nigerian operations, a situation the source attributed to the cost of EPL rights, as well as those for other competitions such as the UEFA Champions League to Nigeria, which is charged separate to the rest of Africa.
“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.
The decision to reconsider the continued purchase of the EPL rights, THISDAY learnt, was not exactly new.
Two years ago, the source said, MultiChoice almost did not renew the rights because the company was having difficulties justifying the huge cost when placed side by side with what its subscribers were able to pay as subscription when compared with the rest of Africa.
According to it, “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.”
MultiChoice pays about $250 million dollars for the rights to the EPL and about 100 million Euros for the UEFA Champions League, another football property the company may have to jettison if it wants to stay in business, explained the source.
MultiChoice Nigeria, according to the group’s annual report available on the company’s website https://www.multichoice.com/, is only managing to break even in spite of rising subscriber numbers that keep it only second to South Africa in subscriber count.
The results show that percentage increase in expenses exceed a percentage increase in revenues, an indication that while it is spending more on its operations, it is not making enough to keep up.
This, the source said, is attributable to the high cost of content like the EPL and UEFA Champions League.
Attempts to reach MultiChoice Nigeria for comments on this failed, as the company’s communication department continued to decline comments on its business relationship with content providers. First published in This Day.
