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South African horseracing television’s leading service provider Discover Digital has responded to a City Press article published online on 10 February 2024, regarding the company’s contractual agreement with the SABC for the provision of services for SABCPlus.

It was reported late last week that the SABC’s COO Ian Plaatjes and head of video entertainment Merlin Naicker had been suspended, while the public broadcaster’s ad sales boss Peginald Nxumalo resigned when he heard about his impending suspension, following their apparent failure to disclose a 7.5% profit-share deal with Discover Digital that runs the broadcaster’s SABC+ video streaming service.

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MyBroadband contacted Discover Digital managing director Stephen Watson to hear his company’s side of the story, and he provided the following statement:

It is deeply disappointing that City Press failed to approach us for comment prior to publishing its article.

All Discover Digital’s Advertising Video on Demand and Adserver service contracts — including its contract with the SABC — contain an advertising revenue share clause.

This is to cover the associated technology, resource and delivery costs.

The revenue share clause had also already been included in the contract wording at the preceding stage, when TelkomOne had been awarded the contract.

Post launching the SABCPlus service, [the decision-maker] alerted us to their omission of these costs in their internal business plan submission and accordingly that the plan had to be corrected to specifically reference these costs, and for the updated plan to be resubmitted to the SABC’s Executive Committee and Board of Directors for approval.

Discover Digital decided not to bill the SABC for its part of the agreed revenue share until such time as the business plan had been corrected and internally approved by the SABC.

By the time the one-year term of our agreement with the SABC had matured in November 2023, the proposed approval and ratification of the revenue share clause had not yet occurred.

Over this period the SABC for several months had been without a Board of Directors.

Accordingly, Discover Digital did not bill for, nor did it receive any funds from the SABC pursuant to the revenue share clause.

Discover Digital is willing to co-operate in any SABC investigation into the issue, whether through Werksmans Attorneys, the SABC’s own internal audit team or the Auditor-General.

To date, however, we have not received any enquiry or request for comment or to supply supporting documentation.