Football fans in the Middle East face missing the kick-off to the English Premier League (EPL) in August as negotiations over broadcast rights drag on, a Dubai-based TV operator has warned.
Manchester United may have clinched the trophy this season – but the winner in the Middle East media world is still undecided, amid a deadlock over fees to air EPL games.
This means that – with just three months to go until the start of the next season – fans of teams such as Liverpool, Chelsea and Tottenham Hotspur have no idea how they will be able to watch the games in this region.
“I have no basis to be confident that EPL fans will be able to watch the start of the next season,” said David Butorac, chief executive of the pay-TV network OSN.
“It would be a travesty for sports fans in this region to face dark screens during the Premier League,” he added.
OSN, which is the largest pay-TV operator in the Middle East and North Africa, is one of several networks in discussions to acquire the rights to air EPL games.
Regional television rights to EPL games were reportedly acquired in January by media broker MP & Silva, which plans to resell them to one or more broadcasters across 23 countries in the Middle East and North Africa (Mena).
But despite rumors to the contrary, MP & Silva is yet to strike a deal – and the rights allocation is now running into extra time.
Negotiations have been complicated by a backlash among regional broadcasters against the soaring cost of the rights, which fetched $360 million for the 2010-2013 seasons – a threefold increase on the previous three years.
Fadi Zouein, the Dubai-based business development director at MP & Silva, told Al Arabiya that discussions were still ongoing regarding the sale of the EPL rights in the Mena region.
“Nothing has been concluded. We are still in negotiation with several broadcasters,” Zouein said. “So far there hasn’t been any conclusion of any sort with anyone”.
That comes despite media speculation that the Qatar-based Al Jazeera Sports had won rights to carry the EPL games exclusively on its network.
Zouein played down fears that the late allocation of the rights would mean football fans would miss the start of the season.
He said MP & Silva was confident of striking a deal “at the right time”, and insisted that would leave enough time for successful bidders to finalize the broadcast logistics, along with the marketing and sale of EPL packages to consumers.
“I doubt that the screen will go blank,” he said. “These are just rumours that people are coming out with… If we weren’t confident of handling this in Mena we wouldn’t have been awarded it.”
Zouein added however that the company line, as laid down by his chief executive, was that negotiations would “keep taking place until one day before kick-off” if necessary.
The executive confirmed that MP & Silva had “approached all potential broadcasters” in the region about the potential acquisition of the rights.
These include Abu Dhabi Media (ADM) – the current holder of the EPL broadcast rights – along with Al Jazeera and OSN.
Others include Dubai TV – which is owned by the government-run Dubai Media Incorporated – along with Sharjah TV, as well as networks in Saudi Arabia and Iraq. “Our policy is to talk to everyone,” Zouein said.
Yet MP & Silva faces a tough sell in the region.
Industry sources say the cost of the regional rights to English Premier League games has become grossly inflated in recent years, making it impossible for local broadcasters to recoup their costs by selling subscriptions.
OSN held the rights during the 2007-2010 seasons of the football tournament, for which it paid a reported $120 million.
But the rights to the next three seasons were sold to Abu Dhabi-government owned ADM for almost $360 million, according to several industry sources with knowledge of the deal. That did not make for a profitable business given that ADM’s pay-TV subscriber base is below 350,000, according to several industry sources.
Butorac said the issue of spiraling rights costs had been raised during OSN’s dealings with both MP & Silva and the EPL.
“We’ve reinforced to them – as we have the Premier League themselves – the economic value of the rights,” he said. “But they’re not willing to accept that broadcasters are no longer prepared to accept losses”.
Butorac said that the previous bid was “economically unrealistic”, adding that regional broadcasters are no longer prepared to overpay for the right to screen the EPL.
“We’re prepared to bid an amount for the rights that would allow us to achieve an economic return over the length of the contract,” he said. “The broadcast rights will have to go for an amount that recognizes commercial sense, not the unrealistic levels that the rights have achieved in the past.”
Zouein – who, perhaps significantly, was previously marketing manager for the sports broadcast division at ADM – would not be drawn on whether the threefold increase in regional EPL rights was a rational scenario. “There is no exact [definition of] what is realistic and what is not,” he told Al Arabiya.
MP & Silva is said to have paid around $300 million for the rights, although Zouein said he did not know the exact figure.
That deal was part of a haul of global rights sales that is expected to bring the EPL a windfall of more than $7.9 billion for the 2013-2016 seasons.
Some in the industry have however cast doubt over whether MP & Silva – which claims an annual turnover of $350 million – would have been able to provide a bank guarantee for the rights given it does not have a buyer in place. Zouein said however that the deal between MP & Silva and the League constituted “a monetary agreement”.
With no single buyer having been confirmed, Zouein said the MP & Silva strategy was to sell “non-exclusive” rights to the EPL games to numerous Mena broadcasters. “We are not really looking at breaking it up. But we are looking at non-exclusivity,” he said.
Both ADM and Al Jazeera are strong contenders, Zouein said. But the rights could be sold to more than two broadcasters.
“We’re hoping it will be one of them or maybe both of them,” he said in reference to ADM and Al Jazeera. “Our policy is to open it up to non-exclusivity. It may be three or four [broadcasters].”
Abu Dhabi Media declined to comment when contacted by Al Arabiya. Al Jazeera did not immediately respond to a request for comment.
Despite the strategy of selling non-exclusive rights, which some in the industry say would not be commercially viable, MP & Silva has not ruled out selling the rights to a single bidder. But this would only happen, said Zouein, if the money offered was “really crazy”.
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