Qatar-based pay-TV broadcaster BeIN Sports has decided not to renew its five-year contract with Formula One, stating that the ongoing fight against piracy in Saudi Arabia will have a “natural consequence” on the rights it chooses to buy.
The Liberty Media-owned motorsport series is now searching for a new broadcaster in the Middle East and North Africa (MENA).
The decision is a consequence of the drawn-out battle between BeIN and pirate broadcaster BeoutQ, which has been stealing BeIN’s content for more than a year and is now the subject of a US$1 billion international investment arbitration brought against Saudi Arabia last October.
Tom Keaveny, BeIN’s managing director in the region, said that the company will “pay less” for broadcast rights in the future in an effort to combat “industrial-scale theft” carried out by the Saudi group.
“A rights holder’s stance on beoutQ’s piracy – in other words whether they’re taking legal action, making a public stand, and doing everything within their power to combat the industrial-scale theft of their rights – is a critical factor that we’re now considering when bidding,” Keaveny said.
“We pay enormous amounts for media rights, but the natural consequence of Saudi Arabia’s piracy is that those rights cannot be protected so we will pay less for those rights in the future – in particular to the rights holders who pay only lip service to combatting BeoutQ.
“We have been warning of the very real commercial consequences of BeoutQ’s theft of world sport and entertainment for almost two years now – yet the piracy continues with impunity every day and represents an existential threat to the economic model of the sports and entertainment industry.
“The international community must take decisive action to bring this state-supported piracy to an immediate end.”
BeIN’s battle against BeoutQ has fuelled further diplomatic tensions between Qatar and Saudi Arabia. The Saudi Arabian government has denied having any links to BeoutQ, whose channels are distributed online and over the Riyadh-based Arabsat satellite network.
BeIN reportedly paid between US$30 million to US$40 million a year for live broadcast rights to Formula One between 2014 and 2019 – which represents roughly seven per cent of the series’ estimated broadcast income, according to media analyst Richard Broughton at Ampere Analysis.
“Gulf operators are under intense pressure at the moment from piracy and poor consumer receptiveness to paying high monthly fees for content,” Broughton told Bloomberg. A spokesman for Formula One told Bloomberg it was in the late stages of finalising arrangements with a new broadcast partner for the region.
Liberty, which bought the championship for US$4.4 billion in 2017, has extended its reach in Asia by adding a new race in Vietnam from 2020, and also hopes to add a Grand Prix in Miami.
Formula One launched its own over-the-top (OTT) streaming service last season and aims to grow the platform to around two million subscribers by 2027.