MultiChoice bets big with R1.8-billion BetKing deal

MultiChoice Group CEO Calvo Mawela

MultiChoice Group has expanded its repertoire with an agreement to buy a 20% stake in Africa-focused sports-betting platform BetKing for as much as R1.8-billion, giving it access to a sector that’s emerged as a winner from lockdown restrictions that have encouraged homebound entertainment.

“Sports betting is an interesting market that is aligned to our pay-TV business,” said MultiChoice CEO Calvo Mawela in an interview on Thursday. “We have a lot of sport on our platform, and many people that are betting watch more games.” he said.

DStv packages include live English soccer, while MultiChoice agreed to a deal with Walt Disney earlier this year to add two ESPN channels showing US pursuits such as basketball.

BetKing started in Nigeria and has shown rapid growth over the past two-and-a-half years, according to the CEO. “They plan to be pan-African and will be entering South Africa at some stage, too,” he said.

Meanwhile, MultiChoice has plans to develop more local productions with Vivendi’s Canal+, the French media group that’s built a 12% stake in Africa’s largest pay-television provider.

While Canal+ has described its acquisition of shares in Johannesburg-based MultiChoice as “a long-term financial investment”, the South African group has seized on the opportunity to work with its new investor, according to Mawela.

“We have started a collaboration with Canal+ on co-productions that will also help with sharing costs,” Mawela said. “More and more Africans like to see one of their own on television, and that is why we are shifting our strategy to focus even more on local content.”

The duo have already teamed up on Blood Psalms, a drama based on pre-colonial South African mythology, which is due to be broadcast on MultiChoice’s Showmax streaming service next year.

The making of higher-budget African shows will help Showmax grow a local content offering that’s helped it differentiate from Netflix, which is seeking to expand on the continent and has started to produce its own dramas set in South Africa and beyond. MultiChoice launched Showmax in part to head off the threat from its larger US rival, and the service can be subscribed to separately or as part of a DStv package.

MultiChoice may also be able to sub-license the rights to certain international shows to Canal+ to broadcast in French-speaking African territories, another cost-sharing initiative, according to the CEO. “As much as you have competitors, there are projects that can be identified that you can work on together,” he said.

MultiChoice, spun out of Naspers in February of last year, reported a 6% increase in active subscribers over the six months to September, breaching the 20 million mark for the first time. Revenue and operating profit also gained, according to a first-half earnings statement earlier Thursday.

Shares were trading 1.5% higher at 9.45am to value the company at R56-billion.  — (c) 2020 Bloomberg LP