Palace coup at KBC over $1.3m World Cup deal

A dispute over the circumstances under which the Kenya Broadcasting Corporation (KBC), the public broadcaster, exclusively sub-contracted World Cup television rights to Radio Africa Ltd, has exposed the hostile tactics and backroom dealings prevalent in the country’s broadcasting industry.

With 32 teams from around the world meeting in South Africa to battle over the biggest sporting event, broadcasters were eagerly expecting the World Cup to provide them a welcome increase in viewership, listenership and advertising

The snag, however, was that the cost of acquiring World Cup rights had soared phenomenally.

Indeed, in many countries, it was almost taken for granted that the World Cup was going to be viewed only on public broadcasting or Pay-TV.

In Kenya, according to documents seen by The EastAfrican, KBC paid a fee of $700,000 for the rights towards the end of last year.

With the public broadcaster having taken the lead, expectations within the broadcasting industry were that KBC would come up with a formula for sharing both the cost of acquiring the rights and the advertising revenues without locking out any interested broadcaster.

As it turned out, what was expected did not happen.

Instead, the scramble for World Cup rights evolved into an intriguing game of vicious manoeuvring and under-hand dealings, all of which resulted in last week’s removal from office of KBC’s chief executive, David Waweru, and the corporation’s legal secretary, Hezekia Oira.

KBC quietly negotiated an exclusive deal with Radio Africa — owned by prominent media entreprenuer Patrick Quarrco.

According to the correspondence, the deal was initiated by a letter by Mr Waweru dated November 6, 2009, to Mr Quarrco refering to his “expression to partner with KBC in broadcasting the World Cup” and informing him that the corporation had accepted his proposal.

Five days later, Radio Africa formally accepted, paving the way for the signing of the agreement.

That agreement, consumated through a four-page and casually drafted document, titled “Memorandum of Understanding between Kenya Broadcasting Corporation and Radio Africa Ltd’ was signed on December, 23, 2009.

How KBC — a public entity subject to public procurement rules — came to grant an exclusive deal to Radio Africa without subjecting the World Cup rights to competitive bidding, is one of the most intriguing asides to the saga.

The details of that agreement included the following: First, Radio Africa was to pay KBC 50 per cent of the total costs of the rights.

Secondly, it was agreed that the revenues accruing from the “exploitation of the football tournaments” (sic) less VAT and agency commissions, shall be set between the parties on a 60:40 basis, with KBC taking the larger share while royalty would be shared on a 50:50 basis.