A proxy war or business deal gone wrong as MultiChoice dumps ANN7?
Is MultiChoice and ANN7 debacle a proxy war or a deal gone wrong?
In his entrepreneurial wisdom, the world's third-richest man and magnate investor, American businessman Warren Buffet, counsels us that "risk comes from not knowing what you are doing".
This pearl of business wisdom struck me this week when it became apparent that MultiChoice - a pay-public satellite broadcast entity wholly owned by multinational company Naspers - decided not to renew a broadcast contract with formerly Gupta-owned ANN7, a local 405 television channel operating on the DStv boutique.
This decision not only set off a heated public discourse over business practices by white-owned entities, but exposed the post-apartheid state failures to transform monopoly capital industries.
Easily, the public outrage at both the two broadcasting agencies can best be described as "similarly wrong and similarly right", in that government has failed, through its public policy instruments such as Icasa, MDDA and other legislative and regulatory agreements, to bend the hand of what it calls "white monopoly capital (WMC)". Equally, WMC as seen through the battle eyes of MultiChoice and ANN7, has consistently played black against black economic aspiration, with the state forced to swing between the two as with the swapping of the political guard at the top.
Therefore, blaming either MultiChoice or the Guptas is pointless, because it is largely the state that failed to deliver on the economic aspirations of the oppressed majority to the white wealth owners.
Normally, big corporate entities consider investment risk management high on the value chain after profiteering strategies and reputational image, with little regard for socio-political considerations that influence them.
This is mostly because big business does not want to be publicly seen as politically inclined in its production lines and decision-making processes despite all of them either being convicted supporters or capitalist associates of the political incumbents.
Over the democratisation period, MultiChoice, and in particular its parent company Naspers - an apartheid collaborator and beneficiary of uneven economic policies - attempted to shed its apartheid skin with great success until as recent as their association with the Guptas, probably as a business strategy to appeal to state power.
Now that the Guptas, who offered an alternative political economic narrative, face the political wilderness and a hailstorm of business controversies with possible criminal prosecution, the risk has become too big to ignore.
This, essentially, makes the MultiChoice decision look suspicious and disingenuous, because on the face of it, MultiChoice could easily be preparing to replace the Gupta TV with a "new black-owned televised voices" that will resonate with the new incumbents at the Union Buildings.
Monopoly reality has it that both MultiChoice and Naspers have always been courted by significantly important native black-owned media players for a similarly tailored marriage of convenience they offered the Guptas.
They failed because most of them lack the immediate political clout that the Guptas had at the time the signing of the new TV deal was concluded.
That much MultiChoice parent company Naspers admitted on May 26 last year to have contravened the Competition Act, restricting competition in the media space through price fixing among others, which resulted in it paying R22-million into the Economic Development Fund to enable the development of black-owned small media and advertising agencies.
Still, there is enough corporate literature and verdicts both in South Africa and globally, that corporates are engaged in double-adapting, anti-competition oppressive tendencies that seek to build and dismiss their competitors while maintaining their monopolies across industries.
MultiChoice itself is a white monopoly capital entity and even with its latest divorce from ANN7, it seeks nothing but a legally sound escape route to greener pastures.
Naspers, as a veteran multinational player with long-standing South African political economy experience, probably knew in December there will be a change of political guard which will warrant a change of business strategy to ensure its continuity.
lThe author is an entrepreneur and MD of Black Rose Connections
Would you like to comment on this article or view other readers' comments? Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.