- BeIN says reports its beIN Sports channels have been switched off in Mena are ‘inaccurate and unhelpful’
- The IOC has ‘no immediate concerns’ about beIN’s ability to broadcast the 2018 winter Olympics in the Mena region
- Uefa becomes the first major rights-holder to test whether Saudi Arabia’s stated sports-rights ambitions are genuine
BeIN Media Group, the Qatari broadcaster, has hit out angrily at media reports suggesting beIN Sports channels are being blacked out in the Middle East and North Africa (Mena) as a consequence of the Saudi Arabia-led economic blockade of Qatar launched on June 5.
In an exclusive interview with SportBusiness International, the company also dismissed fears about its future existence, both in its core market of Mena and other territories in which it operates around the world.
The media group added the blockade would have “zero impact” on its ability to honour global distribution deals for French league football and the international federations of tennis and handball.
BeIN is also unperturbed by reports that Saudi Arabia is planning to roll out its own major sports broadcasting operation with a view to supplanting beIN Sports in the Mena region. The Saudis have sought advice from independent consultants on building a rights-acquisitions strategy. SportBusiness International understands this includes assessing the feasibility of taking over existing contracts held by beIN Sports.
BeIN ‘not an affiliate’ of Al Jazeera
One of the 13 conditions for lifting the blockade imposed by Saudi Arabia, Bahrain, the United Arab Emirates and Egypt was the closure of Qatar’s Al Jazeera news agency and “its affiliates”. Those affiliates were listed in private correspondence between Saudi Arabia and Qatar and do not mention beIN Media Group or its premium beIN Sports channels.
BeIN Media Group grew out of Al Jazeera Sport, the Qatari sports channel launched in November 2003. The first beIN Sports channels outside Mena were launched in France and Asia in 2012. In December 2013, the sports operation was spun off completely from the Al Jazeera Media Network. The following month, beIN Media Group was incorporated and became the holding company for the sports channels, with Al Jazeera Sports channels being rebranded beIN Sports. All these businesses are owned by sovereign wealth funds belonging to the ruling family of Qatar, the House of Thani.
The broadcaster told SportBusiness International this week it was not a target of the blockade: “BeIN Sports is an independent media company which is not affiliated with any news network, and we continue to operate successfully throughout the dispute. We believe sport bridges culture, captures imaginations and should ultimately remain separate from politics. Despite the loudness of the rhetoric, the impact on our business in Mena has been minimal. There are only three territories that are affected, and in a very minor way, out of 23.”
The broadcaster added: “The reporting and the rhetoric is so inaccurate and unhelpful because the headlines say things like ‘beIN switched off in Saudi Arabia and the UAE’ – it’s just not true.”
Officially, the Saudi-led blockade is a reaction to Qatar’s support for Islamist movements such as the Muslim Brotherhood in Egypt and Hamas in Palestine, and the country’s close ties with Iran – Saudi Arabia’s main economic and political rival in the region. Qatar has strenuously denied any suggestions it supports Islamist terrorism. Many observers see the dispute as a regional power play set against the background of economic diversification, with countries in the region moving away from a dependence on dwindling oil and natural gas reserves.
The four nations extended the original July 3 deadline for their 13 demands by 48 hours to July 5. On July 7, with Qatar still refusing to acquiesce, they released a joint statement saying their initial list was now void but threatening new political, economic and legal sanctions.
The sports broadcasting industry has been holding its breath since the blockade began. BeIN has invested billions of dollars into the industry. In addition to its broadcast operation in Mena, it operates beIN Sports channels or pay-television platforms in France, Spain, Turkey, the US, Canada and across Asia. Through these businesses, it has hundreds of rights deals with sports bodies (see table for main rights deals in Mena).
BeIN also has deals worth hundreds of millions of dollars to distribute the global media rights of the Ligue de Football Professionnel, France’s football league, the International Tennis Federation and the International Handball Federation.
Short-term impact limited
Although Al Jazeera’s news operations are Saudi Arabia’s main target, beIN Sports has been affected by the blockade. In Abu Dhabi and Dubai, its IPTV streaming services have been blocked. In Saudi Arabia and the UAE, beIN’s points of sale – mostly in shops and malls – have been closed, preventing the company signing up new subscribers.
So far, the impact of these measures has been limited. Of beIN’s subscriber base in the region, which is thought to be just over three million households, only about five per cent receive their programming via IPTV. The remainder receive it by satellite, which had not been affected at the time of writing. There have been reports that the beIN channels would be taken off the Saudi Arabia-based Arabsat and Egypt-based Nilesat satellites. But beIN is the largest single customer for each, so the cost of removing the beIN channels would be substantial. Even if that were to happen, Qatari-owned satellites could still service the whole Mena footprint.
The broadcaster said its sports output continued to be delivered by satellite across the region, including the blockade territories and that it had started legal action over the ending of IPTV delivery of its channels. “We started legal proceedings this week for wrongful termination. UAE have terminated our distribution on IPTV services without telling us. We have existing agreements. We haven’t been informed of anything. They’re in breach of these contracts.”
BeIN Media Group is a partner of the IHF (Source: Getty Images)
Rights-holder reaction
Losing visibility in an important region like Mena is the immediate concern for rights-holders. The deeper fear is that the dispute might escalate to a position where the Qataris would agree to shut the broadcaster down to appease its opponents – leaving rights-holders with no broadcast partner in multiple markets at short notice and worried that rights-fee commitments would not be met. At the time of writing, there was no threat of Qatar closing either Al Jazeera or beIN Media Group. But the situation is highly unpredictable.
The consensus among rights-holders contacted by SportBusiness International in the week of the July deadlines was summed up by an executive at one European football league, who said: “The situation is quite worrying but we’re not panicking yet.”
The International Olympic Committee provided a brief statement, saying: “In terms of the impact on our partner’s commitments, we have no immediate concerns regarding broadcast coverage in the Middle East and North Africa of the Olympic Winter Games Pyeongchang 2018 which is in over six months’ time. However, we are in regular contact with our long-term partner beIN Sports to monitor the situation.”
The blockade is said to be of grave concern to the Asian Football Confederation. Half of its global rights income of $75m per year comes from a single deal with beIN which expires in 2020. The AFC declined to comment, referring SportBusiness International to its statement of June 23 which said: “All stakeholders involved in Asian football must respect the principle of political neutrality” or risk facing disciplinary action.
BeIN said those rights-holders who had been in contact understood the difficult position it was in. “Every time we’ve explained the situation to a rights-holder, we haven’t had an issue. Rights-holders accept what we say when we explain it and the impact on our business. Rights-holders are sympathetic to us being caught up in this issue.”
The company believes it has built up reserves of credit with sports bodies by delivering across a range of performance targets as a global media-rights partner. “The global relationship is part of what’s really important to us and rights-holders. Our relationship with them is much bigger than one territory, one region. It means we’re always respectful to rights-holders in Mena. We’ve invested billions in Mena, not just on rights: on technology, on studios, on talent, on outside broadcast. That’s been done over the last 14 or 15 years, and especially the last three-and-a-half years since we’ve been beIN.
“The rights are just the tip of the iceberg. It’s about delivery of the rights, especially in a complex region with 23 markets. Having distribution, sales, editorial and journalistic capabilities is hard and takes years to establish.”
The French football league and the international tennis and handball federations have so far not sought reassurances about their global rights distribution deals. If they were to do so, the broadcaster said, the message would be simple: “We say business as usual; zero impact on our ability to deliver these global properties.”
Uefa has launched a rights tender in Mena for the Champions League and Europa League (Source: Getty Images)
Saudi sports-rights ambitions
The blockade has thrown up another kind of threat to beIN Sports: a potential new competitor, with the economic resources to bid aggressively for top sports rights.
Just over a week after the blockade was launched, the Saudis announced plans to roll out PBS Sports, initially with five channels, but expanding to 11. The channels would be carried on the Arabsat satellite and be shown free-to-air. Local media reported the objective was to break beIN Sports’s dominance in the region, but since the initial announcement no further details have been revealed and a press conference planned to explain the broadcaster’s strategy has so far not taken place.
Rights-holders are now trying to interpret whether this is a real, long-term proposition or merely part of the short-term sabre rattling. BeIN told SportBusiness International that rights-holders “realise that for the long-term viability of their sport in the region they need a stable and sustainable market”. But there may be an element of wishful thinking in this.
The way rights are sold in the region in the coming months will be a test of whether rights-holders really do take a long-term view built on reliable partnerships, or are merely interested in securing the highest possible revenue in the short term. Publicly, they usually say the former. Privately, they frequently admit it’s the latter. As a senior executive at one major rights-holder put it this week: “The sports business is largely short term; rights-holders want to know their partner will be there for the next contract run, and they are generally not thinking about the one after that.”
On July 5, Uefa became the first major rights-holder to test the new market dynamic by launching a tender in Mena for Champions League and Europa League media rights for three seasons, from 2018-19 to 2020-21, with a July 17 deadline. The timing of the process dismayed beIN, which saw it as opportunistic. Uefa had not responded to a request for a comment as this article went to press.
The rights to both competitions in Mena are currently held by beIN. If the Saudis are serious in their intentions to build a sports broadcasting operation there are few more attractive properties than the Champions League. By next week, it will become clear whether the competitive landscape is changing, and whether beIN Sports is set to face its biggest challenge to date.
Given the complexities of the geo-politics at play in the dispute, it will be many months, at least, before the longer-term destiny of beIN – and Qatar’s whole relationship with sport as a soft-power tool – become clear.
