Un­even play­ing field in sports broad­casts

The National - News - - BUSINESS - KHALID BASYUNI Khalid Basyuni is an ex­pert in re­gional sports me­dia rights and man­ag­ing di­rec­tor at MP & Silva

The Mid­dle East’s foot­ball-hun­gry au­di­ence has had many hosts in past years to feed its crav­ings. From Show­time (now OSN) and ART, to Abu Dhabi and Dubai Sports chan­nels and beIN Sports. But it’s at this point in the jour­ney we hit a road­block in the va­ri­ety of choice that is on of­fer to a Mid­dle East fan and in­stead, we regress.

Ever since beIN Sports emerged in the mar­ket, and cou­pled with its ac­qui­si­tion of ART Sports, the chan­nel has adopted a bullish and ag­gres­sive strat­egy en route to sports me­dia dom­i­nance.

With the ben­e­fit of be­ing a cash-heavy busi­ness, beIN en­gaged the strat­egy know­ing it would have to write cheques to rights hold­ers far more ex­pen­sive than pre­vi­ously, in­flat­ing the rights fee mar­ket in this re­gion.

This quickly made the Mid­dle East mar­ket a prof­itable re­gion for these rights hold­ers, of­ten sec­ond only to the leagues’ own home mar­kets. In turn, sports broad­cast­ing in the Mid­dle East be­came less fea­si­ble to sus­tain.

From a busi­ness point of view, beIN can­not be called a mo­nop­oly since much of its com­pe­ti­tion is still in busi­ness due to their state back­ing. But it seems to have cre­ated an aug­mented mo­nop­oly in which it is the only or­gan­i­sa­tion able to com­pete at the mar­ket price for rights that it has set.

What the sports fan in the Mid­dle East de­serves is a healthy and com­pet­i­tive land­scape of broad­cast­ers to meet de­mand. This, af­ter all, is an au­di­ence that in­vests con­sid­er­ably – whether from time and ef­fort, with matches of­ten tak­ing place at un­favourable times in the day (the Cham­pi­ons League, for ex­am­ple, typ­i­cally kicks off around mid­night on a work­ing day), or from spend­ing money on mer­chan­dise and trips to the var­i­ous cities to watch their beloved teams.

A health­ier, more com­pet­i­tive mar­ket only el­e­vates the stan­dard of the broad­cast ser­vice of­fered be­cause net­works are obliged to in­vest more care and ef­fort into each prop­erty. This can be through mar­ket­ing of the leagues as well as the over­all match­day ex­pe­ri­ence to main­tain their com­pet­i­tive edge over ri­vals.

The best ex­am­ple of this is the sports broad­cast­ing land­scape in the US. Across the four ma­jor Amer­i­can sports (pro­fes­sional bas­ket­ball, foot­ball, base­ball and hockey) the rights are spread across nine dif­fer­ent broad­cast­ers, all ex­ist­ing in tight com­pe­ti­tion and in turn of­fer­ing the Amer­i­can sport con­sumer many op­tions.

Be­cause of the in­creased ac­qui­si­tion costs for broad­cast rights, beIN has ex­plored al­ter­na­tive rev­enue op­tions to re­coup some of these. This usu­ally comes in the form of TV ad­ver­tis­ing, an in­dus­try that is in de­cline, or sub­scrip­tion fee in­creases. This has made the mar­ket vul­ner­a­ble to piracy, as au­di­ences cut the ca­ble cord if the cost ex­ceeds their bud­get.

Whether or not you agree with beIN’s tac­tics, it is ob­vi­ous that piracy isn’t the so­lu­tion.

Piracy neg­a­tively af­fects the sports in­dus­try in sev­eral ways. The first is that it does not en­force to the con­sumer the value of in­tel­lec­tual prop­erty. BeIN has paid for the right to own the con­tent of games for the du­ra­tion of the con­tract. Sup­port­ing or turn­ing a blind eye to piracy em­pha­sises con­sumers’ dis­re­gard for the true owner of this con­tent. One trou­bling con­se­quence is fans re­fus­ing to ac­cept a foot­ball club’s in­tel­lec­tual prop­erty and buy­ing fake mer­chan­dise such as jerseys.

Piracy also nor­malises the idea that sports view­ing can and should be free across any plat­form – even live. Lo­cal fans are in­creas­ingly averse to pay­ing for tick­ets to matches, with many leagues re­port­ing dwin­dling spec­ta­tor num­bers year-on-year.

Along with the fail­ure of pay-per-view prod­ucts to gain a foothold in the re­gion, and a lack of dig­i­tal op­tions for watch­ing on a smart­phone or tablet, piracy is lead­ing to mar­ket con­di­tions that ul­ti­mately de­value sport as a sig­nif­i­cant sec­tor. Un­til the broad­cast in­dus­try works to­wards chang­ing, then sport will be con­sid­ered a sec­ondary, if not ter­tiary, sec­tor.

Since piracy is not the so­lu­tion, the first step to­wards a so­lu­tion would be an or­ganic re­ver­sal of the aug­mented mo­nop­oly that beIN has cre­ated. Where one of the pre­vi­ously men­tioned en­ti­ties may not be able to com­pete with beIN’s power alone, there is strength in num­bers.

A work­ing part­ner­ship be­tween some, with one po­ten­tially tak­ing all the Satur­day matches and an­other all the Sun­day matches for ex­am­ple, or one en­tity tak­ing the live matches and an­other tak­ing the high­lights, can lead to the sud­den break in the stran­gle­hold beIN sports has on sports broad­cast­ing.

This, how­ever, is a longterm strat­egy and should not be used to strip beIN of all its rights at once, since that would only lead to a mo­nop­oly in the other di­rec­tion. But it should be a strat­egy formed to be able to com­pete and cre­ate a fair mar­ket­place.

A multi-broad­caster ap­proach is one that the in­ter­na­tional sports fan is used to, with the likes of ESPN, FOX, NBC Sports in the US and Sky, BT Sports and more re­cently Eleven Sports in the UK, all able to suc­cess­fully co-ex­ist glob­ally. There shouldn’t be an is­sue in broad­cast­ers co-ex­ist­ing in the Mid­dle East, for the ben­e­fit of fans and the sports we love.

Fans are in­creas­ingly averse to pay­ing for match tick­ets, with many leagues re­port­ing lower at­ten­dances

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