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Sun 26 Jun 2011 12:03 PM

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Qatar's hunger for soccer poses new pay TV threat

Fears deep-pocketed Qatar may start chasing TV rights in other geographies

Qatar's hunger for soccer poses new pay TV threat
Al Jazeera news channel
Qatar's hunger for soccer poses new pay TV threat
(AFP/Getty Images)
Qatar's hunger for soccer poses new pay TV threat
(AFP/Getty Images)

First the soccer World Cup, now the rights to broadcast live French club games in France. A bid by Qatari state-backed broadcaster Al Jazeera for the rights to screen French football from 2012 through to 2016 has robbed Vivendi's Canal+ of a bargain, turning a one horse race into two.

But Qatar Inc.'s new incursion to the game also poses a wider threat to commercially driven pay-TV operators.

Live football is a key ingredient of success in pay television and domestic rights are typically the most lucrative for clubs, football leagues and broadcasters. That explains the lack of fuss when Al Jazeera bought the less crucial international rights to the UEFA Champions League or France's La Ligue 1. But the implications of Qatar's latest moves are much harder to ignore.

There's a big question over how Al Jazeera will deliver the pictures to its new audience. The Qatari broadcaster doesn't have a mainstream platform in Europe and would probably need to partner with an existing channel, like France Telecom's Orange Sport which decided not bid itself, or launch a new one.

Nor is it certain how the Qatar-based broadcaster will make money from the rights it will share with Canal+, and which have so far fetched €510m for five of the nine lots on offer. Government-funded Al Jazeera isn't a strictly commercial entity and while most of its 18 sports channels in the Middle East are revenue generating, it is unclear if they are profitable. Advertising exists but doesn't seem to be pursued aggressively. And Al Jazeera doesn't have a broadband or mobile offering to bundle into a package. Qatar would get a carriage fee if it put the channel on Canal+'s platform but that's unlikely to go very far.

Qatar may be more interested in promoting itself as a powerhouse in football than making money -- but rivals will suffer nonetheless. True, the French market isn't hugely competitive. But European operators, including UK-based BSkyB, rely on premium content to attract subscribers and will shudder at the thought that deep-pocketed Qatar might start chasing domestic rights in other geographies.

Qatar and French TV rights – the timeline

* The French professional soccer league said on June 23 that it had awarded some of the domestic broadcast rights to French Ligue 1 matches to Vivendi's Canal+ and Arab satellite network Al Jazeera. The deal is due to stretch from 2012 to 2016.

*The league sold the five lots for a total of €510m ($730.6m), its President Frederic Thiriez said.

*The league, which had hoped to receive bids that would at least equal the €668m per year it receives under the current contract, said the remaining four lots did not reach the minimum prices it required.

*The Qatar-based Al Jazeera previously paid an estimated €195m for international broadcast rights for Ligue 1 games from 2012 through 2018.

(Una Galani is a Reuters Breakingviews columnist. The opinions expressed are her own.)