Kwese is reportedly failing to honor its financial obligations to its partners for the media rights of the upcoming 2018 World Cup, UEFA Euro 2020, European qualifiers and the Nations League. This is according to a report by media rights lister, TV Sports Markets.
The pay-television company has been on a drive to dethrone DSTV as Africa’s leading media content provider. Last year it even competed with Multichoice, DSTV’s parent company for the 2018 World Cup broadcasting rights but ultimately they both won the rights.
The TV Sports Markets’ report went on to list National Basketball Association (NBA) and ESPN as other rights holders to whom Kwese TV owes financial obligations.
This setback can be attributed to Kwese’ massive expansion in many areas ranging from sports content to movie content that is consuming and stretching its financial resources. Consequently, breeding unexpected cashflow problems.
Joseph Hundah, Econet Media Chief Executive confirmed this by stating that Kwese’s portfolio of sports rights had “required more investment than initially forecast”.
Apart from investors funds, Kwese has still relatively few subscribers to generate enough revenue to self-fund it’s expansion activities since it was introduced two years ago. Kwesé is thought to have 120,000 subscribers across the 13 territories in sub-Saharan Africa in which it currently operates.
One source quoted in the report said this year Kwese has already missed payment deadlines in January, February and March. So now the rights holders are waiting for payment by the end of April in line with Kwese’s promise.
But there is a glimmer of hope for Kwese because its partners seem to be responding favorably to its situation. And it seems like this time it will eventually pay its dues. Hundah says:
To ensure transparency during this process we have been in continuous communication with our partners who remain extremely supportive and have shown great belief in our business…..We do believe the money will come through