Business broadcasting shake-up
Why is the IDC funding this African television venture?
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