MultiChoice is 'technically insolvent', but hopes for a turnaround

Clarence Ford speaks to Barbara Friedman about trending online topics.

(Skip to 2.50 for this one.)

MultiChoice has reported a R4.1 billion loss for the year ending 31 March 2024, becoming technically insolvent.

It is the company's worst financial performance ever.

Apart from platforms like DStv, Showmax and SuperSport, MultiChoice also owns cybersecurity firm Irdeto, the medical and security services app Namola and the Nigerian sports betting group BetKing.

MultiChoice recorded a 42% increase in losses compared to last year as it lost subscribers and faced unfavourable foreign exchange rates.

The company’s total assets have shrunk from R47.6 billion to R43.9 billion, while liabilities have risen to around R45 billion. With negative equity of R1.068 billion, MultiChoice might be unable to settle all its debts if forced to sell its assets.

Despite their bleak financial status, MultiChoice remains positive of a turnaround.

French broadcasting company Canal+ owns 45% of MultiChoice and has already invested almost R25 billion.

Because of these hefty investments, there are talks that Canal+ will take over MultiChoice and all its brands to save them. 

Should the acquisition happen, the merged company will have 50 million subscribers (30 million in Africa), making it the biggest entertainment company in the world that's not American.

The merger of Canal+ and MultiChoice is expected to help save billions in costs as technology spending and content production will be combined.

Canal+ CEO Maxime Saada says he wants to build one of the top five largest entertainment groups in the world after taking over MultiChoice.

"I am curious with the acquisition by Canal+... what is it going to look like? It seems inevitable... it seems like it's on the cards, but they are working out legal details around a foreign company's ownership of a South African broadcaster."

- Barbara Friedman

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