Qatar-based pay-TV broadcaster beIN Sports will not renew its TV rights deal with Formula One, citing piracy issues linked to Saudi-based BeoutQ.
As the operator of a global network of sports channels, beIN has held the rights to broadcast the Formula 1 world championship in the Middle East and in North Africa for the past five years.
However, the broadcaster has been fighting an uphill battle against "rival" and pirate BeoutQ, which it alleges has been stealing content for over a year and illegally disseminating it through its online channels.
As a consequence of piracy's pervasiveness in the region, beIN Sports stated that it will "pay less" in the future for broadcast rights in an effort to fight the "industrial-scale theft" carried out by the Saudi media group.
"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," said Tom Keaveny, beIN Sports' managing director in the region.
Among those rights holders merely paying 'lip service' - as characterized by Keaveny - is Formula One, to which beIN Sports reportedly paid between US$30 million to US$40 million a year for live broadcast rights to Grand Prix racing.
That amount represents approximately 7 percent of Formula One's estimated broadcast revenue, 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.
According to Bloomberg, Formula One is currently in the process of finalising a rights agreement with a new broadcast partner for the Middle East and North Africa region, although securing a deal that compares favourably with its previous contract with beIN could prove challenging for Liberty Media.
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