BeIN Media benefits from lira depreciation
The football industry is growing both in terms of investments and profit. However, the earnings of football clubs in countries where the currency is devaluating against the dollar, like Turkey, were lower at the end of the year than estimated.
Turkish football witnessed the signing of a landmark agreement at the end of 2016. Digiturk, now part of the Qatar-based beIn Media group, purchased broadcasting rights for 5 years in exchange for an annual payment of $500 million + VAT, about 50 percent higher than the previous tender Digiturk received. Since it broadcasts from 38 countries around the world, beIn’s entry into the Turkish market was an important step in terms of the branding of Turkish football leagues. The Turkish football industry also received a cash infusion through broadcasting rights of $2.95 billion, including VAT, over 5 years.
According to the tender agreement, 4 percent will be paid to the Turkish Football Federation, totaling $20 million. The remaining $480 million will be paid to football clubs. The clubs in the 1. League are expected to receive a total of $35-40 million in accordance with the 50 percent increase over the last tender. The remaining $440 million will go to Super League clubs.
Dollar rate was f xed at 3.26
BeIn Media will make half of the payment in Turkish lira and the other half in dollars. The exchange rate was fixed at 3.26-3.36 according to the quote in the tender specifications. Accordingly, the publisher will not be affected by the increase in the dollar against the lira.
But the damage to the clubs is big. $220 million of the $440 million total to be paid to the Super League clubs will be paid in lira. The publisher will pay $717 million if the dollar rate is fixed at 3.26. However, the dollar rate was 4.48 on May 19, which is the closing date of the league. The amount to be paid according to this rate should be TRY 985 million, a loss of TRY 268 million. When the 1. League teams are included, the total loss in revenue of all clubs is TRY 293 million.
The clubs, on the other hand, make their payments according to current currencies. Particularly for the four big clubs, salaries not only of foreigners but also many local players are paid with in euros and dollars. In short, although the revenues are fixed, the expenses of the teams are increasing due to the exchange rate increase.