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PayTV service in Nigeria and the issue with broadcast content

Alhaji Lai Mohammed, Minister of Information and Culture

By Mohammed Bashir

The 8 June, 2021 judgment of the Port Harcourt Division of the Federal High Court presided over by the Honourable Justice Adamu Turaki Mohammed, will stand out as the last straw that will break the backbone of predatory practices  in the African pay Tv industry, throw a big spanner at the monumental corruption in the industry and lead Nigerian Federal investigators recovering billions of Dollars the Nigerian economy may have lost to round tripping over the past thirty years of multichoice’s operations in Nigeria. 

A Port Harcourt based Pay Tv operator, Metro Digital Limited had approached the Federal High court after MultiChoice had rejected their request for the sub licensing rights to some of its rebroadcast channels as required by NBC broadcast code. Not satisfied with Multichoice’s reason for the rejection, the local pay Tv company approached the court of law for redress.

Nigerian NBC code specifically prohibits the bidding for sports broadcast rights meant for the Nigeria territory by entity domiciled in another jurisdiction. But in a surprised confession, Multichoice Nigeria admitted that Broadcast rights for the Nigerian territory for content they broadcast in Nigeria are the exclusive preserve of their off shore company which in turn resells those rights to Multichoice Nigeria on an EXCLUSIVE basis.

In court depositions made under oath, Multi choice Nigeria claimed that channels for which Metro Digital Limited sought sub-licensing rights are not owned by MultiChoice Nigeria, implying that it (Multichoice Nigeria) uses an entity outside Nigerian jurisdiction to acquire content for Nigeria, their biggest market in Africa, and in turn resells same to Nigeria MultiChoice, a practice known in the industry as round tripping with possibility for over invoicing, tax evasion and money laundering.

In a landmark ruling, the court held that since Multi choice Nigeria by their own admission owns no rights to the events they broadcast in Nigeria and as Metro Digital failed to provide evidence before the court to the contrary, Multichoice Nigeria cannot be compelled to give out what it does not have.

This ruling reminds one of the age long tussle between the Association of Cable Operators of Nigeria (ACON) representing the Nigerian local PayTV operators and Multichoice over sub-licensing of rebroadcast rights which has been the subject f a subsisting civil matter before a federal high court Lagos division. 

Analysts believe that Nigerian investigators will be keen to know if money laundering is at the root of MultiChoice reckless contempt for Nigerian law, the most powerful African Nation or a predatory practice designed to deny their competitors sub licensing rights or both. According to Section 6.2.8 of NBC code:

“In the broad national interest, exclusivity of sporting rights in Nigeria is prohibited. For the avoidance of doubt, exclusivity shall not be allowed for sporting rights in the Nigeria territory and in furtherance thereof, no broadcasters or licencee shall licence or acquire foreign sporting rights in such a manner as to exclude persons, broadcasters or licencees in Nigeria from sublicencing the same”.    

The code further provides that, “In the event a broadcaster acquires exclusive Sport rights for a live sporting event for the Nigeria territory, from a content owner that does not take into consideration the available broadcast platforms in Nigeria, such a right would be made available to broadcasters on other platforms at commercially agreeable terms”.

Whatever is the motivation, the 8 June, 2021 landmark judgment of the Port Harcourt Division of the Federal High Court has forever changed the face of Pay Tv in Nigeria and the rest of Africa as other African countries look up to Nigeria to free them from a monopolist that has consistently consumed their competitors for almost 30 years.

An interesting twist to the ruling is that after the Federal High Court delivered the judgement, Multichoice’s lawyers, C.O. Toyin & Co. wrote to  Metrodigital Ltd informing the Company that their Client, Multichoice is the exclusive licencee of Supersports in Nigeria which is at variance to what Multichoice deposed to in their affidavit in Court.

It is recalled that only recently, the Federal Inland Revenue Service (FIRS) issued a statement directing some commercial banks as agents to recover the sum of N1.8 trillion from accounts of Messrs MultiChoice Nigeria Limited (MCN) And MultiChoice Africa (MCA) in what some commentators have described as tax fraud.

The FIRS statement further stated that “the decision to appoint the banks as agents and to freeze the accounts was as a result of the group’s continued refusal to grant FIRS access to its servers for audit. It was discovered that the companies persistently breached all agreements and undertakings with the Service, they would not promptly respond to correspondences, they lacked data integrity and are not transparent as they continually deny FIRS access to their records. Particularly, MCN has avoided giving the FIRS accurate information on the number of its subscribers and income. The companies are involved in the under-remittance of taxes which necessitated a critical review of the tax-compliance level of the company”.

The statement added that “the group’s performance does not reflect in its tax obligations and compliance level in Nigeria. The level of non-compliance by Multi-Choice Africa (MCA), the parent Company of Multi-Choice Nigeria (MCN) is very alarming. The parent company, which provides services to MCN has never paid Value Added Tax (VAT) since its inception”.

Not long ago, the House of Representatives called on the Federal Government to as a matter of urgency expedite action on implementing the content of the National Broadcasting Code and the Nigeria information Policy of 2014.

The House noted that this would trigger healthy competition in the industry, adding that the entertainment industry had a wider spectrum with limitless job and wealth creation opportunities for the teeming youths.

The House stated that the visible absence of competitors in the industry was tacit approval of monopoly by the present operators. The House suggested that timely application of government regulatory intervention measures already articulated would revolutionise the industry and meet the people’s yearnings for Pay-as-you-go, Pay-Per-View and price reduction.
The House of Representatives had adopted pay-as-you-go and a price slash for DSTV and other cable satellite operators in the country.

The House considered and approved recommendations of the Ad–hoc Committee on Non–Implementation of Pay–As–You–Go and sudden Increment of Tariffs plan by Broadcast Digital Satellite Service Providers.

It will be interesting to see how Federal investigators of Africa’s most powerful nation will handle the matter of Multichoice consistent disrespect of Nigerian laws.

It is only time that will tell.

Mohammed Bashir is a Satellite TV expert based in Jos.

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