Time Warner Group Wins S. Africa License

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Johannesburg, South Africa -- The Independent Broadcasting
Authority (IBA) last week awarded the country's first commercial broadcast-television
license to Midi Television, a joint venture between South African labor-based
organizations and Time Warner Inc. of the United States.

Capturing the eight-year license in one of the last
untapped English-language TV markets is a significant achievement for Time Warner, which
has a 20 percent stake in the venture -- the maximum allowed to a foreign partner. Its CNN
unit will also benefit by extension, since the channel will provide programming for the
foreign news requirement on the new channel.

The new channel will compete with the South African
Broadcasting Corp.'s three broadcast channels, the M-Net pay TV service and the many
Multichoice satellite channels.

Midi was one of seven bidders vying for the license. The
field included several international players that had teamed up with South African
companies to bid. The contenders included Free to Air, which partnered with News
Corp.'s Fox Sports; Afrimedia; Station for the Nation, which had Kerry Packer's
Nine Network International on board; Island Television and Swedish partner Modern Times
Group; Community Television Network; and New Channel TV, which had teamed up with
France's TF1.

Hearings into the awarding of the new license began two
months ago, with the field of serious contenders narrowed down to five over the last
month, according to media analysts.

But the tender was expected to be a close contest between
Station for the Nation -- the bid put together by Thebe Investments, a local black-owned
company -- and Free to Air, which included Primedia, one of South Africa's biggest
media groups.

Some of the criteria used by the IBA to make its decision
included financial viability, skills transfer and the degree of control the investors
would provide to South Africa's previously disadvantaged communities. The authority
had also laid down strict operating parameters for the new channel, including a local
content quota of 20 percent by the third year of operation.

Analysts said they were surprised by the decision, noting
that if it had been made in terms of the best all around bid, the new terrestrial license
would have gone to Free to Air. But Midi's trade-union shareholding put it in a
strong position to draw the politically correct vote.

It is unclear at this stage whether the losing bidders will
take the matter to court. If they do, the IBA could be forced to repeat the entire bidding
process.

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