Busi­ness broad­cast­ing shake-up

Why is the IDC fund­ing this African television ven­ture?

Finweek English Edition - - Openers - BELINDA AN­DER­SON be­lin­daa@fin­week.co.za

DUBAI- AND IDC-FUNDED Africa Busi­ness News (ABN) – which owns the rights and fran­chise to CNBC Africa – is al­ready shak­ing up the lo­cal me­dia in­dus­try with the news of sig­nif­i­cant de­fec­tions from Sum­mit TV and the SABC to the new sta­tion, which goes on air in June.

Head of the Me­dia and Mo­tion Pic­tures Strate­gic Busi­ness Unit at the IDC, Moses Silinda, told Fin­week that it had put up R47m out of the to­tal of R144m ($20m) as an eq­uity in­vest­ment, giv­ing it a 30% stake.

The big­gest share­holder in the ven­ture is a group of Dubai-based in­vestors led by CNBC Africa chair­man Za­far Sid­diqi, who ap­proached the IDC di­rectly. The deal took about two years to put to­gether.

Silinda said the ex­pe­ri­ence of this pro­moter group was one of a num­ber of rea­sons why the IDC agreed to par­tic­i­pate in the ven­ture, cou­pled with the strength of the CNBC brand and the fact that it had at­tracted for­eign di­rect in­vest­ment.

Silinda said the IDC be­lieved the sta­tion would im­prove aware­ness of in­vest­ment op­por­tu­ni­ties in Africa, help raise per­cep­tions of the con­ti­nent, and help in­te­grate re­gional stock mar­kets as well as fa­cil­i­tate cross-border in­vest­ments within Africa. It would also pro­vide an African plat­form for multi­na­tion­als to ad­ver­tise on and broaden the pub­lic’s view­ing op­por­tu­ni­ties.

CNBC Europe is cur­rently aired on DSTV but Silinda said, over time, the group would look to se­cure var­i­ous al­ter­na­tive plat­forms to en­sure max­i­mum ex­po­sure for the sta­tion.

He said the sta­tion would also cre­ate over 200 jobs and en­able skills de­vel­op­ment.

CNBC Africa CEO Trevor Ormerod, for­mer MD of Pri­me­dia @ Home, says the sta­tion will em­ploy around 120 peo­ple from the out­set – enough to ful­fil all the ini­tial tech­ni­cal, op­er­a­tional, sales and pro­gram­ming re­quire­ments. Bu­reaus will first be opened in La­gos, Abuja and Cape Town, and the sta­tion will broad­cast from its Sand­ton head­quar­ters (in the mean­time it is us­ing tem­po­rary of­fices at the Cam­pus in Bryanston). It will ini­tially gen­er­ate nine hours of unique con­tent and tap into other rel­e­vant CNBC bu­reaus and feeds, be­fore ex­pand­ing over time.

Ormerod said there would be about eight an­chors, some of whom have al­ready been se­cured. Th­ese in­cluded Sum­mit TV’s Bron­wyn Nielsen, who has been ap­pointed se­nior an­chor. SABC ra­dio’s Nikiwe Bik­it­sha is leav­ing the rocky wa­ters of State-owned me­dia (her co-pre­sen­ter on SAfm, John Perl­man, re­signed last week, re­port­edly over the an­a­lyst-ban­ning row) into the arms of the global television net­work.

Mean­while, other an­chors will in­clude Lee Roberts (ex SABC, Sum­mit and Busi­ness Times per­sonal fi­nance and mar­kets jour­nal­ist), Siki Mgabadele (ex SAfm Mar­ket Up­date pre­sen­ter) and Ler­ato Mbele (ex SABC 3 pre­sen­ter).

Sum­mit TV’s head of pro­gram­ming, Gary Al­fonso, has also re­signed and will as­sume a sim­i­lar role at CNBC Africa.

Ormerod reck­oned the sta­tion has enough cash to see it through the first three years with­out any ad­ver­tis­ing rev­enue. But it will ob­vi­ously start tap­ping into ad­ver­tis­ers from day one. With the head of sales start­ing in Fe­bru­ary, Ormerod says it will go to mar­ket shortly there­after.

The ex­cite­ment of a new chan­nel’s emer­gence on to the scene is rem­i­nis­cent of the ar­rival of what was then an­tic­i­pated to be an ex­cit­ing new en­trant to the SA me­dia land­scape – ThisDay. But the Nige­rian news­pa­per fran­chise – which also poached heav­ily from the in­dus­try – closed its doors in 2004 af­ter burn­ing sub­stan­tial amounts of cash. How­ever, given the dif­fer­ent cal­i­bre of back­ers, it seems likely that’s where the anal­ogy will end.

Silinda said the IDC would prob­a­bly sell its stake to an em­pow­er­ment group or any third party that both the IDC and the other in­vestors be­lieved would add value at a later stage. The tim­ing of the exit would, how­ever, be de­pen­dent on the roll-out, suc­cess and prospects of the busi­ness. But he said it ex­pected the busi­ness would be­gin to re­alise re­turns for share­hold­ers within five years.

All fired up. Trevor Ormerod

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