SABC-MultiChoice deal is effectively a merger

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SABC-MultiChoice deal is effectively a merger

This article originally appeared in the Daily Maverick on 7 October 2015.

By: William Bird Media Monitoring Africa

The deal entered into by the SABC and MultiChoice constitutes a notifiable merger. Given the role and positions of both the SABC and MultiChoice, they should have followed the accepted practice when entering into a merger and notified the Competition Commission. The impact of that would have been that the deal would have been opened up for scrutiny and the possibility of the deal being voided would have been raised. This might all sound a little distant, and its impact a little vague. But if we consider the real impact of the agreement it might make its relevance more clear.

On Wednesday morning last week my six-year-old boy, together with his nursery school friends and a few parents protested against the danger of cars going the wrong way down a one-way system. Outside the Union Buildings thousands gathered to protest against corruption. Meanwhile, I spent the day in an air-conditioned room in Pretoria, at the Competition Tribunal. At the school, the children chanted about not driving the wrong way down a one-way street. At the Union Buildings, popular leaders spoke and key messages about fighting corruption were argued. In our room an assembly of advocates argued sections, businesses, control and mergers with plenty of “my learned friends” thrown in.

To the outsider there was huffing and puffing and the merry sound of cash registers. To those of us involved it was a riveting battle between some of the finest minds in our country. We witnessed cutting insults and put-downs with the most wonderful politeness. When an advocate says “back-of-the-envelope calculations” what they really mean is “thumb suck, untested, unverified rubbish”, when they say “my learned friend” (sometimes they actually are friends outside the room) what they usually mean is “my doorknob opponent”. While the contrasts are stark, all are illustrations of our democracy in action. These examples also demonstrate how tangible and inaccessible our democracy can be, and in so doing also serve to highlight the importance of journalism. But let’s go back a few steps to why and how we got to our air-conditioned room.

The case being heard focused on an application brought by Caxton, Media Monitoring Africa (MMA) and the SOS Support Public Broadcasting Coalition (SOS), calling for the deal entered into by the SABC and MultiChoice to be declared a notifiable merger. In essence, and this of course is disputed by the SABC and MultiChoice, it is a bad deal for the SABC. See link here and from page 66 for the original agreement.

I would encourage you to read the agreement and decide for yourself if it is good or bad for the SABC. To be clear, there are those who seem to think the deal isn’t so bad, the Communication Workers’ Union being one, their most recent press release includes the following: “We also welcome the fact that the SABC’s archives are not being sold to MultiChoice.”

The signed agreement between MultiChoice and the SABC says MultiChoice does not and will not own the SABC archives.

The agreement could simply be coined as “rental agreement” which is a practice internationally. The advertisement revenue will also be retained by the public broadcaster.

The agreement will also fund the digitisation of the SABC archived content to assist the public broadcaster’s digital terrestrial television (DTT) readiness. In our view such an agreement could also be an answer to the question of “funding model”.

I’m not quite sure how they reach that conclusion and it would seem they are privy to the amended agreement that the rest of us have not seen as the elements they refer to are not contained in the original agreement. Be that as it may, we believe the agreement has handed clear elements of control to MultiChoice, this includes the archives. We also believe the decision on the SABC policy on encryption is another key element in the agreement, such that individually or combined the agreement constitutes a notifiable merger. In other words, given the role and positions of both the SABC and MultiChoice, our view is that they should have followed the accepted practice when entering into a merger and notified the Competition Commission. The impact of that would have been that the deal would have been opened up for scrutiny and also the possibility of the deal being voided would have been raised. This might all sound a little distant, and its impact a little vague. But if we consider the real impact of the agreement it might make its relevance more clear.

On some level it sounds like a great idea for the SABC to have its own 24-hour news channel. Similarly, it surely makes sense for the public broadcaster to make more effective use of its archive. There is certainly some validity to these ideas. The problem is that the SABC is no ordinary broadcaster, it’s the public broadcaster, and that means it really is hard to justify devoting considerable resources to a channel available exclusively to a limited audience who are DStv subscribers. We need to also consider that the audience who already own such a decoder and, by virtue of that decoder, already have access to a wide range of news and information services. What about the majority of people who don’t have access to a range of news services? Would it not make more sense for them to be targeted by the public broadcaster to give them wider access to a dedicated news service?

In fairness, this has been a plan that has been floated for some years, with little to no justification of the selection of the platform for the launch of the service. It is a plan the MMA and SOS strongly critiqued. We are also aware that there is a plan for the channel to be made available as a free-to-air channel once DTT is realised. So it should mean that when people get access to any DTT set-top box the news channel should be available. Despite this we already know that the channel’s conception, design and format have been tailored for a particular set of audiences so even when it becomes available as a free-to-air channel it will, by virtue of it being part of the agreement, likely remain targeted at audiences who already have a wide range of services. So it might help meet the needs of the already overserviced.

The second issue revolves around the archive. It is our view that control of the archive has been handed over by the SABC. Now even if we accept some arguments put forward by the agreement’s proponents, that it is a only a small selection of the archive, (this issue is to be decided by the Competition Commission), it is our view that had it been any other broadcaster this might have been fine, but the SABC is the public broadcaster and the decision to hand over exclusive rights to the archive (all or sections), such that citizens can only view such programmes if they have a DStv decoder goes directly against the mandate of the SABC. Yes this might be a strategic decision by MultiChoice and yes it might even yield some economic value for the SABC but that doesn’t justify or negate the simple fact that the majority of South Africans will be denied the ability to view that content on even the most rudimentary DTT set-top box. MultiChoice knows the value of archives and content, it’s one reason it has been buying and creating content for over a decade and well done to it for seeing its value. Shame on the SABC for seemingly not!

The third key element of the deal that we are concerned about is the issue of encryption and set-top boxes. The issues are detailed and complicated and fleshed out in some detail in the legal papers, but for the purposes of this piece what’s critical is the impact of the agreement on the policy of the SABC. What is clear in our view is that as a result of the agreement the SABC changed its policy. No clear evidence has been provided by the SABC to prove that this isn’t the case, and in fact during the hearing last week the only piece of evidence put up by the SABC legal team for its view that the agreement had no impact on the decision was shown by Advocate Steven Budlender to have post-dated the agreement – in other words no real evidence. Again leaving the merger issue aside, it should be of profound concern to South Africans that a critical policy decision (irrespective of whether it is good or bad) can be determined not by the appropriate SABC policy and board processes, but as part of a deal with a competitor.

While the Competition Tribunal weighs the arguments and evidence, we have a public broadcaster that has acted in a manner that clearly undermines its mandate, in respect of the news and entertainment channel and archives, and has failed in good corporate governance by allowing a key policy issue to be affected if not determined outside of its corporate governance structures.

So where does this leave us? We have a highly contested deal, we have protests about corruption and seemingly small issues of road safety and traffic law adherence. As I noted at the start, each of these elements are means of our democracy being tested, developed, expressed, protected, voiced and deepened? What’s equally critical is that each of these elements are understood, and that audiences who are not involved understand the issues involved and the contested elements of each. Good journalism is the clear response to this challenge. It isn’t enough to know that there is a protest, or case in a tribunal; that kind of thing is easy to send through a tweet or similar. What is essential is that if people engage with the media they should emerge with a clear understanding of the issues. Now at this point it is easy to decry to quality of journalism, how rubbish our media is, etc, etc. What I want to do instead is offer something slightly different to that, to consider just how hard it is to be a good journalist, and how hard it is to do good journalism in our current climate.

For one thing you might be surrounded by journalists who don’t care, who don’t have skills and are only interested in building their personal brand. For another, you know that the more time you spend on one story there are others you are not telling, and other stories that are accumulating. In addition to the standard time constraints, and capacity issues you are being bombarded by public relations and spin, by management and owners with their own ideas and pressures. You might even have some completely ridiculous new pressure from management seeking to make you meet your audiences so they add your social media popularity as an element of your key performance areas. So it’s not just telling the bloody story, it’s making sure you clickbait it so it gets lots of hits.

In addition, because of the massive reductions in most newsrooms you no longer have the luxury of reporting on one area or set of issues but have to cover many. The impact of this is that you are required to get a handle on just about every area and issue. This would be okay if you were a minister and you had several minions to do your research and keep you up to date, but it becomes really hard when it is just you and your group of sources. Throw into this mix the importance of the role that you play and the need to be professional and ethical and really we should all be amazed that there isn’t an avalanche of absolutely hideous reporting. To report on a march requires different skills to reporting on a small community protest, and different skills to reporting on a complex set of legal proceedings and making them make sense to readers.

Of course the ideal is nice, to have highly trained, highly skilled and resourced journalists helping us understand and comprehend our democracy in all its iterations. Our reality is, sadly, very different. The real question then is how can we build new models for journalism that allow, incentivise and realise quality journalism? We know there are patches of it, but how can we grow those patches into fields?