CAF bitter over loss of N1.2bn Nigeria revenue

The Confederation of African Football (CAF) is bitter about Nigeria’s refusal to stay away from the coverage of the ongoing African Cup of Nations in South Africa. The Broadcasting Corporation of Nigeria (BON) had contested a €4.5 million bill for broadcast rights  levied by LC2, the licensed agent for the broadcast of the sporting event.

Apparently irked by  the €4.5 million ( N1.24 billion) revenue loss, CAF is blaming Nigeria for bungling its broadcast rights deal in the  ongoing sporting event. CAF is also accusing the country of purchasing English and European football packages at high prices, instead of supporting the African game and business.

It added that the African regional sporting event cannot survive if it does not sustain minimum value for television rights.

Apart from CAF, other bodies that have lost revenue or credit, as a result of the face-off, include broadcasting houses, advertising agencies, as well as advertisers, who lost the opportunity to strengthen their brand equity on the back of the sporting event.

The losses would sum up to several millions of dollars, experts say.

In absence of the broadcast of the matches on terrestrial stations in Nigeria, DSTV however filled the gap by providing a viewing opportunity for many Nigerians.

Some industry watchers say that the platform provided by the South African owned DSTV helped to douse the agitation which might have pressured the Federal Government to pay the huge broadcast rights bill.

Other industry watchers also point out that in the process, DSTV reaped huge revenues , as more Nigerians paid their cable TV subscription with a view to being able to watch the event

According to reports, Hicham El Amrani, CAF Secretary General, said in South Africa, that “Nigeria proposed a small bid for the continent’s top competition, when the country spends so much in getting English and European football rights.

“We cannot sell to someone who wants to buy at 20 times less than the usual price, we cannot do this, otherwise we will have to close our doors. We cannot survive if we do not sustain the minimum value of our television rights,” he said.

Nigerians are however vexed about the issue, given that the country was asked to pay about three times what other nations must have paid. It was alleged that Ghana paid €500,000, Cameroun €1.2 million Euros and South Africa, the biggest economy in terms of GDP, €3 million.

 

The refusal of Nigeria however, may have cost local media houses loss of advert revenues, since advertisers were not able to reach their customers in absence of the broadcast.

A source in BON, the umbrella body of all broadcasters in Nigeria, who estimated that CAF might have made some financial losses, told BusinessDay that because of Nigeria’s rejection of the broadcast deal, CAF is going to  re-assess broadcast rights packaging and costing for the event in the future.

“CAF has to sit down and re-arrange the whole set up. Broadcast rights must be looked at after this competition. CAF is realising that it has made a blunder. Everybody assumed that for Nigeria, it would have been business as usual, but they have realised that the game has changed. Nigeria has always been charged exorbitantly for the TV rights,” he said, adding that Nigeria has been milked for too long. 

Information Minister, Labaran Maku, who also looked at the CAF charges for the broadcast rights, said in a report that Nigeria would no longer concede to the highly exploitative fees asked by foreign agents in the name of broadcasting rights.

“Agents have turned Nigeria into a cash cow.  If they go to take licence from CAF to sell the rights to various broadcasting stations in Africa, so when it comes to Nigeria, they will triple or quadruple the cost when it comes to asking our broadcast houses to air”, he said.

He said though negotiation for broadcast rights was purely a private commercial arrangement, the Federal Government intervened in the deadlock between BON and the license agent, LC2 because of the sensitivity of the matter, but that the agent refused to reduce the licence fee and BON decided to call the bluff.

“We even asked the President to intervene to ensure that people watch it through terrestrial television.  Even when the Federal Government intervened, the agent said they could not move down from the highly exploitative price tag”, he said.

The minister recalled that in the past, some television stations paid huge sums of money to secure rights to broadcast some championships, but they recorded huge losses because the fees were very high.

Maku further said that the position of BON was reinforced by the fact that the ongoing championship was branded by a telecom company, and Nigerian telecom companies would not pay a huge cost for advertisement on a branded competition by a competitor in the same industry.

He assured that the federal ministries of information and that of sports, as well as BON, would meet to agree on a new formula for the fees of broadcasting rights, especially towards to 2014 World Cup, to ensure that Nigeria is not short changed.

Also assessing the situation, Francis Ikedia,  BON’s consultant, said “first of all the bidding has to be open. When it is open it has to be competitive and broadcasters who transmit must have better deals, meaning you don’t have the Cup of Nations where somebody has the sole right. This is not ideal”.

Asked whether Nigeria was asked to pay the huge sum because of  the country’s large population, Ikedia said the sum asked did not make economic sense. We are a 160 million population country but our spending power is less than the big economies. 

Ikedia, who said that the negotiation started from above eight million Euros, explained that  “BON members are all the owners of TV and radio broadcast stations who will actually do the transmissions and they are actually the ones that will bring out the money to make the payment. It is not really a government thing. It is supposed to be between broadcasters and the owners of the rights.

BON had negotiated to pay about half  of what the marketers of the African 2013 Cup of Nations  were asking,  but the African Federation body and its marketers refused, describing the offer as  “a small bid for the continent’s top competition”.

Meanwhile, Nigeria’s representative at the tournament has qualified for the finals and president and CEO of  Dangote Group, Aliko Dangote has flashed N130 million on the Eagles.