Counting down to the EPL finale

This column has been authored by Nick Grande, MD of ChannelSculptor, a strategic consultancy providing services to MENA media businesses, international broadcasters and content owners since 2008. BroadcastPro Middle East has worked in conjunction with ChannelSculptor as strategic consultant on the ASBU BroadcastPro Summit. 

A few months ago, I wrote an article for BroadcastPRO magazine suggesting that Al Jazeera and the Abu Dhabi TV network should work in partnership to jointly secure exclusive MENA TV rights for the English Premier League. At the time, there was a great deal of speculation over Al Jazeera’s intentions regarding UK TV rights for the EPL, and whether they were planning to go up against BSkyB and ESPN.

With all the hype surrounding Al Jazeera, it seemed inevitable that they would pick up the MENA television rights almost as an afterthought to their UK ambitions. But then in June, BT surprised everyone by securing all the second-tier rights alongside BSkyB, and we were left wondering if Al Jazeera had simply been sabre rattling. During the UK announcement, Richard Scudamore, CEO of the EPL hinted that all regional rights deals would be concluded by September 2012. That always looked like a very tight deadline so soon after Ramadan, and in fact there is no sign yet of a deal having being done for the MENA region.

Now that the dust has settled on the UK rights, the picture for MENA rights looks less clear. As things stand, I remain convinced that the best outcome for both Abu Dhabi and Doha would be a joint deal, but even the most optimistic strategist would have to admit the chances of this are remote.

I thought it would be interesting to look at this auction from the EPL’s perspective for a moment.

There seems to me to be one clear reason why the EPL might choose to work with Al Jazeera Sports: money. Of course both bidders have huge financial resources, and Abu Dhabi has a significant interest in the premiership through Manchester City football club, but how much do they really need the TV rights? Abu Dhabi benefits every time Manchester City plays, regardless of which TV network broadcasts the game. By contrast, in the lead-up to the World Cup 2022, Doha seems to be on a mission to see its logo on all football in the region and (where possible) beyond. Only three years ago, Al Jazeera reportedly spent well over $1 billion on FIFA World Cup rights for the region. EPL is the biggest domestic football league in the world, and would be a big jewel in the Al Jazeera crown. They will surely bid aggressively to complete their TV monopoly on the beautiful game.

Against this, I can see three compelling reasons why the EPL should work with Abu Dhabi.

Firstly, they should look at the excellent brand positioning they have received from Abu Dhabi TV over the last three years, and ask how this will compare with being positioned in a network that also includes the Italian Serie A, La Liga, the Champions League, most South American competitions and various Arab leagues. Al Jazeera is brilliant at marketing brands: Al Jazeera brands. Premium sports events are a vehicle for placing and maintaining the Al Jazeera emblem at the top of the television tree in the Arab world and beyond. By contrast, the Abu Dhabi TV network promotes the EPL in the region in order to grow its pay television offering. At times in the last two years, one would have been forgiven for believing that there was nothing on the Abu Dhabi TV network except the Barclays Premiership. This is hardly a bad branding position from the perspective of the EPL.

The second critical reason why the EPL should think twice before partnering with Al Jazeera is the protection of their European revenue streams. Satellite customers need only buy a smart card for around $75 a year to receive the Al Jazeera sports offering. To my knowledge, around the world, there is no other (legal) service that can compete with Al Jazeera’s pricing, and smart cards travel light. Grey market sales of Al Jazeera smart cards outside the MENA region into the Mediterranean will inevitably increase if the Premiership is available as part of the package. Abu Dhabi TVs Pay-TV offering is only available on a Humax set top box embedded with secure silicon, and paired with an IRDETO smart card. It’s a lot harder and more expensive to move set top boxes across borders than it is to move smart cards.

The third and perhaps most important reason why the EPL should stay put is the 10-year picture. If Abu Dhabi loses the EPL, the Abu Dhabi Pay-TV network will effectively move away from football and might well shut down altogether, as is as it has been completely built around the EPL offering. A bidding war between these two rivals might yield over $500 million this time around, but there will be no bidding war in three years if there is no Abu Dhabi Pay-TV network. The desire to make a profit (something ADTV and Al Jazeera seem less worried about) precludes other Pay-TV businesses such as Orbit Showtime from offering anything more than $150 million for these rights, which means that Al Jazeera would be in a position to name their price.

Over the past 15 years, EPL rights deals in the region have almost always been controversial, and in many cases completely unexpected. I have painted a picture of a straight bidding war between two sovereign-backed broadcasters, but there are other possibilities. In particular, I should not rule out the possibility of interest from overseas. News Corp already owns around 20% of Rotana Media Group and 50% of Moby Group, and Sky News Arabia is a 50/50 partnership between BSkyB and Abu Dhabi. Viacom exited its 20% stake in Showtime in 2009, but perhaps the EPL auction could see another international network gaining a Pay-TV foothold in the region.

As I write this, the EPL’s 2013-16 choice may well already have been made. The EPL has proved in the UK rights auction that money talks, but here in the Gulf the highest bidder is not necessarily the right partner.