Beta Television Limited has threatened to walk out of the K266 million television broadcasting rights deal with Super League of Malawi (Sulom) if clubs continue to protest against the broadcaster’s delay to issue first payment.
The television station outbid Times TV and MTV to claim the broadcasting rights,the first deal of its kind for the top flight league. According to the agreement, Beta was supposed to pay K40 million last season for Sulom and clubs to share.
But following delays in issuing the payment, some clubs in a series of interviews with Nation on Sunday issued fresh calls for Sulom to terminate the contract because they are not benefiting.
Silver Strikers general secretary Thabo Chakaka- Nyirenda said: “If Beta has failed to issue a fraction of the whole payment, why should we believe there is a chance for the whole money to be paid with two years remaining on the deal? The best way is to terminate the agreement.”
Apart from the lack of payment, Epac general secretary Chiyamiko Lita observed that “Beta has proven that it doesn’t have the capacity to beam a national league. The evidence is that they only show Blantyre games. This deal is a nonstarter.”
Azam Tigers chairperson Sydney Chikoti was also of the view that the contract should be terminated: “This is a bad deal and it is important that we cancel it instead of waiting until things get worse.”
But reacting to the calls, Beta TV station manager Theuns Bester warned that they might walk out of the deal if the threats, which he said, are jeopardising their chances of striking advertising deals, persist.
He disclosed that they are negotiating partnership agreements with, among other firms, globally known sports channel SuperSport to beam their Super League programmes.
“The K40 million that we committed (to pay clubs) for the 2016 season cannot go away, it is due, but we need now to successfully conclude all these deals…and should we continue to lose potential sponsors due to continued threats from the clubs, unfortunately we will have to walk away from this contract, as we cannot afford to run another season at such an enormous financial loss,” he said.
Bester admitted that they do not have funds to pay last season’s arrears, saying they had invested much of their resources in equipment and training of personnel.
In an e-mailed response to a questionnaire, he attributed their financial situation to Sulom’s delay to award them the contract.
“Because of the very late start of the 2016 season broadcasts, we missed the opportunity to engage sponsors and advertisers for the 2016 season, as most companies have by that time, July 2017, spent or committed their advertising budgets to specific campaigns.
“Now to explain further the challenges we ended up facing as a result of this, our tender amount, as well as our production costs was going to be financed by a capital investment from Beta TV shareholders to the amount of about K200 million,” he said.
Quizzed when Beta would issue the K40 million payment, Bester was not specific: “This is entirely up to the success of our current marketing campaign during the next two months in which we are involved with various sponsors, and potential advertisers for the new season.”
Meanwhile, Be Forward Wanderers vice-chairperson Gift Mkandawire while joining calls for the deal’s cancellation, accused Sulom of having “too much trust in Beta TV.”
“If Sulom anticipated this situation it could have demanded a collateral from Beta before the deal was sealed. This does not appear anywhere in the contract. This was a big mistake because if they fail to pay we will lose out,” he said.
But Sulom treasurer Tiya Somba-Banda argued that a thorough analysis of Beta and other bidders’ financial standings was done before the deal was struck.
“A due d i l i g en ce analysis of the bidders was conducted which included examining the financial proposals in line with the financial statements that were provided.”
Meanwhile, the treasurer has said it is too early to start calling for the contract termination.
“As it is with any business contract there are processes to remedy contractual breaches with contract, termination as a final course. Therefore, it is unprocedural to jump to the final end before the other avenues are exhausted,” he said.
Somba-Banda also gave a break down of the K40 million sharing: “As per our agreement with the clubs, from the K40 million, the 16 clubs will share K32 million while K8 million will go to Sulom. From the club’s allocation, K16 million will be shared equally (K1 million per club) and the remaining K16 million will be shared according to the final position of the 2016 log table.”