Al Jazeera’s sports division will launch a dedicated sports channel for French viewers to broadcast its newly acquired football pay-TV rights.  More channels might follow provoking a direct challenge to establish pay-TV sports broadcasters.

Al Jazeera outbid a number of rivals earlier in December in order to win the French rights for four out of the five bundles of European Champions’ League games covering 133 matches from the 2012-2015 seasons. Al Jazeera reportedly paid some €60 million per season for its bundles, about twice that offered by its nearest rival.

Charles Bietry, formerly at Canal+ Sport and now French managing director of Al Jazeera Sports, told Le Figaro newspaper that Al Jazeera will launch a totally new channel, thereby dismissing the possibility of a joint venture with Orange. The channel will not be called Al Jazeera Sport; management would like to create a more neutral brand, with a name that can be pronounced in every country. The channel should in theory be distributed on all platforms (IPTV, Cable, Satellite, DTT). Bietry explained that Al Jazeera intends to be present “not in every single country but certainly in every continent”. He also stated that Al Jazeera in France would not bid for the 2012 European Championship, or for the Europa League rights.

Last week Canal Plus won the fifth bundle of games covering the 13 most prestigious matches, including the games where the French national team has a role. Canal Plus will pay a record €40 million per season, and significantly more than the €25 million currently being paid by free-to-air network broadcaster TF1.

These deals mean that all the UEFA Champions’ League  games can only be viewed via pay-TV in France. Investment bankers Morgan Stanley, in a note to clients, say that the net result for UEFA is that the value of the Champions’ League rights in France has doubled, from €55 million to around €100 million.

Frederic Ivernet, head of public relations at TF1, said: “We participated in the auction because we have historical ties with UEFA. However, the quality of Champions’ League matches is not high enough for our viewers. With 4.5 million or 4.7 million viewers equivalent to a 17 per cent or 18 per cent market share, audiences are lower than those of virtually any US series. We will not regret not broadcasting it anymore.”

Since mid 2012 Al Jazeera, which is owned by the Qatar Royal Family and Qatar Sports Investments, part of Qatar’s sovereign wealth fund, has been particularly active in European football and pay TV.

The Qataris, via Al Jazeera Sports, had already acquired the pay-TV rights of two games per week and two magazines shows for €90 million per season.  Qatari investors already control the Paris San Germain soccer club via a 70 per cent stake.

Morgan Stanley says that while this is not good news for French football fans, “we do not believe losing the Champions’ League rights is overly negative for TF1. Indeed, these audiences have been volatile as not all matches are hugely attractive. Last week, TF1 recorded only 4.5 million viewers in prime time (16.5 per cent market share) with Lille – Trabzonspor [soccer match] for instance. From a purely financial point of view, lower programming costs should be a positive in a lacklustre advertising environment. In the longer term though, this may change the way viewers perceive TF1. Its editorial will change and, while not all games produce record audiences, most still have positive on group audiences. We believe TF1’s grid is weaker than M6’s in the sense that it relies more heavily on a few ‘big’ shows (generally Endemol produced), US series and sports. The loss of Champions’

League matches means TF1 will have to review its content strategy to some extent. We remain cautious on TF1 going into next year.”

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