Spain’s economic crisis creates opportunity for Al Jazeera

A refusal by Span­ish com­mer­cial tele­vi­sion sta­tions to bid at cur­rent rates for rights to broad­cast next season’s top league Span­ish soc­cer match­es cre­ates an oppor­tu­ni­ty for the Qatar-owned Al Jazeera net­work to advance its push into Europe and to become the world’s pre­mier glob­al broad­cast­er.

A bid for Span­ish rights would reaf­firm Al Jazeera’s strat­e­gy of mov­ing in behind oth­er Qatar gov­ern­ment insti­tu­tions as they con­clude spon­sor­ship agree­ments and acqui­si­tions such as the win­ning of the host­ing the 2022 World Cup and in France. It would also fit with the broadcaster’s move into mar­kets such as Egypt in antic­i­pa­tion that they will gen­er­ate rev­enue at a lat­er stage rather than imme­di­ate­ly and Qatar’s strat­e­gy of employ­ing sports and media to lever­age its glob­al influ­ence.

More than any­thing else, Al Jazeera and the 2022 World Cup have put Qatar, a tiny city state, on the world map. With Al Jazeera, Qatar rewrote the Mid­dle East and North Africa’s media land­scape, which until then was dom­i­nat­ed by heav­i­ly cen­sored state-owned broad­cast­ers. Qatar’s ruler, Emir Sheikh Hamad Bin Khal­i­fa Al Thani, ignored with few excep­tions the protests of Al Jazeera’s often free­wheel­ing jour­nal­ism by var­i­ous Arab lead­ers as well as ini­tial US gov­ern­ment por­tray­als of Al Jazeera as an Al Qae­da mouth­piece.

Al Jazeera has spent an esti­mat­ed $400 mil­lion in the last year for broad­cast rights to France’s soc­cer league, the Cham­pi­ons League and Europa League, as well as some top Ger­man and Ital­ian match­es. It also con­clud­ed a $225 mil­lion spon­sor­ship deal with FC Barcelona and a mem­ber of the roy­al fam­i­ly has bought FC Mala­ga.

Al Jazeera’s oppor­tu­ni­ty in Spain emerged after the country’s major com­mer­cial tele­vi­sion sta­tions, Ante­na 3 de Tele­vi­sion SA (A3TV) and Medi­aset Espana Comu­ni­ca­cion SA (TL5), said that they would only bid in June for the soc­cer league broad­cast rights if rates were dropped by half. Reduced rates how­ev­er could put the finan­cial future of the Span­ish league in jeop­ardy with play­ers wor­ried that clubs may not be able to hon­our their con­tracts.

The Span­ish League gen­er­ates annu­al tele­vi­sion rev­enues of approx­i­mate­ly $600 mil­lion. Busi­ness Week quot­ed Ante­na 3 as say­ing that Rival La Sex­ta, with which it is merg­ing, paid $78 mil­lion for last season’s rights or just under $2 mil­lion for each of the 38 match­es.

Ante­na 3’s net income fell 14 per­cent last year while Medi­aset SpA (MS), the par­ent com­pa­ny of Medi­aset Espana, cut its div­i­dend in March after prof­it dropped more than esti­mat­ed on low­er adver­tise­ment sales, Busi­ness Week said.

“The prob­lem with sports events is that it’s good for rat­ings but it’s a finan­cial dis­as­ter,” Ante­na 3 Chief Exec­u­tive Offi­cer Sil­vio Gon­za­lez told the mag­a­zine.

Al Jazeera’s oppor­tu­ni­ty is bol­stered by the fact that the eco­nom­ics of Span­ish league broad­cast rights are com­pli­cat­ed by Spain’s eco­nom­ic cri­sis, which has seen media rev­enues decline and unem­ploy­ment rise, as well as the fact that Span­ish law requires one match a week to be aired on a free-to-air rather than a pay tv chan­nel. Com­pli­cat­ing a pos­si­ble Al Jazeera push into the Spain is the fact that each Span­ish club sells its own rights which strength­ens the nego­ti­at­ing posi­tion teams like Real Madrid and FC Barcelona.

The poten­tial cri­sis in Span­ish soc­cer has fuelled calls for the drop­ping of the legal require­ment of a free-to-air game amid a flur­ry of Span­ish and British media reports about play­ers get­ting ready to trans­fer abroad after this sea­son ends.

Britain’s The Sun report­ed that Abu Dhabi-owned Man­ches­ter City might offer $67 mil­lion for Colom­bian strik­er Radamel Fal­cao, who scored more than 25 goals for Spain’s Atleti­co Madrid this sea­son. Qatar-owned Paris Saint-Ger­main could also well try to exploit Spain’s dilem­ma.

Al Jazeera has not com­ment­ed on whether it is con­sid­er­ing bid­ding for next season’s Span­ish league rights. A bid would how­ev­er be in line with the Gulf state’s glob­al soc­cer and media ambi­tions as well as Sheikh Hamad’s proven will­ing­ness to enable Al Jazeera to suf­fer mul­ti-year loss­es as it builds its busi­ness.

The broad­cast­er, the most pop­u­lar sports net­work in the Mid­dle East and Africa with two free and 15 pay chan­nels, has acquired the rights in 23 coun­tries to the 2018 and 2022 World Cups as well as to the trou­bled pre­mier league in Egypt, where the pay TV mar­ket is still under­de­vel­oped.

Al Jazeera is expect­ed to launch a new French chan­nel in ear­ly June in time for the Euro­pean soc­cer cham­pi­onships after acquir­ing French rights in the wake of Qatar’s acqui­si­tion of Paris Saint-Ger­main.

Al Jazeera, which shares the rights with free-to-air chan­nels TF1 and M6, who as part of their pack­age will broad­cast those French match­es which have to be shown on free TV under French law, sees France as its test case for estab­lish­ing itself as a pay-TV broad­cast­er in Europe.

The broad­cast­er is also look­ing at chal­leng­ing this spring Rupert Murdoch’s BskyB for British rights to the Eng­lish Pre­mier League, at approx­i­mate­ly $3 bil­lion the world’s most expen­sive soc­cer league broad­cast rights, and could also bid for Ger­man Bun­desli­ga rights.

About The Author:
James M. Dorsey is a senior fel­low at the S. Rajarat­nam School of Inter­na­tion­al Stud­ies at Nanyang Tech­no­log­i­cal Uni­ver­si­ty in Sin­ga­pore and the author of the blog, The Tur­bu­lent World of Mid­dle East Soc­cer.