MultiChoice buys 20% in Betking for $81 million, valuing the company in excess of $400 million. Essentially, MultiChoice does not just want to live on European soccer rights which keep rising on aggregate price, affecting margins in a continent where consumers are discovering alternative ways to be entertained.
So, provided you call it entertainment – watching Ronaldo and Messi or playing and betting their avatars – money can be made. With BetKing, MultiChoice thinks there is an opportunity to ramp up revenue from this exploding sector in Africa, and it could do that without relying on the capacity to ship more money to hold football rights in European capitals.
MultiChoice, Africa’s biggest pay-TV operator, has acquired a 20% stake in BetKing, a pan-African sports betting group.
As part of the deal, MultiChoice has made an upfront investment of $81 million
(R1.3 billion), with the potential for a further payment of $31 million (R500 million) should certain earn-out targets be met between December 2021 and December 2023.
As the group exercises significant influence over BetKing, the business will be equity accounted as an associate from 1 October 2020 by MultiChoice.
Now that MultiChoice has moved into betting, expect major regulations to begin to emerge in this domain. Why? It is easier to attack a visible enemy than these digital startups no one knows where they operate from. I am not sure BetKing may like what would come, in near future, but of course that is a good problem to have when you can cash $81 million.
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