How Saudi piracy station beoutQ could sink Newcastle takeover bid

Saudi Arabia’s $370m bid to buy an English football club appears to be foundering on the rocks of the WTO.

Newcastle fans unhappy with owner Mike Ashley have for years been calling on him to invest in the club, or to sell to new owners who would [Alex Morton/Livepic/Action Images/Reuters]
Newcastle fans unhappy with owner Mike Ashley have for years been calling on him to invest in the club, or to sell to new owners who would [Alex Morton/Livepic/Action Images/Reuters]

Football. It’s the beautiful game.

It’s shots curled into the top corner in the dying seconds. It’s jumpers for goalposts in the local park. It’s Ronaldinho at the Bernabeu in 2005. It’s a soggy Tuesday evening in a windy town, far from home, desperately warming your hands holding hot, flavourless coffee as your team loses again. It’s the glories that are multiplied and the tragedies that are shared by being part of a scarved, polyester-clad tribe of like-minded fans.

And it’s money.

And now a $370m deal hatched in the northeast of England, to sell the historic – if currently less than stellar – Newcastle United Football Club might be scuppered due to a Middle Eastern pirate TV station.

Let’s start at the beginning. Football offers a tiny number of talented youngsters a route from favelas to Ferraris. The sport’s top stars earn eye-watering amounts. If Barcelona’s Lionel Messi, the world’s highest-paid footballer, grossing a reported 8.3 million euros ($9.2m) a month, were to drop a euro coin out of his pocket, he would earn it back, plus 50 percent, by the time it hit the ground.

But then you get to broadcasting rights, and you start talking serious money. The English Premier League raked in $11.33bn in sales of TV and radio rights for the 2019-2022 period. Spain’s La Liga and Germany’s Bundesliga have also generated multi-billion-dollar income streams from TV companies.

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Broadcasting rights are the golden steroids that force the sport’s elite to grow into an ever-more gargantuan global industry.

And so a serious threat to TV revenues jeopardises the whole shebang, say sports analysts.

While internet service providers try their best to crack down on illicit low-resolution video feeds of matches streamed through malware-heavy websites of dubious origin, a bigger threat has arisen in previous years.

A pirate satellite TV station was once thought impossible. For one thing, the pirates would need an actual satellite. In space. That’s a level of investment beyond most.

But that is exactly what has happened, according to a lawsuit filed at the World Trade Organization (WTO).

Pirates of the Caribbean Gulf

BeIN is a Qatar-based, Qatar-funded sports TV network. It has paid incredible amounts to be the exclusive broadcaster of Premier League football matches, as well as those of other leagues and the World Cup – and other sports and related programming from a host of networks – primarily across the Middle East and North Africa.

In June 2017, Saudi Arabia launched a wide-ranging diplomatic and economic blockade of Qatar. Riyadh claimed Qatar was a supporter of terrorism in the region, which Qatar has vehemently denied, saying the Saudi blockade was launched because it refused to fall in line with Riyadh’s regional hegemony.

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Saudi Arabia sealed its border with Qatar – the peninsula’s only land border, and the route through which 60 percent of food imports had arrived. It, along with its fellow blockading countries the UAE, Egypt and Bahrain, denied Qatar Airways access to its airspace. And the four countries blocked the broadcast of its satellite TV stations – including beIN – to their nationals.

There is a large appetite for football in Saudi Arabia. And weeks after the blockade began, a new pirate channel – beoutQ – took to the airwaves. It was “cynically named”, read a 2018 complaint made by the BBC to the European Commission, seen by Al Jazeera.

According to a lawsuit filed at the WTO, it was a direct lift of beIN’s content, broadcast online and via the Arabsat satellite – whose main shareholder is the Saudi government.

It swiftly proliferated well beyond the blockading countries, with set-top boxes soon available for sale across the Middle East and Europe, undermining the entire rights market, and therefore, argue TV and sports bosses, undermining the structure of funding of the entire industry.

Administrators of football leagues across Europe, as well as governing bodies UEFA and FIFA, have attempted to take legal action over beoutQ’s piracy, only to have Saudi cases shut down by local officials. As a result, proceedings were brought to the the ultimate arbiter of such things – the WTO.

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Taking goals to Newcastle

Meanwhile, in the north of England, British billionaire Mike Ashley, who made his fortune from discount sportswear retailer Sports Direct, has owned Newcastle United since buying it for $165m in 2007. He first tried selling the club in 2008, sparking fury among fans, many of whom never forgave him for the sacking of club legend Kevin Keegan as manager.

It is a club with a long and proud history; founded in 1892 and spending 87 seasons competing in the nation’s top flight. It has, however, been on the market for several years, with Ashley becoming a highly unpopular figure among the club’s fans for a perceived refusal to invest in the club’s future.

A few months ago, however, it appeared Ashley had finally found a buyer. A British consortium had made a $370m bid, backed by the Saudi sovereign wealth fund – one of the richest pots of money to be found anywhere in the world. And one of those reported to be bringing it all together was none other than TV producer-turned-Saudi business consultant Carla DiBello, friend of socialite Kim Kardashian and producer of Kourtney and Kim Take New York.

But don’t expect the world-famous reality stars to be modelling the Magpies’ famous black and white strip any time soon.

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R A M A D A N I N G . . .

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Under the reported terms of the deal, Saudi Arabia’s Public Investment Fund, as the mountain of petrodollars is formally known, would take 80 percent of the club’s ownership.

“It could change the power centres in the Premier League and offer serious competition to the duopoly of Manchester City and Liverpool over the past couple of seasons,” Uri Levy, of world football blog BabaGol, told Al Jazeera. “Newcastle is a club with a great potential and could add millions of fans in Saudi Arabia, who are well known for their passionate support.”

But it’s not just about winning silverware.

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“The planned PIF takeover of Newcastle is clearly about more than business and return on investment,” Torbjorn Soltvedt, principal MENA analyst at global risk consultancy Verisk Maplecroft, told Al Jazeera.

“Both the UAE and Qatar have a significant footprint in world football, most notably though Manchester City and Paris Saint-Germain, respectively. Saudi involvement in world football is much more limited, and the planned takeover of Newcastle presents an opportunity to address that.

“The takeover – if completed – would also support ongoing efforts to rebrand Saudi Arabia’s image globally. With a strong emphasis on sports and entertainment in Crown Prince Mohammed bin Salman’s Vision 2030 programme, the Newcastle investment would also fit into a broader political and economic strategy.” 

Of course, there’s a snag.

Would-be bankrollers of Premier League football clubs must pass a test proving they would be “fit and proper” owners and directors.

And, at the head of the Public Investment Fund, as he is of most everything in Saudi Arabia, is 34-year-old Prince Mohammed (or MBS), the de facto ruler of the country. The regime he oversees is being accused of widespread human rights abuses. Political rivals, including his own uncle, have been detained and shaken down for cash and promises of allegiance in what was billed as an “anti-corruption” drive. Women campaigning for the right to drive have been imprisoned and abused. Jamal Khashoggi, a journalist critical of the country’s rights violations, was lured to an embassy, where he was killed, allegedly dismembered, and Riyadh still refuses to produce his remains.

It might be a while before the Kardashians are wearing Newcastle United’s strip, as modelled mid-game by Jonjo Shelvey and Joelinton [Carl Recine/Action Images/Reuters]

“The Premier League is risking making itself a patsy of the Saudi government if it waves this deal through without looking at the country’s human rights record,” a spokesman for Amnesty International told Al Jazeera.

But superfan Alex Hurst, chair of Newcastle United Supporters Trust, isn’t too concerned.

“At the trust, we’ve only ever judged the owner of the club on his record at the club. That’s our remit. That’s our responsibility,” he told Al Jazeera.

“If the UK government is comfortable with Saudi investment in the country, [and] the FA and the Premier League happy with their involvement with the game – they are the people to make those decisions. If they’re satisfied, so are we.”

It’s a fair point. Human rights abuses haven’t stopped Saudi Arabia from becoming the UK’s biggest trading partner in the Middle East, with historic links in industries ranging from transport to energy to weapons.

There is also a potential conflict of interest, with Prince Abdullah bin Mosaad bin Abdulaziz Al Saud, a member of the House of Saud – Saudi Arabia’s 15,000-strong ruling family – owning Sheffield United. Football administrators will want to be convinced he could not be influenced by PIF bosses if they take over Newcastle.

Newcastle United owner Mike Ashley has been a frequent target of fans’ protests [Eddie Keogh/Reuters]

Gulf analyst Nicholas McGeehan said any commercial dimensions to the deal were secondary concerns. “I don’t think there’s any doubt that this is primarily political in nature and that Newcastle will be used as a vehicle to promote Saudi Arabia and to rehabilitate the reputation of the crown prince,” he told Al Jazeera.

But the stipulations of the league’s owners’ and directors’ test aren’t specifically geared to gauge the likelihood of football club chiefs killing and dismembering opponents, and so the focus returns to the allegation of piracy.

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‘Hugely damaging’

If the WTO were to find the Saudi government, which ostensibly controls the Public Investment Fund, had been the backers of beoutQ, this could have severe ramifications for the Newcastle takeover bid.

The judgement is not due to be officially published until next month, but it has been widely reported that the WTO has ruled against Saudi Arabia.

“The WTO piracy dispute is hugely damaging,” said Verisk Maplecroft’s Soltvedt.

“As the Premier League’s most lucrative overseas media partner, with exclusive rights to broadcast matches in the Middle East and North Africa, the alleged Saudi pirating of beIN content will complicate the PIF’s prosed takeover of Newcastle United. Any WTO ruling that Saudi Arabia is in breach of international intellectual property law would put the takeover of Newcastle in serious doubt.”

Requests for comment for this article received no response from either PIF or Newcastle United.

BeIN pointed Al Jazeera towards a previous statement, highlighting that the United States government had placed Saudi Arabia on its intellectual property blacklist over beoutQ’s alleged piracy, not least for “causing considerable harm to European Union businesses”.

The Sky Group, in its complaint to the US Trade Representative, referred to beoutQ’s “wholly parasitic rebranding” of beIN’s content and platform.

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Football administrators could yet leverage the proposed deal in their favour, but it would be a risky move, said McGeehan, the analyst.

“I think the Premier League may see this as an opportunity to resolve that problem – but if ending the piracy ends up as some quid pro quo for allowing Mohammed bin Salman to assume control, it could prove to be a costly strategic error,” he said.

“What the beoutQ case shows once more is that bin Salman will use his power and money to ride roughshod over whomever he pleases. At some point, he might decide he wants to do the same to the Premier League itself.”

Money. Power. Politics. It’s all a long way from kicking a ball around a park with your mates.

“Football was once the game of the people,” concluded Babagol’s Levy. “But it is now very much a geopolitical soft-power playing field.”

Follow James Brownsell on Twitter: @JamesBrownsell

Source : Al Jazeera

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