MultiChoice writes down $108 million on its investment in betting company KingMakers

MultiChoice writes down $108 million on its investment in betting company KingMakers

Thus far, MultiChoice has lost R1.3 billion (~$108 million) in acquiring a 49% stake in Nigerian sports betting company KingMakers in three years. Can the company manage to turn its gamble on KingMakers around?

MultiChoice, a pan-African broadcaster, has incurred losses of R1.3 billion (approximately $108 million) in its investment in Nigerian sports betting company KingMakers over a three-year period. MultiChoice initially acquired a 20% stake for R1.9 billion in 2020 and increased its stake to 49% for $281.5 million in 2021, valuing its total investment at R5.9 billion. Due to factors like naira devaluation and expansion costs, MultiChoice has written down R2 billion ($108 million) on its KingMakers investment, reducing its stake's value to R4.6 billion ($248 million).

The KingMakers investment was intended to leverage MultiChoice's sports coverage and tap into the growing sports betting market in Africa. Despite optimistic growth projections and Africa's potential, KingMakers' expansion plans into Kenya and Ethiopia faced setbacks, and the company has seen rising revenues accompanied by substantial losses.

The article highlights that further losses could impact MultiChoice's financial position and shareholder sentiment. While there is potential for recovery, analysts suggest MultiChoice might need to play a more active role in KingMakers' operations and improve management to salvage the investment.

The fate of the investment hinges on how MultiChoice addresses operational challenges and competes in the saturated sports betting market. The company's presence across Africa provides an advantage, but it needs to present a compelling case beyond brand recognition to succeed in this competitive landscape.

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