The long-awaited allocation of English Premier League (EPL) Middle East television rights is expected to be announced next week - not a moment too soon for football fans anxious to know how they can watch the August kick-off.
Several industry sources point to Al Jazeera Sport, a major network that has been successful in building both its brand and coverage, as a strong contender in bidding for the three-year EPL rights, which could fetch $350 million or more.
A win for the Qatari broadcaster remains far from certain, with some rivals insisting no deal is done. Yet such an acquisition is seen by some commentators as a natural fit given Al Jazeera’s rapid emergence as a top-league player in sports.
The broadcaster is known to have held talks with media broker MP & Silva, which in January said it had acquired the three-year regional television rights to EPL games. MP & Silva has been engaged in negotiations to resell these rights to one or more broadcasters across 23 countries in the Middle East and North Africa (Mena).
Five months later, football fans are still in the dark as to how they can watch next season’s games featuring teams like Manchester United and Chelsea. But a deal will be announced soon, said Fadi Zouein, the Dubai-based business development director at MP & Silva.
“The discussions are still in place,” Zouein told Al Arabiya. “We’re hoping by next week we can announce something”.
Speculation is rife as to which media player is closest to clinching the rights to the tournament.
Abu Dhabi Media (ADM), the previous rights holder, has also held talks with MP & Silva about extending its broadcast deal. But its bid is believed to be less than half the $360 million ADM paid for the rights to the 2010-2013 seasons.
Rival Al Jazeera Sport, an arm of the Qatar-based broadcaster, is tipped by some as favorite to win the regional rights to the tournament from 2013 to 2016.
One of the top media executives in the region, who did not wish to be named, told Al Arabiya categorically that “Al Jazeera has won it”.
Some regional commentators shared the same view. “I also understand that Al Jazeera has got it,” said Thomas Kuruvilla, managing director at Arthur D. Little Middle East.
Nick Grande, the managing director of Channel Sculptor, a television consultancy in Dubai, said he too believes the Al Jazeera Sport Channel (AJSC) has won the EPL rights, adding that the delay in an announcement could be due to technical issues.
“The first news that AJSC had won the rights came on 8th April from the ‘Doha Stadium’ website. Since then, a number of similar claims have been made – all from Doha,” Grande told Al Arabiya. “My guess is that a handshake deal was done at the end of March, but the negotiation of thorny issues such as EPL’s requirement for paired cards and set top boxes have taken a long time to resolve.”
Other informed sources, however, say the goal is still open for another player to score the prize.
“If Al Jazeera had acquired the rights, they would have announced it,” said one high-profile media executive. “MP & Silva is still out there trying to sell the rights.”
“The discussion is still ongoing,” said another. “If they’d got it, why didn’t they announce it?”
Al Jazeera did not respond to requests for comment, while Zouein refused to comment on whether Al Jazeera is indeed the favorite to win the rights.
One stumbling block to an EPL deal for Al Jazeera is the security of the network’s TV platform, according to some in the industry.
Al Jazeera’s existing pay-TV platform is “not compatible” with the anti-piracy measures required by EPL broadcasts, said one industry source. ADM and rival broadcaster OSN are believed to be the only regional players with the required levels of security on their TV platforms.
Others say that Abu Dhabi’s ownership of the EPL team Manchester City should not be overlooked in ADM’s determination to renew its rights deal.
Despite such issues, some analysts see a possible EPL deal as complementary to Al Jazeera’s global ambitions in sports.
The state-funded network has been snapping up sports rights both regionally and internationally, in an effort seen by some as being linked to Qatar’s successful bid to host the 2022 World Cup.
In 2009, Al Jazeera Sports paid a reported $1 billion for the rights to sports tournaments broadcast by Arab Radio and Television. These rights included the Fifa World Cup in 2010 and 2014; Al Jazeera later bought the additional rights to the 2018 and 2022 Fifa World Cup tournaments.
In late 2011, the Qatari network was awarded the majority of media rights to screen Uefa Champions League matches in France, under a three-year deal worth a reported €180m. It also holds rights to rights to the French league, and is said to be interested in acquiring the rights to Spain’s La Liga.
Al Jazeera also backs beIN Sport, which holds the U.S. rights to soccer leagues including France's Ligue 1, and which this month said it is launching in Indonesia under a partnership with – perhaps significantly – MP & Silva. In Indonesia, beIN Sport will also broadcast Premier League games.
Grande said Al Jazeera has attained the status of a ‘global player’ in sports media – adding that the EPL marks a “perfect fit for their portfolio”.
“AJSC have been aggressively targeting premium regional and international sports rights (and in particular football) for more than five years. They already have the FIFA World Cup, the UEFA Champions League, the Spanish, Italian and French leagues. If anything it’s a surprise that the EPL has escaped their grip for so long,” he said.
Kuruvilla said Al Jazeera is in a strong position to bid for the Middle East rights to the EPL, given the other rights it holds.
“Technically they will be able to pay a higher rate than the next bidder,” he said. “The person who gets the maximum value out it will be the highest bidder.”
Santino Saguto, a Middle East-based partner at the consultancy and accountancy firm Deloitte, agreed that the EPL would be a good fit in Al Jazeera’s sports portfolio.
“Al Jazeera is confirming its strategy to offer the full set of football rights in the Middle East region, in addition to the existing other leagues,” he said.
Saguto pointed to Al Jazeera’s acquisition of domestic football rights in France as a sign of its global ambitions.
“A global player requires multi-country presence. [Al Jazeera] is indeed a regional leading player. [Its] recent entry in France goes in the direction of multi-country presence but as of now it mainly remains a key regional sports rights player,” he said.
Kuruvilla agreed that Al Jazeera’s ambitions in its sports coverage extend beyond the Middle East – although it does not yet enjoy the status of other sports networks like ESPN.
“Al Jazeera [Sport] is not considered a global channel today compared to the other sports channels,” he said. “It’s trying to become a global player, a global sports channel.”
A difficult game
Buying the Mena rights to the EPL may bring recognition as part of Al Jazeera’s global strategy, but whether it will also bring profits is another matter.
Rights to the tournament have soared in cost over the last decade, far outpacing potential revenues. ADM’s outlay was three times the reported $120 million paid by rival OSN, which held the EPL rights for the 2007-2010 seasons.
Yet Abu Dhabi Media is said to have made a vast loss on the EPL over the last three seasons, with subscription revenues amounting to just a fraction of its outlay on the rights and production.
David Butorac, chief executive of OSN, agreed that the cost of EPL rights had become over-inflated. “The rights holders have to recognize that the value of the rights in the region is not that which has previously been paid,” he told Al Arabiya.
Kuruvilla said it would be “tough” for any player to make a return on the EPL rights in the Mena region. “Returns are risky, and are not guaranteed,” he said.
Grande said he believes that the three-year EPL rights will sell for more than $350 million, after years of inflation due to high bids by government-backed media companies.
“The 2013-16 EPL broadcast rights will sell for over $350m this year. In 2001-2004 the same rights sold for $10m. The commercial viability of premium sports rights in the region has been decimated by government backed networks such as Al Jazeera and Abu Dhabi TV. Profit oriented networks such as OSN are left picking for scraps,” said Grande.
“There are around 40 million TV households in the region. If 10 percent of them paid $50 a year for EPL this would be profitable business. Is that possible? Possible yes, but I’m not holding my breath,” he added.
Saguto said it is not impossible for Middle East broadcasters to turn a profit from buying the EPL rights.
“It is proven in many countries that sports rights can be successfully monetized over the medium-long term, once enough subscribers buy pay-TV services,” he said.
“Companies in [the Middle East] have not succeeded yet, as for the case of [OSN and] ADM. This does not mean that the opportunity is not there.”
Whether it is Al Jazeera, ADM or another media player that gets to pursue this opportunity with the EPL will be decided very soon.