Premier League football: copyright spat derails Saudi ambitions

Emad Mekay, IBA Middle East CorrespondentTuesday 22 September 2020

For months, Saudi columnists agreed that a bid by their country’s sovereign wealth fund, the Saudi Public Investment Fund (PIF), to buy Newcastle United, an English Premier League football team, was a big win, a safe investment, a visionary decision by ‘the leadership’.

‘Some three billion people follow the Premier League across the world. Its games are broadcast to 188 countries,’ wrote Saudi columnist Bader bin Saud in Al-Riyadh Daily. ‘The acquisition will be an effective soft power that will help Saudi Arabia both politically and to compete for the exclusive rights to air the Premier League’.[*]

PIF led a consortium with PCP Capital Partners and Reuben Brothers that offered nearly $400m to buy 80 per cent of Newcastle United. But despite initial excitement in Saudi Arabia, the takeover soon confronted stiff opposition with the main arguments against the deal resting on legal and, later, human rights grounds.

Over the past 15 months, we spoke to nine law firms in Saudi Arabia, each of which either simply refused to act on our behalf or initially accepted the instruction, only later to recuse themselves

FIFA statement

The first attack came from TV broadcaster, beIN SPORTS (beIN), which is owned by Saudi Arabia’s regional rival, the Government of Qatar. BeIN, which has invested $15bn in television rights and acquisitions worldwide, urged the Premier League to block the Saudi offer after sounding the alarm on unlawful practices, including piracy and copyright infringement.

BeIN, one of the world’s largest buyers of sports television rights, is in a three-year contract worth $525m to exclusively air all 380 Premier League games to 23 countries in the Middle East.

The scuffle over television rights first broke out after Saudi Arabia led a group of three other Arab countries in imposing sanctions and an embargo on Qatar. A Riyadh-based piracy network, beoutQ, started targeting the Premier League along with other competitions by illegally carrying beIN’s programming in Saudi Arabia and across the region without permission. The Qatari group said beoutQ began selling their exact same programming through new TV boxes, but labelled with a different watermark at lower prices. Even beIN’s in-house studio segments were broadcast under the new name, beoutQ, with the Q referring to Qatar.

The Crown Prince and his riches

PIF is chaired by Crown Prince Mohammed bin Salman, the de facto ruler of Saudi Arabia. He’s vowed to limit Qatar’s role on the world stage and win business from them. Coinciding with the rupture with Qatar, Saudi viewers expressed concern they will now miss out on their favorite sporting events. An influential advisor to bin Salman, Saud al-Qahtani, pledged to find alternatives to beIN’s shows in Saudi Arabia, a kingdom of 33 million people.

The Saudis appear to have had larger designs too, this time aimed at elbowing Qatari businesses out of sports licenses altogether, including with the Premier League, which remains extremely popular across the Middle East.

The Qataris, who are spending aggressively on television rights around the world, were visibly rattled. If the Saudis could snatch away rights to the coveted Premier League, they could also sabotage Qatar’s plans for hosting the 2022 FIFA World Cup, estimated to have cost the tiny but ultra-wealthy Gulf nation around $220bn already, including the construction of massive air-conditioned stadiums.

BeIN quickly scrambled for the legal option and initiated a series of trade disputes against Saudi Arabia over 2018 and 2019. They asked for a billion dollars in compensation for banning the TV broadcaster in Saudi Arabia.

BeIN also solicited help from leagues and competitions it deals with such as UEFA Champions League, La Liga in Spain, Italian Serie A, and France’s Ligue 1, saying that the Saudi bootleg operation would jeopardise their own pot of gold that lies mostly in rights fees.

In mid-June, a panel of the World Trade Organization (WTO) issued a decision in a complaint filed by Doha in 2018. It concluded that Saudi Arabia was violating the WTO regulations by failing to protect intellectual property rights. The panel urged Riyadh to take immediate corrective measures.

With intense Qatari lobbying, several other leagues and teams spoke against the industry-scale piracy stemming from Saudi Arabia but said though they found no one willing to legally represent them inside the Kingdom, where businesses are mostly dominated by members of the ruling Al Saud family. ‘Over the past 15 months, we spoke to nine law firms in Saudi Arabia, each of which either simply refused to act on our behalf or initially accepted the instruction, only later to recuse themselves,’ FIFA, the international governing body of football, said in a statement.

FIFA turned to satellite providers and urged them ‘to stop providing a platform for piracy, which harms not just legitimate licensees, fans and players but also the sports that it abuses.’

For its part, the Premier League itself said it was siding with ‘legitimate Premier League rights holder across the Middle East and North Africa, BeIN Media Group’ to bring the illegal broadcast piracy to an end. The Premier League said it informed the European Commission through the Sports Rights Owners Coalition, a lobbying group, and made the British Government aware of the problem.

Reportedly, the Premier League also wrote to the United States government to keep Saudi Arabia on a watch list of countries that violates copyright. The US Trade Representative had put Saudi Arabia on the list for violating television rights through its rogue sports channel, beoutQ.

And human rights too

The spat also attracted major non-sports international organisations who warned the Premier League against the Saudi bid. Amnesty International and Human Rights Watch pointed to egregious Saudi rights violations as grounds for barring the Saudi government from buying sports clubs. Exiled Saudi opposition activists joined the fray and warned that Riyadh has been using state vehicles, such as PIF, to whitewash its reputation and increase influence globally.

The Saudis and Arabsat, the Saudi satellite that airs beoutQ, have denied involvement in copyright violations or TV piracy. Saudi media went as far as to say beoutQ was actually ‘Cuban’, not Saudi and that the authorities confiscate beoutQ boxes whenever found in the Kingdom. Saudi officials routinely urge the international community to instead take a better look at how migrant workers are being mistreated in Qatar particularly in sports-related construction sites.

Riyadh also banned beIN in Saudi Arabia on antitrust grounds and later appealed the WTO decision. But legal experts following the case say that despite the Saudi appeal, the Qataris are still in a stronger legal position.

‘We believe that the Qatari position is strong,’ says Dr Ghada Darwish, Membership Officer of the IBA Arab Regional Forum. ‘The latest Saudi attempt may be a failure, and it would be better on the part of Saudi Arabia to engage in good faith with Qatar to agree on a specific arbitration mechanism.’ She added, ‘We believe that Qatar had taken the necessary legal measures for this and will continue in the same way’.

Darwish, who is based in Doha and is also an arbitrator at the Court of Arbitration for Sport in Lausanne, Switzerland, argued that piracy is valid basis to stop violators from owning sports teams.

‘Saudi Arabia’s breach of the rules of the World Trade Organization and its violations of intellectual property rights due to its piracy of sports broadcasting rights owned by the Qatari BeIN company could be interpreted as sufficient reasons to prevent them from buying sports clubs. However, more investigations and findings may be considered if necessary,’ she said.

For the Saudi media, their initial confidence came to a halt in late July when PIF lost patience waiting for the Premier League to complete its vetting process and withdrew the offer. ‘The English will regret letting go with PIF,’[*] wrote columnist Mugbil bin Judia, arguing that PIF could have brought lucrative advertising from the companies it owns.

[*] Author's translation