Concerns over Canal+ and Multichoice merger: impact on local content producers
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Local content producers and actors are concerned that the French Television Giant Canal+'s acquisition of Multichoice may lead to fewer local productions and could lead to an increase in unemployment for those working in the entertainment industry, especially those dependent on commissions from Multichoice.
The Competition Commission Tribunal hearing this week, focused on public interest clauses of the merger, especially around commitments to support local content creators and historically disadvantaged persons (HDPs).
Regulators and commissioners sought to understand how local content creators and HPDs will be supported under the merged entity.
Canal+ and MultiChoice had committed to obligations to continue procuring goods and services from a diverse group of beneficiaries, including HDP firms, small and medium enterprises (SMMEs), and South African content creators.
Concerns were raised during Thursday's hearing on whether the wording under Clause 7 of the merger conditions was explicit enough to assure beneficiaries—particularly local content producers—that they are covered under the commitments.
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The Competition Tribunal panel also queried Canal+ and Multichoice on the basis for monetary commitments related to local content procurement and HDP participation.
However, specific amounts set for this by the merging parties remain confidential, although they explained that these figures were derived from historical and projected expenditure data covering a three-year period.
They said they had made financial commitments to reflect average spend based on past and future spending to ensure that support for local content and HDP firms is maintained—not diminished—after the merger.
'To be clear, these are not additional or new commitments—they are meant to safeguard ongoing procurement activity, especially given that there was no certainty these would continue if the merger didn't proceed,' explained the merging parties.'
These commitments are part of a broader set of public interest conditions tied to the merger, designed to ensure that local economic development, transformation, and content diversity are not compromised by foreign control of one of Africa's largest media platforms.
However Jack Devnarain, veteran actor and chairperson of the South African Guild of Actors, said they didn't have any expectations of Canal+ which was here to 'play the game' in an unregulated industry, which he believes was a 'huge attraction' for them.
'From the actor's point of view, we are always suspicious of mergers such as this because typically, given that we are in an unregulated industry, it means that actors are the last to get any benefit whatsoever from the transaction.
'We are the last to have our rights protected in any way, and we are deeply concerned that while all this content is going to find a new home, that actors are going to be left without new opportunities for work.'
Devnarain said that Ideally they would like to engage with Canal+ on various issues like a new contractual agreement in which they can secure commercial exploitation fees in contract, and even if old content is re-versioned and dubbed, that actors will receive some residual income.
'We're not optimistic about that at all, simply because we know Africa, African content, African filmmakers and broadcasters are typically the ones to be exploited when it comes to the arrival of the European or American broadcasters or streamers.
The Global North has always sought opportunities to exploit the content opportunities emanating from the Global South and Africa has always been ripe because we are incredibly diverse in our linguistic content, in the cultural content and in the incredible locations that we have.'
Devnarain described it as a new form of colonisation where international conglomerates and corporate players from the Global North find wonderful opportunities in the Global South, and again exploit the talent that comes out of South Africa and Africa, without compensating them.
The merger between Multichoice and Canal+ will be subject to a restructuring exercise under to ring-fence MultiChoice's licensed broadcasting entity, MultiChoice (Pty) Ltd. This unit will be hived off into a standalone company, LicenseCo in line with local regulatory requirements.
After settlement of the merger, the combined group will have no interest or control in LicenseCo. However, details of the this carve-out structure for LicenseCo remain confidential.
LicenceCo will be majority-owned by previously disadvantaged and black economic empowerment companies, with MultiChoice Group holding a 49% interest. Canal+ has however previously said that it was still engaging with Phuthima Nathi which has been earmarked to hold a 27% interest in LicenceCo although the board has already given its support for the transaction.
Black-owned and managed companies, Identity Partners Itai Consortium and Afrifund Consortium, have also been roped into LicenceCo, bringing 'highly experienced leaders' with 'great commercial and industry' knowledge.
Regulators are expected to consider these clarifications as they finalize their decision on whether the merger may proceed under South Africa's competition and public interest laws. The merger awaits final regulatory and competition approvals.
Denvnarain said they are concerned that work that was already produced would be dubbed and sold to new markets and the actors not compensated for it.
'Because those rights didn't exist under the MNet or KYKNet agreements, we don't expect that Canal+ is going to come into South Africa and acknowledge rights that our own South African broadcaster refused to give us. So, we don't see the upside as actors unless we are creating new content for the new owners under a new contractual regime where we are able to secure commercial exploitation rights.
'And again, it's unheard of to secure commercial exploitation rights in a contract if your industry itself is an unregulated industry.'
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