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Wednesday, June 22, 2011

Al Jazeera bids for French soccer broadcast rights

Arles Avignon plays against FC Sochaux during one of  French Ligue 1 matches. (File Photo)

Arles Avignon plays against FC Sochaux during one of French Ligue 1 matches. (File Photo)
Qatar-owned broadcaster Al Jazeera, despite lacking an appropriate platform, is bidding in an auction for the rights to broadcast live French professional soccer matches.

Al Jazeera emerged as a surprise bidder for the rights to broadcast French Ligue 1 matches.

To compensate for its lack of a platform, Al Jazeera is discussing with France Telecom’s Orange TV the possibility of buying Orange’s sports channels or establishing a joint venture with the French broadcaster.

Orange is believed to be bidding exclusively for the Ligue 1 mobile broadcast rights.

The bid for the French rights is part of Qatar’s effort to leverage soccer as a political and business tool. Earlier this year Al Jazeera won the right to broadcast the 2018 Russia and 2022 Qatar World Cups in the Middle East and North Africa. A Qatari fund linked to the Gulf state’s royal family last month took a 70 percent stake in Paris St-Germain, a Ligue 1 club.

Al Jazeera acquired the right to air the World Cups via cable TV, satellite, terrestrial, mobile and broadband in 23 territories and countries in the first broadcast-rights deal to be struck since world soccer body FIFA’s controversial awarding to Qatar of the right to host the 2022 tournament.

FIFA never disclosed what Al Jazeera paid for the broadcast rights, but in 2009 Al Jazeera spent a reported US$1 billion for the rights for the sports content broadcast by Arab Radio and Television, which included the FIFA World Cup in 2010 in South Africa and the 2014 tournament to be played in Brazil.

Al Jazeera ran into problems during last summer’s South African World Cup when viewers across the Middle East and North Africa experienced interference during several games, including pixelated images, blank screens and commentaries in the wrong language. The disruptions were reportedly traced to Jordan where hackers were believed to have deliberately disrupted the broadcasts. Al Jazeera charged that the disruptions constituted “space terrorism.”

An Al Jazeera spokesman declined to comment on the French bidding processes, but said it was bidding independent of the Qatari government.

By distancing the government from the bid, Al Jazeera was attempting to shield itself from any fallout from allegations that Qatar bribed FIFA executive committee members to wins the rights for the 2022 World Cup.

The allegations have thrown FIFA into the worst crisis in its 107-year history. Qatari national and Asian Football Confederation (AFC) chief Mohamed Bin Laden was suspended last month on charges that he had bribed Caribbean soccer officials to support his failed challenge to FIFA president Sepp Blatter in the organization’s presidential election earlier this month. Mr. Bin Hammam was closely associated with the Qatari World Cup bid. FIFA vice president Jack Warner, who was also suspended last month, resigned this week.

Former AFC general secretary Peter Velappan called in an interview with Associated Press on Tuesday for Mr. Bin Hammam to step down as the head of the Asian soccer body. Mr. Bin Hammam has temporarily stepped aside pending the outcome of a FIFA investigation.

“He should just resign because of the allegations. It would be good for football. This has been going on for so many years. He should follow Warner, strike a deal with FIFA and say goodbye,” Mr. Velappan said.

Meanwhile, the head of Germany’s football federation, Theo Zwanziger, called on Wednesday for FIFA to re-examine the awarding of the tournament to Qatar.

“I think there is a significant degree of suspicion that one cannot just dismiss. And that is why I reckon that the awarding of this World Cup must be re-examined with regard to these concerns,” Mr. Zwanziger told German broadcaster ZDF.

Al Jazeera’s bid boosts La Ligue, which was seeking to compensate for the fact that Canal Plus is likely to pay less than the $662 million a year it had forked over in the last auction four years ago. Canal Plus, which had until now a monopoly on the La Ligue rights, expects to surrender that monopoly for the period from 2012 to 2016.

La Ligue has also been hit by dropping crowd attendance and a depressed transfer market.

La Ligue is expected to announce the outcome of the auction of broadcast rights on Friday.

Al Jazeera’s push into expanded sports broadcasting comes as commercial broadcasters in the Middle East accuse state-owned networks of distorting competition by paying absorbent for monopoly rights to broadcast major soccer events.

Critics of the state-owned broadcasters point to last year’s awarding of the exclusive rights to air the UAE Premier League to government-owned Abu Dhabi Media Company in a three-year deal believed to be worth $300 million.

“There are people who are paying for sports rights in this market that have no commercial imperative to make money,” David Butorac, CEO of Orbit Showtime Network (OSN), a major commercial pan-Arab satellite network that has lost bids for soccer broadcast rights, said at the time.

Showtime is a joint venture between Kuwait Projects Company (Holding), which has interests in finance, insurance, real estate and telecommunications and Saudi investment company Mawarid Holding.


“The issue with sports rights is this market, is the sports rights have gone for uneconomic rates. The people who own the Premier League today cannot make money for what they’ve paid,” Mr. Butorac said.

With long-standing popular discontent exploding into anti-government protests on the streets of Arab capitals after having bubbled under the surface for years, profit may not be state-controlled broadcasting’s primary objective.

In a soccer-crazy region dominated by authoritarian regimes that do not brook dissent, controlling soccer rights is a key tool in attracting viewers to what are often networks with little credibility.

In many ways, Al Jazeera’s push and the criticism of state broadcasters are indications that Middle Eastern soccer is moving towards professionalization and creation of value.

“Something is moving,” said Santino Saguto, an Italian soccer management consultant based in Dubai. “Qatar 2022 has prompted the region to discuss ways to create value. The leagues, the football associations and the media are starting to buy into the concept. That’s how it started in Europe.”

The UAE’s marketing of soccer broadcast rights constitute a rare instance in which a Middle Eastern league sold such rights -- a key step in generating revenue and creating value. The UAE example is reportedly being closely looked at by Saudi Arabia, the region’s most important league beyond Egypt. Similar moves were afoot in Egypt prior to this year’s toppling of President Hosni Mubarak.

However, it may take a strong-willed broadcaster to shape a market that is still dominated by free-to-air channels, slow in the uptake of pay-TV and suffering from large-scale intellectual copy piracy.

“It was the same in Europe until BSkyB forced issues with the introduction of its decoders,” Mr Saguto said, cautioning it took BSkyB several years to break even on its investment.

Rupert Murdoch, the media baron on the verge of acquiring BSkyB and backed by his alliance with Saudi Arabia’s Rotana, owned by the Saudi billionaire Prince Alwaleed bin Talal bin Abdulaziz Al Saud, could drive the change needed in the Middle East to create value in football.

Similarly, one reason Qatar was believed to have been interested in acquiring Manchester United was the club’s pioneering success in creating value on and off the pitch.

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