Saturday, January 31, 2009

GTV Wounds Up

Gateway Broadcast Services, the fledgling satcaster that threatened to challenge the dominance of Multichoice in the African market, has closed its operations blaming economic conditions.

In perhaps the starkest reminder that the global economic meltdown is no phantom, GTV revealed it had invested $200m (about sh390b) in the business, but blamed “the current financial and global crisis that has caused excessive demands on the business,” for its demise. 

“Increased instability in global markets interrupted our ability to secure funding and left us no choice but to cease operations,” said a company spokesman. 

“We have tried every possible step but we are all unfortunate victims of the global economic crisis.” 

Stunned subscribers received only a short message telling them the channel had gone off the air. 
The defunct company supplied programmes to countries from Kenya to Botswana. 

Fans who had hitherto watched the English Premier League on the station will have to find another source of information this weekend, and in the future. 

But it won’t be only the subscribers counting the cost. 
Several African football federations and leagues will suffer the domino effect. 

GTV backed several domestic leagues, including Uganda, Ghana and Tanzania. The pay TV had undertaken to back the local Ugandan league to the tune of $500,000 (about 985m) a year for the coming five years. 

GTV had also just recently penned a $4m four-year sponsorship deal for the regional CECAFA Cup. 

According to the statement, the company had fruitlessly explored multiple ways of mobilising finance but that all had ended in frustration and failure.

“In determining to approve the company's plan of liquidation, the board and management carefully reviewed the advice its consultants,” the statement said, adding that, “The economic crisis that has emerged globally over the last few months has caused excessive demands on the business.”

The Africa-wide GTV service has an estimated 100,000 subscribers across Africa and has over the last two years invested a total of $200 million. Although the company didn’t indicate what it would do with its assets, newswire reports said GTV had in fact sold to Canal Plus, a subsidiary of the French media behemoth, Vivendi for $23.6 million.

According to a Bloomberg report, GTV needed 400,000 subscribers to breakeven, which is far too above its current number of customers. GTV has fought a fierce turf battle with DSTV across sub Saharan Africa but the latter has lately appeared to prevail, boasting of a subscriber based of three million. 

An official however, said that the deal with Canal Plus failed to materialise.

“That was the last straw. Canal Plus withdrew from the deal last week and that is what broke us down,” he said, adding, “I feel very said about it. I feel like somebody has died.”

He also said he does not know if there would be continuity with the programmes through an alternative service provider. GTV had 80 per cent broadcast rights of the English Premier League. South African-based Multichoice DsTV broadcasts 20 per cent of the English Premier League. It’s local franchise was non committal when contacted for comment.

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