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Ugo Obi-Chukwu @ugodre
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Hello Everyone, welcome to the December installment of Corporate Stories by @Nairametrics.

#NMCorporatestory is BTU by @BluechipTechNG

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On this latest installment of corporate story, we are going to tell the story of a young man and his start-up, who dared to take on a mighty monopoly.
The story navigates through the murky waters corporate competition.

About displacing a corporate monopoly and the perils of riding that success.

The intersection between crony capitalism, patient capital and executive exuberance.
It's a lesson for any self-determined visionary out there who is building a start-up to take on the next vulnerable monopoly.
1. “Power is about to change hands” a newspaper headline read in late 2006.

A week before then, November the 6th 2006 to be precise, a competitive bid was being held somewhere in the United Kingdom.
2. For the first time, a "proudly Nigerian owned" company was about to displace foreign owned monopoly that had cornered Africa’s largest market for about 13 years.
3. At stake was a bid for “Territory 70”, a commercial term for the Nigerian Market.

It was made separate from the rest of Africa by the owners of one of the most valuable content in the world after it recognized the value demographics portends for pricing its product.
4. Seven Nigerian companies submitted bids, but that night only one was favoured to win nearly 70 percent of the total package on offer.

That win, will of course, be to the detriment of the behemoth that was a ruthless monopoly from South Africa.
5. As the bid came to a grand close, a local startup was about to do the unthinkable.

Nigeria’s HiTV was announced the winner of Nigeria’s “Live A” for Territory 70, giving them exclusive rights to broadcast Premiership football matches in the whole of Africa.
6. The “Live B” offer was given to Free to Air Broadcasters in Nigeria and included a single non-exclusive premiership match.

It was a massive victory and the beginning of a new dawn for Nigeria. "Never again, will we allow a foreign monopoly take advantage of our market."
7. At the heart of the victory was a young handsome lawyer, Toyin Subair.

His Startup, Entertainment Highway Limited “HiTV” had just pulled of the unthinkable and was in a few months about to shift the pay tv dynamics in Nigeria.
8. In his corner, was the Minister of Information and Culture, Frank Nweke Junior, who had promised that as Minister, the foreign dominance of premiership rights in Nigeria will be shattered.
9. His vision of seeing a Nigerian company own broadcast rights to premiership in the country as far more important than anything else.

His promise was about to be fulfilled and now, there was no turning back.
10. The deal was reportedly worth over $28 million and with the government firmly behind the Startup, no one was going to stop the successful launch of Nigeria’s first truly pay TV channel, which is taking the market by storm, with the crown jewel that was the Premiership rights.
According to an FT article that chronicled the significance of this achievement, Hi TV had spent about

“$28m in 2006 to secure the right to broadcast English Premiership football for three years even before they had sold a single dish.”
12. It was stuff made of legends and had all the ingredients of success.
13. Behind this remarkable deal was Guaranty Trust Bank Plc, then led by the Late Tayo Adenirokun.

The bank financed the transaction and reportedly took a 15% equity in the company. The political class also gave their support in full.
Mr. Frank Nweke was so determined to ensure that a Nigerian company win this bid, he even accompanied them to the United Kingdom to ensure that broadcast rights to Nigeria was unbundled from the rest of Africa. It did not end there
15. To demonstrate this confidence, on the early hours of February 2nd, 2007, he arrived at the offices of HiTV to buy the first "receive equipment" from the company as it began operations the same day.
16. Mr. Nweke remarked that the reason he had come so early to buy their equipment

“was to show solidarity with Hi-TV" because its CEO, the young lawyer, Mr. Toyin Subair, "embodied the Nigerian spirit."
17. Flash Back
18. Toyin Subair or TSub as some referred to him in his humble days in Surulere has always been a very infectious person.
19. A dashing looking guy and a smooth talker, Toyin, they remarked had a magic about him that drew the admiration of anyone he related with.

It was like a gift, the type only the great man from above, could bestow on someone sent to earth on a mission.
20. From his Secondary School days in Federal Government College in Kaduna to his University days in LASU, Toyin was loved and respected.

Guys wanted him around and the ladies were enchanted and attracted to his charm and looks.
21. Toyin graduated with a Law degree from the Lagos State University and soon joined the chambers of notable law firm of Professor AB Kasunmu’s Chambers.
22. There, he also charmed his colleagues and employers and soon became a favourite of the lead partner as he got closer to the family.
23. As a young lawyer, Toyin took his job quite seriously. By leveraging on his tenacity, interpersonal skills and charisma, he quickly rose through the ranks in the law firm.
24. His relationship with clients ensured more jobs accrued to the chambers and soon, he earned the confidence of his boss who perhaps hoped, he could one day lead the law firm in future.
25. Toyin was known to close associates as a bit of an extremist. When he set his mind on something he executed with all his heart. Never one to be half measured, he embraced work and life to its maximum capacity.
26. He soon left Kasumu to setup his own Law firm in 1997.

He named it Abraham & co, Solicitors & Advocates.

The name Abraham was Toyin’s adopted Christian name after he became a Born-Again Christian in the early nineties.
27. As an extremist, he took his new found religion seriously and was very well known within pastoral circles. His conversion was a regular testimony and an inspiration to anyone who found it hard to break the shackles of inherited religious inclinations
28. Business also appeared to be going well for the young lawyer.

As is typical with the law profession, smart lawyers who resigned from bigger firms, often left with close and often lucrative clients, whom they had served on personal capacities for years.
29. For someone of Toyin’s charisma and interpersonal skill, it wasn’t difficult to upset the powers that be at AB Kasunmu
30. Abraham & Co started to grow and with time acquired notable clientele such as Microsoft, HP, Nigerian Television Authority, Multichoice, MNET in its portfolio.
31. Toyin was also very close to one Adewunmi Adedeji Ogunsanya, a close friend family friend in the nineties.

Through Adewunmi he often got briefs as a one of the legal advisers to Multichoice Nigeria Limited, operators of DSTV in Nigeria and a future competitor
32. As a young lawyer and smart businessman, Toyin allegedly studied the business model for PayTv in Africa.

He understood the dynamics of the business and how to broker deals with content providers.
33. Unbeknownst to Dewunmi, the young Toyin will one day use his charm and tenacity to usurp him as the number of Pay TV provider in Africa’s largest market.
34. On February 1, 2007, Hi Tv successfully launched as a Pay TV station in Nigerian. In attendance was the erudite Minister of Communications and Information, Mr. Frank Nweke Jr.
35. Also in attendance were reputable Nigerian industrialists such as, Mr. Felix Ohiwerie and Senator Olayinka Omilani, the National Vice Chairman, South West of People's Democratic Party (PDP).
36. Senator Omilani apparently was the Father in Law to the young Toyin and proudly supported his son in law in his latest venture.
37. In addition to the premiership, Hi TV also had rights to the Spanish La Liga and the Italian Serie A. They launched with about 17 channels including HiSports -- four channels including HiSoccer, HiMix, HiNolly, Nigezie and Hi-Ovation.
38. They also claimed to have signed contract with the American NBA." And would also air international channels such as CNN, BBC and Fox Sports.
39. The strategy here was clear.

By using the premiership as the main driver of its business, they could quickly rack up subscribers and gradually get them exposed to other contents that they had.
40. In the Cable Business, sports and more sports, followed by news channels, reality TV’s and movies were the key to locking down subscribers.
41. But there was also one small hurdle.

Nigerians were already used to watching premiership wherever they were.

Location did not matter, so long as you owned a decoder and a dish.
This was a tall order for HiTV and could warrant significant capital outlay which they did not have.

It will also mean setting up shops in every part of the country, where it wants to broadcast.

If not handled strategically, they could rile subscribers even before they started
43. They decided the way to go was to adopt satellite option. The difference was that while cable TV as line of sight service requires installation transmission facility in every city,
44. on one location on a good satellite, they claimed, will enable Hi TV to be received all over the country.
45. As Toyin himself opined back then..

"We are now on Eutelsat W4 on a spot beam that covers the whole country. Nigerians will thus be able to view all our channels nationwide."
46. The hybrid of Cable and Satellite would perhaps be the solution to one of the biggest challenges the young company will soon face.
47. As Hi TV commenced the broadcast of Premiership football in August 2007, it soon came to appreciate the difference between rising to the top and staying there.
48. At N3,000 per subscription, the company sold at a huge discount to its competitor DsTV, which sold its subscription for N9000.
49. HiTV's decoder was also low in quality and lacked some of the features Nigerians were already accustomed to with DsTv.
50. Considering that it still had limited channels, it could not rely only on the Premiership to court subscribers.

They also knew football was mostly during the weekends and quickly faded once the games were over.
51. Its strategy was to offer subscribers one-year deals of N36k in exchange for free decoders and access to their content for a year.

DSTV offered one-year subscription but you only had to pay for 11 months. The 12th month was free, but you had to pay for decoders.
52. By starting out with a price war, HiTv showed its hands earlier on and told an already experienced competitor how it wanted to play the game.

In hindsight, this was perhaps a wrong move.
53. Not to be cowed by the first major threat to their market dominance, DSTV would fight back.

They entered beast mode and deployed all the content in its arsenal to ensure it kept the loyalty of its subscribers.
54. It first yanked off CNN and Al Jazeera from HiTV and invested heavily in more content. Its Big Brother Franchise, which had in 2006 captivated Nigerians was extremely popular and still of immense value to viewers.
55. The reality program, keeping up with the Kardashians, which had just premiered, was a fan favourite. They also had the compliment of music channels, MTV and Channel O, and shifted strategy to developing more home grown content.
56. If there was anyone who had something to lose here, it was content hungry Nigerians.

Nigerians now had a choice to make and DSTV made sure it wasn't going to be a zero sum game.
57. Considering the flurry of content still available at rival DSTV, families had to make an expensive compromise.

To appease, their wives and kids, soccer loving Dad’s had no choice but to own both a HiTV decoder and a DSTV decoder.
58. The division was clear. Women and children will not trade any of their content for football.

It will be the first major defence thrown at HiTV. A sign, that DSTV was not about to be pushed aside so soon
59. Nevertheless, within a year, HiTV quickly racked up about 240,000 subscribers to DsTV’ s 200,000. Most of them were football loving subscribers who could not let go of their darling premiership.
60. By 2009 subscription cost went up to N4,000. Despite this impressive number, it still fell short of paying back the premiership rights let alone servicing the existing loans.
61. The company will have to achieve at least, 500,000 subscribers if it was to be profitable and boast of a comfortable cash rich balance sheet.

It was a tall order
62. Just as balancing the books was a major challenge earlier on for HiTV, so were other teething issues.

The company had major service delivery issues. Complaints flooded their customer service centers from all parts of the country.
63. For example, after paying for subscriptions, it took the company days to activate viewing.

Customers became accustomed to going for days without service after making payments.

They were more scrambled channels than content
64. . Customer service could not face up to the deluge of complaints they were getting and soon incurred the wrath of subscribers.

Quality of viewing soon dropped and service disruptions became a norm.
65. A thread titled “HiTV or Hi Rubbish” will soon be created on Nairaland, Nigeria’s most popular online forum.

The opening thread encapsulated the major complaints being experienced by Nigerians.
66. “Dear Nairalanders, after HITV succeeded in making subscribe for 12-month subscription all because i cannot afford to miss watching my exciting premiership games, they have started with their Hi Rubbish."
67. "Do you notice they have been scrambling and descrambling before they FINALLY SCRAMBLED on Wednesday? I called their customer care and the girl that responded was merely laughing when i complained about this rip off? What do you think i should do?”

The thread was vicious
68. Amid all these complaints, rumours started to swirl about the lifestyle and conduct of the charming and exuberant Toyin Subair.
We have come to the end of the first part of this series.

The second part will be live sometime this week.

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Chapter - Lifestyle of the Rich and Famous
69. In one story of his purported flashy lifestyle, Toyin was alleged to have thrown a birthday bash in London where he spent N5 million on Champagne. According to media reports, the company’s account was debited for the bill.
70. The media was on the prowl. Reports started surfacing about his penchant for the high life. One report suggests he had about 10 flashy cars and was often seen driving by himself.
71. Some claimed he often traveled on First Class when attending meetings abroad and flies nothing else but private jets for local travels.

Others close to him reveal his high tastes for expensive designer wears, including wrist watches and shoes.
72. Toyin will deny some of these claims years later, insisting that everything he did was within the company’s corporate governance code. He however did not explain how he funded the flashy cars or if it was part of the company’s fleet.
73. But as he came to learn later in life, perception is often reality, especially in the internet age where your image and profile can be distorted when shaped by bloggers and powerful influencers.
74. It is thus inconceivable to disentangle the story of the failure of HiTV from the flashy lifestyle of the mercurial TSub, who from his hey days in Surulere, was known for his charisma and style.
75. A man’s reputation is often perfectly correlated to the success of his enterprise. When your business is doing well accolades tend to follow. And when things go downhill, people look for scapegoats and more often than not, the man at the top is an easy target.
76. At the simmering height of HiTV, Toyin Subair was the toast of the media and entrepreneurship community. Toyin in 2009 won the Young Manager of the year 2008 at the ThisDay awards and the City People Awards-in the category of the Entrepreneur of the year 2008.
77. In 2011, he also won the award of "New Champions For An Enduring Culture" at one of ThisDay’s biggest award shows to date. The award graced the presence of Bill Clinton, Arnold Schwarzenegger. He shared the award with the likes of Chimamanda Adiche, Chiwetel Ejiofor & 2Face
78. Toyin was also invited as a guest speaker in several entrepreneurial events, lecturing aspiring up and coming founders on how to follow their dreams. He will eventually come to realize that success has many fathers but failure is an orphan.
79. In February 2009, HiTV announced it was having its anniversary dinner as a way of saying "thank you" to their dealers and “media friends”. When asked why it was necessary to have a dinner after just 2 years of operation, My Subair responded uncannily.
80. "A whole lot, that we are all alive and well and that the business is growing stronger is so much to be thankful for and we are indeed GRATEFUL TO GOD. We are also expanding rapidly, opening friendship centers in partnership with our distributors so we can be closer to our.."
81. "customers and offer them a much higher level of service. We have already opened one in Kano and several more will be opened within the next few months. We also now have a more robust subscriber management system that has greatly improved our processes and"
82. "removed a lot of the challenges we faced in the past. Our new office in Ikeja will be open to the public shortly and the location comes with ample space to serve our customers better."
83. "We are also on the verge of hitting our 200,000 subscriber mark after only two years of commercial existence and this goes to show the confidence Nigerians have in our service as they continue to acquire it. This is definitely worth celebrating."
84. "We are moving from being a start up to a full operational company. Whilst we were expected to out perform a foreign owned, financed and run 15 year plus business on day 1, we have worked very hard to do this in the last 18 months and are very proud of ourselves"
85. These were the sort of response you would expect from a man bursting with confidence and looking into the future. It is how Startup founders sound when they have the imaginary halo effect on their head
86. In retrospect, it will also be unfair to read negative connotations into this response. HiTV was the toast of the media and had just displaced a Cable TV giant in DSTv.
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Chapter - The Business model that wasn’t!
87. With subscriber growth approaching 200k his business model seemed to be super tight. To scale quickly his Pay TV startup, his model was to focus first on Sports (Football in particular) and then gradually introduce other entertainment channels.
88. He confirmed this in one of his interviews;

"HITV was never set up to sell football only; it was circumstances that led us to use football at inception as our mainstay content. "
89. "We have used football to gain the high-level of acceptance we hoped to get, now is the time to go back to our original business model, which offers Nigerians unparalleled entertainment."
90. They staying power of Cable TV in Nigeria was not just about sports, it was offering a blend of content for women, children and organisations. Family entertainment had to be the goal for any composite content offering.
91. Unfortunately, he just lost rights to CNN, Discovery Channel and did not have MTV Base, the leading music channel in Africa at the time.

But HiTV did not just rely on sports.
92. To the company, sports was football and spent millions of dollars securing rights to some of the best football content in the world. The company was the major broadcast right owner for EPL, Laliga, Seria A and Uefa Champion League.
93. . It was the only on HiTv that viewers can watch PL, Carling Cup, Serie A and Champions League from next season.

The media soon observed, HiTV’s reliance football as a downside risk and pressed its young CEO on the way forward.
94. The downside risk of relying on one content stream was grave and if that door was shut the company could crumble.

HiTV did respond with a slew of organic channels.
95. . It had about 25 channels out of which 5 was dedicated to sports. They had 3 channels dedicated to Kids, 4 dedicated to News, 1 documentary channel, 3 Religious channels, 3 movie channels, 3 Music Channels 2 lifestyle channels and 1 channel dedicated to the Yoruba audience.
96. However, apart from Fox News, Nigezie and Hi Nolly, the other channels were duds. As the clock ticked on the premiership rights the company’s service related issues continued to mount.
97. Content partners also started complaining about contract breaches and unfair treatment by HiTV.
98. By October 2009, Pay TV Cabal, The Association of Cable Television Operators “ACON” dragged HiTV to court for operating in a “tyrannical" way, refusing to grant them access to rebroadcast the English premiership matches "even when they are ready to pay for such access.”
99. This was ironically the same charge labelled against DSTV the immediate past owners to broadcast premiership in Nigeria at the time.
100. The Cabal led by PayTV operator, CTV accused HiTV of not reselling premiership rights to them, an agreement they claimed to have reached with HiTV a year earlier.
101. They were also upset that with less than a year to the end of the rights (rights were to end in 2010), they still did not have access to broadcast the matches, making them lose money and cut jobs.
102. In one media report, the association claimed it “considers this a heinous crime" because, acquiring the EPL broadcast right was particularly "easy" for HiTV
103. and that because it promised the EPL that it was going to allow local cable TV operators "access to rebroadcast" the league game and thereby making the content "more popular.”
104. ACON prayed that the court declare that satellite television companies should license programmes especially the English premiership matches to other Cable TV companies if they are ready to pay the fees.
105. Toyin Subair responded to these claims accusing the Cabal of being “lazy, running one shows as against a more standard structure that can allow them high profile business like rebroadcasting of the EPL.”
106. Toyin further alleged that HiTv offered them the rights but "they don't want to pay nor give bank guarantee" and accused them of operating "one-man business without structure"
107. Another remark that would infuriate the operators was this

"They cried for over fifteen years that nobody could do the business but HITV has proven them wrong and now they're talking about courts. Did they ever take DSTV to court?”
108. Multimesh, another of their rebroadcast partners who had their offices in Calabar raided by the NCC for copyright infringement provided an insight into the deal when their CEO appeared at the Senate Committee in early 2009.
109. In a report to a cross section of members of the Senate at a hearing they claimed that their offices were raided after providing HiTv with a bank guarantee of N30m and N18 upfront payment
110. Again Tsub dismissed this alleging that the cheque was cancelled and that what they negotiated for was for a 3 months rebroadcast deal for the Porthacourt area
111. Mr Subair also faced issues with his investors and fund providers (GT Bank). Revenue streams from the Cable TV subscriptions were not enough to cover debt service obligations and often fell short of repayment deadlines.
112. Early investors in the company had also not received any return on investment and worried about the perceived lifestyle of Mr. Subair.
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Chapter Rights to fail
113. By the fall of 2009, it was obvious to him that getting funding to renew the license would be a major challenge. The company’s financing model was debt and equity but highly skewed towards debt.
114. The company was paying between 25% and 27% interest rate and according to Subair, was paying an average of N1.1billion approximately in interests and guarantee charges annually, for over 5 years.
115. HiTv wasn’t the only company facing a bleak future. In February 2009, London based GTV, an African Premier League Provider and owned by Gateway Broadcasting Service or GTV went into liquidation.
116. The Pay TV’s business model was to buy premiership right from the EPL for Africa and then broadcast to African countries in exchange for subscription.
117. As a Startup, GTV raised $200m when it launched the Pan-African service in 2007. From that amount it paid $20m to show Premier League games under a three-year rights package and aimed for 400,000 subscribers.
118. As part of its Pan African model for sports, it also backed several domestic leagues in Africa, including a four-year tie-up with the Federation of Uganda Football Association (Fufa) to support its top club competition – the Super League.
119. Well woven into its revenue model was charging its customers lowers fees, a strategy that was targeted at Multichoice as well as Canal+. Again, strikingly similar to that of HiTv
120. Unfortunately, Multichoice was backed by Naspers (one of South Africa’s largest company) and Vivendi backed Canal+. Just as GTV was gaining ground, having secured, 100k subscribers across the continent, the global financial crisis hit in 2008.
121. It will declare bankruptcy later that year and ended a once water tight business model that its investors thought would bring down the mighty Multichoice
122. HiTV knew the day of reckoning was close and decided early to explore alternatives. Apart from investing in local content and acquiring content for its own stations, it explored the possibility of a joint bid with other Cable TV Operators in Africa for Premiership rights.
123. Somehow, its future was inexplicably tied to the Premiership and it had to have a Plan B on the side. To Cable TV Operators, Football was the main driver for content and the key to their survival.
124. With the likes of Drogba, Kolo Toure, Eboue, Adebayor, Michael Essien all at their peak, Africans yearned to see their heroes play weekly on live TV.
125. The plan was to allow every African country to bid for the EPL rights thus giving each country a bite of the associated revenues that came with their acquisition.
126. According to one report at the time “it will also allow also those participating in the consortium to share satellite capacity and get much better deals on their set-top boxes.”
127. Some reports at the time put the number of companies who had signaled interest in the joint bid at 18. Apart from jointly sharing cost, the revenues from the two main sponsors of the Premier league in Africa will also be split among participating members.
128. In addition, each country can also secure ad rights locally to boost their revenues. Unfortunately, talks broke down as member countries failed to mobilize cash in time for the bid rounds. HiTV found itself going solo for this bid.
129. As plan B, it had an “understanding” with DSTV that should it acquire the rights to the premiership, it will share broadcast rights to more matches in Nigeria in exchange for fees.
130. And so, in early 2010, HiTV put in a bid for another 3 year of rights to the English Premiership. According to Mr. Subair, the company paid the EPL $40 million for the first year of the second term of the EPL, with the funding coming “from mostly equity”.
131. For the remainder of the two years, they had to produce a bank guarantee to the tune of a whopping $70 million. Its bankers GTB now had issues getting the guarantee after the reforms at the CBN changed the way guarantee were issued.
132. According to Subair, on a Monday, the day, they were supposed to provide the bank guarantee, the CEO of the bank explained the position of things and assured the English Premier League board that they will get the guarantee they asked for on Friday.
133. By Tuesday (the next day) the rights were withdrawn.
134. On July 22, 2010, DSTV announced that it had won the rights to broadcast 380 Premiership matches in Nigeria plus the Premier League’s 24-hour content service in high definition. Broadcast launch was set for August 13 across the whole of sub-Saharan Africa, including Nigeria.
135. While HiTV still had the Carling Cup and Europa cup on its bill, it approached DsTV which it had an “understanding” with to share broadcast rights to the Premiership 50:50. DSTV's replied that it was not in its best interest to share. Time to have its pound of flesh
136. According to bemused Toyin, “We believe that DSTV would be excited at our offer because last season when we paid for the right, they approached us for a fifty-fifty deal and we obliged with the condition that as a young company we would also like to share fifty-fifty
137. broadcast rights with some of their programmes which were not on our platform. We believed that was a fair offer as a young company, but for reasons they know better, they pulled out. Otherwise we have never had any sour relationships”
138. In Military circles, whenever you had a chance to destroy your enemies, do so quickly and without mercy. Being conciliatory was forbidden as it could set the stage for your own downfall. It was also an opportunity for Dewunmi Ogunsanya to get his pound of flesh.
139. DSTV’s refusal to share broadcast right to the Premiership with HiTv was a major blow to a young Startup that had issues on multiple fronts. To mitigate the disastrous fallout that loomed, HiTV quickly pivoted its narratives within media circles.
Chapter - The beginning of the end
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Welcome to the third and final part of Corporate Stories by @Nairametrics

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Chapter; The beginning of the end
140. In several interviews granted within the period, Mr. Subair told reporters that HiTV was not just a Football only station, that they also had other relevant content in their bouquet. They added One Music (a music channel) and controversially yanked off Nigezie.
141. Hi Nolly was also revamped to show newer movies rather than the old Nigerian movies that made it such a turn off for non-football lovers.
142. The company also slashed subscription fees for its Premium Bouquet from N6000 to N3000 hoping this would increase its subscriber base from 300,000 to 500,000 in less than 6 months. If only wishes were horses.
143. As they made all these moves, the vultures circled in on the company. First, it was the shareholders who decided it was time to pounce.
144. Typically, in situations like these, the first option for investors in a company is to increase their equity position and get more inexpensive cash in.
145. That way the business can assure creditors of their going concern proficiency, thus buying time to crawl back some of its lost market share.

Unfortunately, HiTV investors who were filled with mistrust and selfish motives had other plans.
146. The management had put up a proposal that would have the company raise more equity from investors and then launch a possible IPO where to could source more funds from the investing public.

The stock market was in a boom in 2008, when talks began for an equity raise.
147. This was a period when confectionaries raised raising billions in the stock market provided they had display window with bread and meat pies as proof that business was good.
148. Had HiTV launched an private placement or even IPO at the time, it could have raised billions from an investing public, with an appetite to swallow any offer that came their way
149. Unfortunately, the planned equity drive became bogged down in board room politics and shenanigans. While a group of investors saw this as an opportunity to pump in more cash into the business, others viewed this move as a hostile takeover and a ploy to dilute them.
150. In hindsight, Toyin remarked bitterly that there was a clause in the shareholder agreement which “allowed a group of founding shareholders to block the company raising money or selling off a subsidiary. “
151. It was a lesson on how to not draw up shareholder agreements. In the corporate world, the difference between survival and demise can sometimes be embedded in the fine prints of agreements such as SA's, SPA's and Memat's.
152. When the push comes to shove, Memorandum of Understandings & long standing relationships become worthless.

Every word embedded in regulatory filings and board minutes are appreciated for its worth. Those who prepared for days like these typically end up winning
153. In place of friendship, comradeship and chivalry enters lawyers, arguments and personal interest. It's either I win or the we collectively fail.
154. By the time the board room squabbles were resolved, the stock market boom had bust and stocks were falling like a pack of cards. It was too late to raise any more funds, thus the rush to the banks to raise funds to pay for the second installment of premiership rights.
155. The company was already paying a whopping N1.1billion “approximately in interests and guarantee charges annually, for over 5 years” Toyin will later reveal.
156. Nigerian banks held their collaterals very jealously. As most debtors will come to learn rather belatedly, banks are not necessarily interested in your business idea or dream. For banks, their dream is the cash flow your business can start to generate from day one.
157. To further secure their collateral, the source of that cash flow is jealously tracked and ring fenced as much as possible. It’s the simply logic of following the money.
158. HiTv’s source of cash flow, was not the company and neither was it Toyin’s personality, vision or tenacity. It was the premiership rights that he once had. Now that it was lost, it was only a matter of time before the vultures start to circle in.
159. On the morning of 23rd November 2011, Page 35 in the Guardian Newspaper, GTB puts up a Legal Notice, claiming that HiTV owed the bank, N9,228,269,021.
160. It then appointed Chief Ajibola A . Aribisala [SAN] a legal practitioner, as receiver/manager “over the entire undertakings, stock, goodwill, plant and machinery.”
161. The cookie was crumbling as the pressure built massively for the young CEO.

HiTv responded through its legal counsel that they had a case in court against GTB claiming “the improper sale of the UEFA rights along with other issues concerning its relationship with GTBank"
162. Despite the N9.2 billion claims against HiTV, GTB also had N500m stuck in HiTV as part of its own equity investment in the business, under the compulsory SME Investment Fund requirements of the CBN.
163. Unfortunately for HiTv, this was a period when Banks were writing off billions in bad debts, following stricter prudential guidelines by the CBN.
164. As at the end of 2011, GTB had about N5.2 billion in equity investments in SME’s out ow which N2.4 billion were disclosed as “specific impairment” a financial term for admitting that the ability to recover your money were as good as impossible.
165. By the end of 2012, the impairment had risen to about N3.1 billion. Though not stated in its annual report, sources with knowledge of the transaction explain that the bank wrote of the entire investment in one swell swoop.
166. GTB has a reputation among defaulting debtors for being brutal when it comes to recovery. Those who have experienced this brutality recall painfully how quickly the bank pounces on your assets especially if they are senior lenders.
167. In the court documents cited at the time, GTB claimed that between August 23, 2007 and August 23rd 2010, it granted HiTV loans in local and foreign currency amounting to N6 billion.
168. The loans it claimed were to be used to guarantee the purchase of rights to broadcast English premier league, champions league, Carling cup, English FA cup and UEFA games.
169. As it was typical with bank loans, part of the proceeds was also required to finance working capital requirements as well as fund a reality Tv show as well as payment to service providers such as MTN and Etisalat.

GTB also had another claim.
170. It claimed Toyin Subair and a relative young and 'not yet notorious' Director, Kola Aluko had signed a Personal Guarantee (PG) and indemnity against any loans collected by HiTV.
171. PG's are a favourite of commercial banks in Nigeria. In business school you are taught that Limited Liability Companies are entities and separate from their owners. Shareholders of companies are only liable to their shareholdings in the company in the event of a default.
172. In contrast to Sole Proprietorships who can have their personal properties confiscated in the event of a default or bankruptcy.
173. However, banks have learned that companies in Nigeria function differently from what we were taught in business schools. Directors often obtained loans and diverted to their personal pockets or into other businesses.
174. They were so powerful that other shareholders had little or no say on the direction of the affairs of these companies. As such, Personal Guarantees became another tool used by banks to control their business risk.
175. In the case of HiTv, the bank claimed that “the guarantee shall extend to cover death, bankruptcy or liquidation of the company and all sums which would
176. have been owing to the bank by the company if the events had occurred, notwithstanding such death, bankruptcy or liquidation of the company, all monies unpaid.”
177. HiTv responded to the allegations, refuting the personal guarantee claims of the banks. According to the company, whilst they agreed that they collected loans from the bank, it disputed the interest that was charged against them.
178. On the personal guarantee claim, TSub had a convenient answer. It claimed since GTB was already in charge of revenue collection (all subscription went into a GTB account),
179. that the bank is the one who failed and refused to comply with its covenants and obligations to repay the credit facilities granted as at and when due as stipulated in the offer letters and the deed of all assets debentures.
180. It further retorted that GTB was a shareholder of HiTv and one of the decision makers in the overall affairs of the company, as a result of this, “it was not possible for him to take any decision without the consent and notification of the bank.”
181. It is a classic legal response often used by borrowers who understood the legal ramafications of loan repayments and obligations.
182. It also claimed that “by reason of several agreements and undertakings between the bank and the company, the bank as financial adviser of the company became solo revenue collector, agent, banker right negotiator,
183. and creditor which roles are inconsistent with the personal guarantee issued by T Sub and Kola Aluko and claimed the suit by the bank was “unsustainable frivolous and abusive of court process therefore ought to be dismissed.”
This is an @Nairametrics Corporate Story BTU by @BluechipTechNG

Chapter: Vultures are here
184. GTB did not like this response and to demonstrate its resolve to takeover HiTV, the receivers arrived at the premises of HiTV on afternoon of Monday, November 21, 2011.
185. They arrived with heavily armed policemen in “commando style”, simultaneously hitting all HiTV offices in Lagos. HiTV offices were sealed shutting down operations of the company.
186. There is a saying that goes “Do not play dead with the vultures, because that is exactly what they want”.
187. A warrant for the arrest of Toyin Subair was soon declared, a vintage move when you are trying to force the hand of a debtor.
188. In the world of business, the following people claim as stakeholders. Creditors, who lend you money, Government who demand taxes from you, suppliers, who need to be paid for their services, employees who should be paid their benefits and lastly
189. shareholders who want to recover as much as they can from their investments. It’s a lesson every founder of a Startup should reckon with, as eventually You are the last man standing.
190. As the pressure mounted, service delivery dropped to an all time low. The company lacked the working capital to pay for its content and to service suppliers.
191. Apart from its creditors, its suppliers, with whom they relied heavily on for content soon pulled the plugs.

It was a bitter ending
192. HiTV eventually shut its doors to over 200,000 subscribers and Toyin reportedly left for the United Kingdom where he stays till date.
193. They say when one door closes another will open. A year after the closure of HiTV, GT Bank launched Ndani TV.
194. This was after Continental Broadcasting Studio, the owners of TVC and Radio Continental allegedly owned by a popular Lagos Political Godfather and early investor in hiTV claimed that HiTV owed them assets under a collocation agreement signed when things were good.
195. As HiTV’s situation deteriorated, a new PayTV station, known as Start Times launched. Ironically, their business model was similar to HiTV proposed plans (when it wanted to pivot from football).
196. They targeted the lower end of the PayTV market selling subscription for as low as N1 per month. But unlike, HiTv, they had a better funding structure that could outlast competition.
197. After a bitter lesson learnt, the beast called DSTV, resolved never to play defensive. They went on the offensive and launched their own Pay Tv for the lower spectrum of the market.
198. That way, the can keep competition with the likes of Start Times or any other player, keeping them busy while they enjoyed their monopoly on the premium end of the market.

Hindsight they say is 20/20
This is an @Nairametrics Corporate Story about #HiTV BTU by @BluechipTechNG
Chapter: Lessons Learnt
199. The dream of a proudly owned Nigerian Pay TV Station was all but truly over. Scuttled by an ill-fated combination of flawed operational model, poor execution, inexperience and funding structure.
200. It’s a lesson for any aspiring entrepreneur looking to take on a bigger and stronger competitor.
201. To execute a task as onerous as displacing a big and vengeful competitor, you should be able to outlast them in terms of speed of execution, service, funding and God given skill. Guts is not just enough and Government as usual are hardly reliable when the chips are down
202. HiTv lacked the key ingredient required to take on the mighty DSTV on their turf. In deed, no one has come close since 2009, leaving DSTV with nearly a decade of unassailable monopoly.
203. Unfortunately, HiTV's loss was also the consumers loss. Premium subscriptions have doubled over the last 8 years. However, DSTV has offered more content and improved drastically on the quality of service
204. HiTV came, saw, and was conquered. Ironically DSTV did not need to fight hard. HITV It fell on its own sword never to rise again.

Sometimes all the big cat needs to do is wait patiently till you run out of steam
205. Toyin Subair, did survive this debacle and the scars still remain till date. Today he lives mostly in the United Kingdom and still has significant investments in some viable companies.
206. . He is suggested to be a founder and an early investor in Nigeria’s largest cinema chain in Nigeria and 3rd largest in Africa, Film House, the operators of IMAX Nigeria.
207. He also an investor in Integrated Leisure Property Company Ltd, who are Owners of the Leisure Mall.
This is the end of this installment of @Nairametrics BTU by @BluechipTechNG .

Thanks for all the patience, especially following the lull after part 1. Careful research does take time.
We hope we have been able to tell this Nigerian Story in a balanced, factual and informative manner. Pls give us feedback if there is something we missed, wrongly mentioned or misconstrued.
A compiled version of this thread will be published on Nairametrics in the next few days.
We once again thank @BluechipTechNG, our sponsors for keeping our research work alive.
Thanks to all our followers who have made 2017 such an amazing year for @Nairametrics
Until we come again in January for another interesting Corporate Story, we wish you a Happy New Year in advance.

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Pls apologies for the typos and any observed grammatical errors.

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