France’s Canal+ Group wants to remove over R7.5 billion (€400 million) in costs annually from the newly acquired MultiChoice unit by FY30 (early 2030).
While this may seem a tall order, it really isn’t for a business that had expenses of R46.7 billion in its 2025 financial year and that has been known by industry insiders to have become somewhat bloated and inefficient in recent years, despite various rounds of restructuring.
Last year, MultiChoice spent R20.4 billion on content (directly) on subscription revenue of R40.2 billion.
In a presentation to debt investors in late 2025, Canal+ was already clear that this is where a large amount of the so-called ‘synergies’ lay.
It identified nine areas of “high synergy potential”, with content – entertainment, sport and own content production – among the top four.
Canal+ already got its way with the renewal of the Warner Bros Discovery carriage agreement at the 11th hour in late December.
In calling the US cable operator and studio’s bluff, it secured a new multi-year and multi-territory agreement. This was the whole point of the group’s calculated gamble.
Importantly, it said the new “expanded agreement covers both the distribution of HBO Max and the renewal of several Warner Bros Discovery thematic channels across Africa and Europe”.
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In the most recent presentation to investors, Canal+ says one of the four major cost synergies “delivered since day one” is the euphemistically categorised “new content partnerships”.
With the additional scale, Canal+ was able to secure a far better deal for its European and African operations as well as MultiChoice. This is the playbook. It is going to follow this in every renegotiation of carriage rights and sports rights going forward.
Sport
With sports, there’s a two-pronged approach.
On so-called “major sporting events” for such as the Uefa Champions League, Premier League, F1, MotoGP and golf (the latter two are probably important mainly for the French pay TV operator), it is going to seek to combine its efforts for a sub-Saharan African offer and bid a more ‘modest’ amount for rights.
After all, with all the markets wrapped up in a single group, there is only a single natural buyer for these rights.
Mobile operators are not about to get involved in this melee again and because of their lack of scale in Africa, the so-called over-the-top providers like Netflix and Prime Video cannot reasonably be credible bidders.
The ‘unnecessary’
The second part of this plan is to cut what the French would deem “unnecessary” rights. There is a reason why the Winter Olympics aren’t televised on SuperSport at present.
It will cut many, many more of these ‘fringe’ events, sports and tournaments in the years to come.
There are strong murmurs that the current Super Rugby Pacific broadcast deal which concludes next season will not be renewed.
Despite the pleas and ‘threats’ of cancellations of a few on social media, the reality is there really aren’t that many viewers of this content. What could the viewership of a Super Rugby encounter on a Saturday morning at 9am actually be? A few thousand? That many?
The tap of seemingly never-ending funding for content for streaming service Showmax is being wound shut very quickly.
In the year to 31 March 2025, Showmax reported subscription fees of R750 million. That’s not an awful lot of money, considering the billions the group has pumped into the reboot of the platform alongside Comcast, Universal and Sky.
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Entertainment content will also suffer as the group continues to prune its offering to its content matrix which is modelled against different categories of content and different types of subscribers.
It expects more than half of these renegotiations for sport and general entertainment to be complete by FY28 with it substantially complete by FY30. On its own, commissioned content will be mostly “rationalised” by FY28. That solves most of the problem.
Expect more ‘synergies’
However, there are a lot more “synergies” to be found in the coming years, including across procurement, sales, distribution and marketing, advertising sales, IT, satellites as well as OTT technology.
The renegotiation of hardware (decoder) prices is all but done, with savings already being passed on to customers as the deal closed.
By FY28, the “convergence of broadcast infrastructure” will be done. This effectively relates to transponder leases which it will be able to negotiate very hard on as, again, it is one of very few customers in sub-Saharan Africa.
It has refinanced MultiChoice’s long-term debt (an easy win) and says the “scaling of procurement best practices” is progressing well.
Along with this, it sees the reduction of structural support costs mostly complete by FY28 and the rationalisation of brand and marketing only done by FY30.
Canal+ told investors in late January that it had already secured R1.5 billion (or €80 million) in free cash flow synergies for the current year.
This article was republished from Moneyweb. Read the original here.
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