World Cup TV Rights Dispute Prompts FIFA to Attack Pirates

(Bloomberg) -- A row between Saudi Arabia and Qatar over illegal broadcasts of the World Cup looked like a sideshow in their yearlong political standoff. Then it posed a threat to a multibillion dollar business.

Television channel beoutQ has been pirating premium sports content and beaming it mainly around the Middle East. Qatar, whose network beIN Sports holds the rights to the soccer games, tennis matches and motor races, said Saudi Arabia is behind the operation. The Saudi authorities denied the allegation and accused the Qataris of a smear campaign.

But away from the trading of accusations, sports organizations are now mobilizing to protect their interests. World soccer governing body FIFA said on Wednesday it would take legal action in Saudi Arabia and is working with other owners of sports rights. It didn’t say who it planned to sue.

“FIFA urges the authorities of Saudi Arabia and of the different countries where these illegal activities have been observed to support us in the fight against piracy,” it said in a statement. The Saudi government welcomed the action and said it would reinforce its “relentless efforts” to combat beoutQ’s activities.

The Spanish league said last week it loses 400 million euros ($469 million) a year to piracy and vowed to take action against beoutQ. Global tennis associations described the channel on July 5 as an “industrial-scale illegal piracy.” That was after European soccer body UEFA called on authorities to use “all their power” to shut it down.

Selling television rights is the biggest money-spinner for sports competitions from the English Premier League to the NFL. Combined broadcast revenue for Europe’s top five soccer leagues is worth almost 8 billion euros a year.

Failure to act against piracy could mean less money down the line as networks seek compensation or negotiate lower fees, said Marc Ganis, head of the Chicago-based sports business company Sportscorp. “The risk increases significantly the greater the piracy becomes and the more financially attractive markets they penetrate,” said Ganis.

World Cup TV Rights Dispute Prompts FIFA to Attack Pirates

BeoutQ started online in August 2017 and satellite broadcasts began the following month. It’s backed by Colombian, Cuban and Middle Eastern investors, according to an earlier version of its website.

The channel shot to prominence in the Middle East in May when it streamed the UEFA soccer Champions League final between Real Madrid and Liverpool in the region, appearing to be a play on the beIN name.

BeIN Sports already has been hit by Middle East politics after Saudi Arabia and three of its allies severed diplomatic, trade and transport links with Qatar in June 2017, accusing the gas-rich peninsula of sponsoring terrorism. Qatar, which is set to host soccer’s World Cup in 2022, says the boycott is an attempt to subvert its sovereignty.

Profit in the region over the past year was 17 percent lower than projected because of the boycott and piracy, said Tom Keaveny, managing director for the Middle East and Africa at beIN Sports. He didn’t provide more details.

BeoutQ has “opened Pandora’s box,” said Keaveny. “If it’s possible to steal from us, it’s possible to steal from any broadcaster or rights holder in the world.”

FIFA’s move comes just days before Sunday’s World Cup Final between France and Croatia. Despite the pirates, beIn said 1.14 billion cumulative viewers watched the first 12 days of the tournament, up about 100 million since 2014. The next World Cup, in 2022, is scheduled to be held in Qatar where beIN Sports is based.

Sophisticated

Indeed, beoutQ was widely available in Saudi Arabia in the months leading to the World Cup. It was also seen streaming at restaurants and public venues during the tournament.

“The case of beoutQ is especially troubling due to the unparalleled sophistication and the extensive period of time over which the commercial-scale theft has been allowed to continue,” the world’s tennis governing bodies said on July 5, describing beoutQ as being based in Saudi Arabia.

The Saudi government has denied any link to the channel and said it has confiscated thousands of devices used to stream content illegally.

Satellite television provider Arabsat carries BeoutQ. While headquartered in Riyadh, Arabsat is an entity affiliated with the Arab League and established by 22 members, the Ministry of Media said in a statement. BeoutQ, it said, is also available in other countries.

“Suggesting that the Kingdom of Saudi Arabia is in any way complicit in beoutQ’s operation both offends the Saudi people and is a malicious lie,” it said. Arabsat didn’t answer an email seeking comment.

With beoutQ’s illegal broadcasts largely confined to the Middle East, the impact on revenue globally may remain limited. But entities such as FIFA are under more pressure to stamp out piracy, even if that means upsetting potential investors.

“Whichever way they go will be construed as them making a political statement,” Simon Chadwick, professor of sports enterprise at the Salford Business School in England. “FIFA is stuck between a rock and a hard place.”

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