SBJ/September 10-16, 2012/Media

I’m still bullish on BeIN Sport, but not all of you agree

John Ourand
I caught some grief for comments I made to Grantland.com last month about the potential success of the Al Jazeera sports channel called BeIN Sport.

I am bullish on the channel, which launched in the United States last month. It has deep pockets and already has shown a willingness to spend on high-profile programming. Even before it officially launched, it was able to pick up exclusive rights to some U.S. men’s national soccer team World Cup qualifying games against Jamaica (Sept. 7) and Antigua (Oct. 12) by putting in a bid that was much higher than other networks.

The channel also appears to be doing well with distributors. It cut carriage deals with the country’s biggest cable operator (Comcast) and two direct-broadcast satellite operators (DirecTV and Dish Network).
What’s not to like?

I told Grantland that BeIN “could potentially throw sports media in the U.S. completely out of whack. It almost sounds like I’m overstating it, but they have so much money and they are getting the distribution.”

But veteran sports media executives said my quotes did not account for the bigger picture. The question isn’t about how much funding the channel has or the type of programming it can get.

Rather, several sports media executives said that BeIN Sport is making decisions now that will haunt the channel later. Its main problem is the same one that has bedeviled just about every other startup TV network: distribution.

While BeIN has deals with the biggest distributors, it is cutting the kind of sports tier deals that the rest of the industry has been shunning for the last decade.

Sports tiers don’t work. There aren’t enough viewers. And networks that launch on sports tiers find it close to impossible to come off of them.

Just ask Tennis Channel. The channel launched in 2003 with a series of sports tier deals. Even after it picked up rights to all of tennis’ Grand Slam tournaments, it still had trouble moving off of cable’s sports tiers and still does not have wide carriage on either of the two biggest cable operators — Comcast and Time Warner Cable — both of which carry the channel on sports tiers.

Now, nearly a decade after its launch, it is embroiled in legal action to get Comcast to move it off of its sports and entertainment package. Tennis Channel President and CEO Ken Solomon warns of trouble for BeIN, particularly on Comcast’s sports tier.

“Why [does] Comcast not have a single one of their networks on a limited sports tier? Because it doesn’t work as a model,” Solomon said.

Solomon said viewers have shown that they are not likely to pay extra for sports tiers to sample programming and networks with which they aren’t familiar. “The programming rule is that if you don’t see something, you’re never going to buy it,” Solomon said. “You have to show me what it is so that I know I like it.”

Those are some of the problems BeIN Sport is likely to face as it picks up more rights.

Nobody doubts BeIN’s financial resolve to fund the startup channel. The New York Times reported that BeIN Sport paid Comcast for carriage, which is a standard for independent startup networks.

Here’s how it works. A source says BeIN is collecting a small license fee from distributors. But the channel has agreed to pay what the cable industry calls “launch support.” That’s a fee independent networks historically have paid cable and satellite operators to help pay for the marketing and other expenses surrounding a network launch.

Nobody doubts BeIN Sport’s ability to get high-profile sports rights. In addition to the U.S. World Cup qualifiers, BeIN has rights to top European leagues like La Liga and Serie A.

That’s where BeIN will have the biggest effect. Its presence in negotiations for international sports, particularly soccer, should cause rights to escalate higher than ever. Competition in the soccer TV marketplace is as crowded as any other sport, with networks like Fox Soccer, GolTV, NBC Sports Network and, of course, ESPN, all competing to get soccer rights.

The question for soccer rights holders is whether they will accept more money from BeIN if it means their programming is relegated to a sports tier.

I’m still bullish on BeIN Sport. I think it has the potential to add to the sports media marketplace in a big way. But it definitely needs to do better than sports tier carriage to achieve that potential.

John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ.

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