Canal+’s Vietnam venture at risk of huge losses

In a recent document sent to the Ministry of Information and Communications, Le Chi Cong, general director of VSTV, which owns the brand K+, said when comparing among three case scenarios, namely “having the EPL”, “having the non-exclusive rights to broadcast the EPL” and “not having the EPL at all”, the company concluded that “without the EPL, VSTV would have more severe losses,” because its other contents cannot compete with those of other companies which have been operating for more than 20 years and other telecom companies with strong finance and a big user base.

The document was sent in the context that K+ has just announced its breaking away from an agreement signed with the Vietnam Pay Television Association (VNPayTV) that prevented it from individually negotiating to buy the rights to broadcast the EPL.

At the end of 2015, the Ministry of Information and Communications asked all Vietnamese companies not to buy the rights to broadcast the EPL at all cost “because that would be a waste.” They have to cooperate to buy and then share instead of individually negotiating. 10 companies including K+ then signed the agreement to not negotiate alone and to not buy if the price exceeds that of the last three seasons by more than 20 per cent, and to create a negotiation committee represented by VNPayTV.

VNPayTV then told MP&Silva, the owner of the rights, that it would not buy if the price exceeds that of the last three seasons by more than 20 per cent, and that it would buy all games, and the rights will be shared among all the Vietnamese broadcasters. It also asked MP&Silva to reply by April 15 this year or else the EPL will not be broadcasted in Vietnam. MP&Silva in turn said the organisers of the league did not accept this kind of collective buying. There has never been a case like this in world history.

Canal+ earlier spent $40 million so that K+ had the exclusive rights to broadcast the EPL in the 2013-2016 period. Cong said that K+ only had the exclusive broadcasting rights for “100 of the 380 games.” The rights to exclusively broadcast the EPL is considered the biggest competitive edge of K+ compared to other pay TV operators in Vietnam.

Established in May 2009, VSTV is a joint venture between state-owned broadcaster VTV and CANAL/Canal+ Overseas, the foreign distribution arm of Canal+ Group. Last June, the company reported that it finally broke even after six years of operating in Vietnam.