But it is the "once off" payment of R25-million that has industry insiders most concerned.
"It is unheard of. I haven't seen any once-off payments [in] any of the agreements with MultiChoice that I'd been privy to," said one of the industry insiders.
The two sources, along with a third industry expert with direct knowledge of MultiChoice's agreements with news channels, all agree that even R50-million per year would constitute a bad investment for MultiChoice.
"What they pay ANN7 compared to what they get from it [the agreement] makes no commercial sense. It is such a bad channel and its viewership is so low that ANN7 actually needs to pay DStv to be on their platform," said one of the sources.
Data obtained from the Broadcasting Research Council (BRC) shows that ANN7 secured only 8.93% of DStv's news audience in 2014, and 10.98% in 2015. Its average daily viewership figures for 2014 and 2015 were 6,215 and 8,157 respectively.
SABC News held news audience shares of 19.90% (2014) and 22.46% (2015) and it drew 12,379 and 15,412 average daily viewers in those two years.
eNCA's average daily viewership was 29,481 (2014) and 32,265 (2015) and it had a news audience share of 54.28% in 2014 and 52.71% in 2015.
Despite ANN7's relatively low audience figures, MultiChoice maintains that it believed the fee increases were justified.
"We believe the fee represented fair value at the time, particularly considering that ANN7 was a start-up channel requiring significant initial investment to get off the ground – as opposed to others, who could leverage existing infrastructure and content," said MultiChoice.
"We deny that there is any relationship between our submission on the proclamation, the channel supply agreement for ANN7, and any fees or increase in fees paid for that channel."
Asked about his relationship with the Guptas, Patel said he couldn't remember when he first met the Guptas.
"I did interact with them, in particular between approximately 2007-2010, and our relationship tapered off after that. I can't recall attending any Gupta social functions after about 2010, except for the wedding in 2013," said Patel.
- << Prev