It was one of the biggest media purchases of 2009, although results will not be seen for at least another three to five months. Al Jazeera Sports, part of the region’s largest and most popular satellite operator Al Jazeera, has bought the rights to Arab Radio and Television’s (ART) sports content, including this year’s FIFA World Cup.
That might not sound like such a big deal, but is in fact estimated to be worth more than $1 billion!
The landmark deal, which makes Al Jazeera the dominant regional player in sports broadcasting, is the second major consolidation between Middle East pay-TV providers in the last twelve months, following the merger between Orbit and Showtime last July. According to officials at ART, that merger was part of the decision to sell content to Al Jazeera. Financial pressures from the recession made the decision even easier.
ART was the largest sports rights holder in the region until the sale, with a portfolio that included the FIFA World Cups for next year and 2014, the African Cup of Nationals from next year to 2016, and an array of league championships throughout the region, including the Saudi League and national team matches. Those rights will shift to Al Jazeera, with the exception of the Saudi League (ART is owned by Sheikh Saleh Kamel, a Saudi billionaire, and the contract for league TV rights requires them to go to a Saudi company).
ART will distribute Al Jazeera Sport Channels +1 to +8 “on a non-exclusive basis”, and although Al Jazeera will still have the option of selling its own smart cards, industry observers believe it makes sense for Al Jazeera to leave the distribution game to ART. The company recently made a major investment in new encryption technology for its smart cards, and has an extensive network of offices throughout the region to service them.
Some fear that ART and Al Jazeera joining forces will eliminate rights holders’ ability to pit them against each other in bidding wars, with potential costs to the consumer. On the other, concentrating so much sports broadcasting power in one place gives Al Jazeera a stronger position when setting prices for its packages.
For the time being, it seems as though conglomeration has won out again.
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