Trouble in the Middle East

Saudi Flag

Formula 1 seems to have become involved in a long-running and acrimonious battle between sports channels operating out of the Middle East.

On one side we have beIN Sports, a global network of sports channels that currently operates in the Middle East & throughout the world.

The other protagonist is beoutQ a pirated pay-television broadcaster serving Saudi Arabia.

beIN had a contract to broadcast F1 from 2013 to 2018 worth an estimated $200m. beIN complained that beoutQ had effectively forced them out of business by the unauthorized redistribution of their content.

The background was the diplomatic spat between Qatar and other Arab countries over Qatar’s alleged support of terrorist groups. Since June 2017 beIN was hampered in its broadcasting in Saudi Arabia. beoutQ was subsequently launched in 2017 and allegedly started to pirate beIN’s content.

The situation deteriorated for beIN when in August 2018 it was fined $2.6m by Saudi Arabia for violations of competition law including forced bundling of its services with other unrelated channels. beIN hit back accusing Saudi Arabia’s actions as being politically motivated. The consequence was a couple of days later, beIN Sports’ license to broadcast in Saudi Arabia was officially revoked.

The piracy issue contributed to the redundancy of 300 beIN employees in June 2019.

beIN chief executive Yousef Al-Obaidly said:

“Every Formula 1 grand prix of the 2019 season was available illegally through Saudi Arabia’s beoutQ IPTV function across the whole of the Middle East, North Africa, and the world-destroying the value of the rights. The fact F1 seemingly overlooks this is remarkable from a long-term business perspective.”

At an October 2019 conference in London beIN Media Group CEO Yousef Al-Obaidly accused sports rightsholders of not taking enough steps to stifle the unauthorized redistribution of their content through platforms such as beoutQ and others. He predicted that the sports media rights market could crash, since “we now live in a world where exclusive broadcast rights are, effectively, wholly non-exclusive”.

The issue has stayed in the headlines with the Saudi Public Investment fund launching a £300m takeover of Newcastle United football club in April. Many premier league clubs have voiced their opposition to the takeover as they are angry with the failure of the Saudi state to deal with TV station beoutQ, which is also illegally pirating Premier League games.

The issue is in the hands of the World Trade Organization after Qatar raised a complaint of intellectual property rights theft arguing that beoutQ is a Saudi state operation. The WTO is due to publish a 130-page report in the next two weeks and it is anticipated the ruling will establish that it is the Saudi government who is behind beoutQ.

To date, Liberty Media has refused to comment.

Is this because Formula 1 was in secret negotiations (now completed) for a multi-year partnership deal with Saudi Arabian state energy and chemicals giant Aramco, as well as talks over the possibility of a Saudi GP? Surely not!

On the surface, it would seem beIN is the aggrieved party but in a twist to the story, beIN may also have been involved in wrongdoing over sports rights.

In February, the chairman of beIN one Nasser Al-Khelaifi was charged by Swiss prosecutors in connection with the award of television rights for the Football World Cup and Confederations Cup. Also charged with accepting bribes, aggravated criminal mismanagement, and falsification of documents was former FIFA secretary general Jerome Valcke.

Swiss prosecutors OAG issued a statement saying,

“Al-Khelaifi and a third person, an unnamed businessman, were charged with inciting Valcke to commit aggravated criminal mismanagement.”

Al-Khelaifi described the charge against him as a “technical charge” and said he expected it to be proved as “completely groundless.”

“The charges have not – and have never had – any basis whatsoever, either in fact or law.”

The OAG statement said that between 2013 and 2015 Valcke exploited his FIFA role “to influence the award of media rights” for various World Cup and Confederations Cup tournaments “to favour media partners that he preferred.”

Interestingly the 2022 world cup was awarded to Qatar.

Innocent until proven guilty but watch this space.

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