Qatari-Funded Turkish Soccer League Set to Take Hit from Piracy

(Bloomberg) --

A key source of revenue for Turkish soccer clubs may take a hit in an upcoming broadcasting tender, with potential bidders blaming widespread piracy in the country after the pandemic already slashed value in the sports pay-TV market across Europe.

The new round of bids may fall well below the $360 million that the current holder of the rights, Qatar's BeIN Media Group, is paying Turkey's football federation this year, said people with knowledge of potential offers, who asked not to be named because the deliberations are confidential.

The new price will reflect the market correction due to rampant piracy that the government has failed to contain, the people said. The level of piracy in Turkey, which has a population of around 85 million, is such that there are two people illegally watching sports for every person with a legal subscription, according to a BeIN Media investigation finding.

Concerns about the Turkish auction come amid a controversy around plans by the world's richest soccer clubs to start a breakaway league as an alternative to Europe's prestigious UEFA Champions League -- a move that could herald the sport's biggest shakeup in decades and make elite teams even wealthier.

European Soccer Group Proposes Radical Breakaway League (4)

Turkey's heavily indebted soccer clubs, including Istanbul's Fenerbahce and Galatasaray, depend on income from the broadcast rights to help manage their finances. Turkey's top four clubs, also including Besiktas and Trabzonspor, signed a debt-restructuring deal with banks last month. As of January, they owed a total of $893 million, about three times their annual revenues.

Piracy Watchlist

Turkey is notorious for piracy in various sectors, ranking second after China in an OECD report from 2016 in the number of seizures of counterfeit and pirated goods. The U.S. placed Turkey on a watch list last year.

The Qatari firm has been the licensor of the rights for five years since the 2017-2018 season in Turkey through its unit Digiturk, which it bought in 2015. The operator has more than 2.5 million subscribers for entertainment content, with more than half of them signed up to sports channels including live games of the top soccer division Super Lig, according to data from the telecommunications regulator.

The federation will have an auction by December to sell the broadcasting rights for a probable period of five years from the 2022-2023 season and last week picked a commission of executives and club chairmen to manage the process. The commission will determine terms of the tender as well as the time of the auction.

BeIN Media, which operates in 43 countries, and Saran Group, an Istanbul-based media-to-aviation holding, are considering bidding in the new round, said the people. There are other local and international potential investors who've shown interest in bidding for the entire package or for sub-packages to be offered, according to a Turkish Football Federation executive, who asked not to be named citing institutional policy.

BeIN, Saran and the TFF declined to comment.

Super League

Concerns surrounding the Turkish clubs' future revenues highlight the changing future of football teams might try to boost income. The Super League proposal is crumbling after the six English clubs involved all pulled out of the project late on Tuesday but the idea shows world's richest clubs are fretting over the sustainability of their current business model.

BeIN Media, which won't bid for rights to Champions League broadcasting in Turkey, is paying the country's federation around $360 million for this season, a number adjusted for currency fluctuations and inflation from the original deal of annual $500 million.

Payments to leagues across Europe have been slashed as broadcasters including DAZN Group Ltd., the sports-streaming startup and backed by billionaire Len Blavatnik, France's Canal+ and IMG Worldwide Inc. have been struggling with the impact of the virus outbreak and pursuant lockdowns.

Comcast Corp.'s Sky, DAZN and other media companies collectively pay more than 6 billion euros ($6.7 billion) a year to show Europe's most prestigious teams in action.

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