Market Insight

Al Jazeera launches BeInSport in France


Al Jazeera's move into the international market took a leap forward today with the launch of BeInSport 1, the first of its two premium sport channels in France, kicking off a major shake-up in France's premium sport channel landscape. A second channel, BeInSport 2, will launch in July or August before the beginning of the new football season. Costing €11 a month, the two channels will be distributed on cable, IPTV and satellite to a potential 17.5m homes. The only platform with which Al Jazeera has yet to agree a carriage deal is Canalsat, the satellite platform operated by Canal Plus.

BeInSport's first major event will be the Euro 2012 football finals, which kick off on 8 June. The channel has also signed up rights to tennis, basketball and handball from the London Olympic games later in the summer. The key rights in its portfolio, however, are France's domestic football competition, Ligue 1, and the UEFA Champions League. BeInSport will also air matches from Spain's La Liga.

France's Telecom will close its Orange Sport channel at the end of the month and offer the two BeInSport channels in their place. In another change to the televised sport landscape, the Ligue de Football Professionnel (LFP) is closing its premium digital terrestrial channel, Cfoot, after less than a year.

Canal Plus, which has broadcast the French league since the 1980s, clearly has most to lose from a successful launch by the Qatari broadcaster in France. Reports that Canal Plus has launched a legal action against Al Jazeera alleging illegal poaching of staff; that it had 'banned' the BeInSport channels from Canalsat and that it is even lobbying for the newcomer to be subject to the same regulatory regime as its own sports channels appear to suggest that the pay TV company is rattled.

However, actions by Canal Plus so far do not support this thesis. It is certainly true that Al Jazeera has dramatically impacted Canal Plus's football portfolio; from this August, Canal Plus will only show 76 Ligue 1 matches per season instead of 342, while its output of Champions League matches will fall from 133 a season to 13. But Canal Plus has bought the most attractive match packages for both events: it will show the Sunday night and Saturday 5pm matches from la Ligue, and will have first pick of the week's matches from the Champions League.

Canal Plus paid the reserve price of €420m a season for the four lots it was awarded, less than the €460m it is paying under the current deal. It does not appear to have bid for any of the other lots. These - apart from Lot 5 won by Al Jazeera, which is paying €90m a season - were not allocated because the LFP did not achieve its reserve price. According to press reports, Al Jazeera paid only an additional €60m for the remaining live rights it has bought (Lots 6 and 9). If Canal Plus had seen these matches as crucial, it would surely have paid more. Separately, Al Jazeera is paying €50m a season for the Champions' League, more than double what Canal Plus was paying.

The Vivendi-owned operator has clearly made a judgement that football rights are not worth acquiring at top price, and that it has retained enough key sport to give its subscribers a reason to continue subscribing. In addition, the TPS platform and then France Telecom have failed to stay the course in launching premium pay services against it. It would be reasonable to assume that the Qataris will expect to make a reasonable profit on their investment at some point in the next three to four years. Yet, France Telecom, with a market capitalisation of €27bn, decided its French pay TV adventure was unsustainable despite racking up 775,000 subcribers for its film and sport channels by the end of Q1.