Kwese TV Hit by Cash Flow Prob­lems, Misses Pay­ments for World Cup Rights

- Business · Belarus · FIFA · UEFA · National Basketball Association · United States of America · Russia · Russian Empire · Austria · Belgium · Iceland · ESPN Inc.

Pan-African pay-tele­vi­sion ser­vice provider, Kwese TV, has been hit by a cash crunch, forc­ing it to de­fault on pay­ments to rights hold­ers to some of the con­tent it seeks to broad­cast. A re­cent re­port pub­lished by TV Sports Mar­ket listed rights hold­ers to whom Kwese TV owes fi­nan­cial obli­ga­tions to in­clude foot­ball’s gov­ern­ing bod­ies, FIFA and UEFA as well as Na­tional Bas­ket­ball As­so­ci­a­tion (NBA) of the United States of Amer­ica. Ac­cord­ing to the re­port, Kwese TV has missed out on pay­ment for rights to the 2018 World Cup hold­ing in Rus­sia. It has also de­layed in pay­ing to UEFA for the rights to Euro 2020, Euro­pean qual­i­fiers and the Na­tions League. The re­port added that the pay-tele­vi­sion provider has also missed out on pay­ments to ESPN for a pack­age in­clud­ing rights to many US sports prop­er­ties, use of the ESPN brand name and the cre­ation of be­spoke con­tent for an ESPN-branded chan­nel from 2017 to 2024. Sim­i­larly, pay­ment has not been made to the NBA for ex­clu­sive plat­form-neu­tral rights to the league from 2016-17 to 2020-21. The re­port quoted se­nior staff of Kwese as say­ing they were rea­son­ably op­ti­mistic about the fund­ing rounds. Joseph Hun­dah, Chief Ex­ec­u­tive of Kwesé’s par­ent com­pany, Econet Me­dia, was quoted by TV Sports Mar­kets as say­ing that build­ing the pay-tele­vi­sion com­pany’s port­fo­lio of sports rights had “re­quired more in­vest­ment than ini­tially fore­cast”. “To en­sure trans­parency dur­ing this process we have been in con­tin­u­ous com­mu­ni­ca­tion with our part­ners who re­main ex­tremely sup­port­ive and have shown great be­lief in our busi­ness,” Hun­dah told TVS­ports Mar­kets. The pub­li­ca­tion quoted a source at one of the rights holder owed money by Kwesé as say­ing the panAfrican pay-tele­vi­sion com­pany had var­i­ously promised pay­ment in Jan­uary, Fe­bru­ary and March, but did not de­liver. “There’s no change in the re­la­tion­ship though. We do be­lieve the money will come through,” he was quoted as say­ing. The slow roll-out of Kwesé’s pay-tele­vi­sion op­er­a­tion across sub-Sa­ha­ran Africa, grad­ual sub­scriber growth and its con­sid­er­able ex­pen­di­ture on rights are be­lieved to be re­spon­si­ble for the se­ri­ous cash-flow prob­lems. Kwesé is thought to have 120,000 sub­scribers across the 13 ter­ri­to­ries in sub-Sa­ha­ran Africa in which it cur­rently op­er­ates. Hun­dah, how­ever, de­clined to com­ment on the sub­scriber num­bers, say­ing: “We are ex­tremely happy with our progress on sub­scrip­tion num­bers across our mar­kets con­sid­er­ing that we only launched in the last quar­ter of 2016.” A Kwese source told TV Sports mar­ket that the com­pany’s fu­ture could de­pend on two rounds of fund­ing, one thought to have been re­cently con­cluded, and one to be­gin in June. Se­nior mem­bers of the com­pany are said to be “op­ti­mistic” about the fund­ing rounds. Rights hold­ers have been promised pay­ment by the end of April, the re­port re­veals and goes fur­ther to claim that right hold­ers are ready to give Kwese a chance de­spite its in­abil­ity to meet pay­ment dead­lines, with the be­lief the com­pany will even­tu­ally come through and meet its com­mit­ments.

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