Tired of playing catch-up with other sectors on the empowerment front, the media sector increased BEE activity - slightly. Once again it was Naspers and Primedia who ventured into the BEE arena, causing a stir.
Naspers got the ball rolling with what it called a broad-based strategy, but which might also be seen as a rather retail approach - selling hugely discounted shares to previously disadvantaged people in some of its operations.
In two separate, but similar transactions, Naspers sold 15% in each of its operating companies - MultiChoice SA and Media 24 - for R2,25bn and R730m respectively.
MultiChoice SA offers pay TV services while Media 24 houses Naspers's print interests.
The transaction therefore gives investors exposure to some of the most cash-generative assets in the African media sector.
Media24 issued 14,6m ordinary shares at R50 each for a new company called Welkom Yizani, which would sell the same number of shares at R10 each to the public, and 58,4m preference shares to Naspers at R10 each to fund 80% of the deal.
MultiChoice SA would set aside 45m of its shares in a similar fashion, and house them with Phuthuma Nathi Investments.
Shareholders in both transactions would have to hang onto their shares for at least five years before selling to another black person or black-owned company. By the close of the scheme offer in November, the take-up was hugely oversubscribed. But some observers have criticised the transactions for not encouraging entrepreneurship and for lack of sustainable wealth creation.
Those who cheered the deal on pointed out that thousands of investors were being empowered economically (though they might not have voting rights ) - a break from the trend in which a few hand-picked individuals benefit.
Naspers said it was likely to extend this empowerment transaction in the future, depending on the DTI's empowerment codes.
But not to be outdone were the empowerment players in Primedia - the Mineworkers Investment Company (MIC).
MIC, which is the investment company started by the National Union of Mineworkers, shocked media players by announcing plans to lead a buy-out of minorities in Primedia and to delist the company.
Primedia is the third-biggest listed media company on the JSE after Naspers and Johncom, with a market capitalisation of around R5bn.
MIC has been Primedia's empowerment partner for the past six years, holding an interest of around 18% in the group. At the conclusion of this proposed R6bn deal, MIC's economic stake in Primedia would increase to between 35% and 40%.
The only disappointing factor in the deal is that Primedia would disappear from the public arena and operate as a privately held company controlled by MIC and the Kirsh family.
While the empowerment activities of Primedia and Naspers were least expected in the past few months, Johnnic Communications (Johncom) - a group that all media observers and writers expected to announce a deal - once again failed to conclude a BEE transaction.
Johncom was spun off from Johnnic Holdings in 2005 in a move which was expected to bring black players into a major media entity. But such a deal has not been forthcoming, and no convincing case has been made by the Johncom board - despite questions being raised by certain shareholders.
In fact, the board has been cited a number of times (by sources close to the process) as an impediment to a speedy conclusion of the deal, with some members said to be more interested in carving out an arrangement that satisfies their personal needs.
One of the reasons for the slow nature of empowerment in the sector is stringency of sector regulation, which has limited the number of new business opportunities, resulting in few applications to regulators which would otherwise have required an empowerment interest. For instance, there are limitations on the number of radio licences one can own in a single geographic area, and a lack of frequency space.
Media companies also tend to focus more on other segments of empowerment such as employment equity, skills development and affirmative procurement to meet empowerment requirements.
However, with the final codes now out, there may be a pick-up in activity. Naspers has said it is watching the situation closely.
