Showmax costing up to R3.3-billion to relaunch

In what is rather curious timing, MultiChoice Group on Thursday disclosed details of the monetary investment it and partner Comcast are making — and will still make this financial year — in the relaunched streaming platform Showmax: up to R3.3-billion.

The disclosure to shareholders comes on the same morning that French broadcasting giant Groupe Canal+ said it had written to MultiChoice’s board of directors to express an interest in buying out the JSE-listed pay-television operator and parent of DStv, Showmax, SuperSport and GOtv.

The timing may, however, be coincidental in that MultiChoice is required to make the disclosures under JSE rules.

MultiChoice has worked closely with Comcast subsidiary companies, US-based NBCUniversal and UK-based Sky, in relaunching Showmax. The partnership came in spite of Canal+ buying up 31.7% of MultiChoice’s equity in recent years through the open-market purchas of shares.

The new Showmax, MultiChoice told investors via the JSE on Thursday, provides an “opportunity to capture the best of both partners’ (NBCUniversal and Sky’s) capabilities and competitive advantages to deliver a differentiated subscription video-on-demand service that offers world-class entertainment at affordable prices to millions of African consumers.”

In Thursday’s statement, MultiChoice revealed the following information:

• It contributed its Showmax business for a 70% equity stake in Showmax Africa Holdings and provides ongoing business support through its local market expertise, local content production capabilities, its portfolio of general entertainment and sports rights licences as well as its back-office support functions.
• Comcast, through NBCUniversal, acquired a 30% equity stake in Showmax Africa Holdings and provides ongoing support through the licensing of both its Peacock platform and content from NBCU, Universal Pictures, Peacock and Sky.
• MultiChoice, through its owned subsidiary MultiChoice Group Holdings, and Comcast, through NBCU, are providing funding to Showmax Africa Holdings, during its investment phase in proportion to their respective shareholdings. The shareholders will share in profits on the same basis in future.

Equity funding is provided monthly or at other intervals, depending on the new Showmax business’s working capital requirements and as may be determined by the board of Showmax for budget purposes, subject to a maximum capped amount.

Read: Why Canal+ wants control of MultiChoice

MultiChoice further disclosed that:

• MultiChoice Group Holdings and NBCUniversal have provided US$20-million (R374-million) in equity funding to the new Showmax, each in proportion of their respective shareholdings (70/30 split).
• On 2 February, MultiChoice Group Holdings and NBCUniversal will provide $30-million (R561-million) in equity funding to Showmax, each in proportion of their respective shareholdings.
• Additional equity funding to a maximum of $127-million (R2.4-billion), of which 70%, or up to $88.9-million, will be carried by MultiChoice. This is anticipated for the remainder of MultiChoice’s financial year ending 31 March 2024.  — (c) 2024 NewsCentral Media

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