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Omdia view

Allen. Ashley. Azevêdo. Bin Musa’ad. Bin Salman. Dowden. Knight. Masters. Obaidly. Rumayyan. Tilliuex.*

No, not a soccer dream team. These eleven are the stakeholders, influencers, and key players in what is—insofar as global TV piracy is concerned—the most important proposed company acquisition in history. What is at stake could hardly be more significant: how sports rights will be awarded in the future; how state-sponsored piracy will be combated; how deeply content creators and operators will invest and collaborate in conditional access and security; and the ethics of awarding lucrative rights to those who are perceived to be responsible for weakening their competition through piracy when sports rights are up for auction.

The majority of reputable news outlets and sports organizations have pointed an accusing finger at actors within the Saudi Kingdom as being responsible for BeoutQ piracy, which started operations in 2017, coinciding with the Saudi-led boycott of Qatar. Condemnation for the pirate activity came thick and fast from almost every major sporting body, as Saudi Arabia repeatedly denied any responsibility.

In the interim, the legitimate major rights holder and sports broadcaster in MENA, Qatar-headquartered beIN, suffered financially: It was forced to drop some rights, cut back on its workforce, and start providing some content for free. In the midst of this, the COVID-19 pandemic has dealt another cruel blow to beIN as global sporting events have been severely impacted. In the same piracy crisis, MENA’s pay-DTH broadcaster OSN has suffered from BeoutQ piracy as well and is now seemingly making plans for a transition to an OTT-only model. As a result, the Arab MENA pay-DTH industry has suffered, with regional revenue collapsing by a quarter over three years, from a high of $478 million in 2017 to a projected $355 million for 2020, according to Omdia forecasts.

News emerged in mid-2019 that PFI, the Saudi investment fund, was interested in purchasing English Premier League (EPL) soccer team Newcastle United (NUFC). Omdia intelligence shows that new BeoutQ pirated boxes, designed to weaken beIN as a regional broadcaster, had stopped being “shipped” in the autumn of 2019. Knowing the soccer club acquisition would attract enhanced regulatory checks in the UK, and with the Saudi state itself effectively being scrutinized as a “fit and proper person” to take over an English soccer club, the timing of the cessation suggests that those responsible for initiating BeoutQ were put on notice to stop the production of new pirated boxes, as the greater interest for the Saudi state was now for piracy to be curtailed.

In what has become an unusually protracted process, there are many elements to the Newcastle United acquisition that are being considered before any decision can be made. These include the ethical concerns of the deal (in relation to both piracy and human rights), corporate representations made to the parliamentary committee scrutinizing the deal (not least from beIN, which is strongly opposed to it), and the Saudi state’s indirect relationship to another English club, Sheffield United.

If NUFC’s ownership does transfer to Saudi Arabia, then the “kill switch” to all BeoutQ boxes in circulation will almost certainly be enacted, which is what the EPL intended to convey last week during its parliamentary hearing on the takeover. Furthermore, the coming years will see an almost guaranteed fragmentation of sports rights across MENA, with a now weakened beIN in a battle against a financially capable (but yet unknown) Saudi-friendly entity bidding for the same sports rights on a regional and/or country-by-country basis. However, if the EPL decides not to allow NUFC’s ownership to transfer to the Saudis, then it might be a symbolic win for Qatar and the question of human rights may have been assuaged; critically however, no BeoutQ kill-switch will be pushed, and TV piracy will continue to plague MENA and beyond.

With every other sporting organization in the world is following its imminent decision closely, and with the delicate balancing act between its own ethical responsibilities and its commercial interests, the EPL is between Scylla and Charybdis. But for the TV industry at least, the outcome of the proposed Saudi acquisition of Newcastle United will answer important corporate, commercial, and copyright questions that will impact the future of sports rights block buying, global piracy and TV competition dynamics for the next decade.

* Kate Allen (Amnesty UK). Mike Ashley (Newcastle United FC). Roberto Azevêdo (WTO). Abdullah Bin Musa’ad (Sheffield United FC). Mohammad Bin Salman (KSA Government). Oliver Dowden (UK Government). Julian Knight (DCMS Committee, UK Parliament). Richard Masters (English Premier League). Yousef Obaidly (beIN). Yasir Rumayyan (Public Investment Fund, KSA). Patrick Tilliuex (OSN).

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