Al Jazeera to run Digiturk after beIN Sports acquires US$820mn stake
DetailsRebecca Hawkes | 23 December 2014
Chairman and CEO of Qatar's beIN Sports, Nasser Al-Khelaifi, has acquired a 53% stake in Turkish satellite pay-TV operator Digiturk for US$820 million, according to unconfirmed reports.
The largest ever media deal in Turkey will reportedly see the Al Jazeera-affiliated sports broadcaster take on the Cukurova Group's stake, which was seized by the Savings Deposit Insurance Fund of Turkey (TMSF) in May 2013, after it failed to meet a debt obligation.
Official confirmation of the wining bid is expected at the end of 2014, however sources close to the deal claim the Qatari offer – rumoured since December 2013 – has been accepted. It is anticipated Al Jazeera Media Network will take on management of Digiturk, following the acquisition by Sheikh Nasser Al-Khelaifi.
In addition to his roles at beIN Sports (formerly Al Jazeera Sport) Al-Khelaifi is also chairman and chief executive officer (CEO) of French football club Paris Saint Germain, and a member of Qatar's Olympic Committee.
The controlling stake in the pay-TV platform has attracted interest in other quarters as well as Qatar . In January 2014, rival Doğan TV Holding submitted an $880 million offer to buy the stake, although such a deal would have faced considerable obstacles from the competition commission. Türk Telekom also submitted a non-binding offer of $530 million in July 2014, and Providence Equity Partners, which holds 47% of Digiturk, has also expressed an interest in the remainder.
"For the Qataris, the acquisition of Digiturk serves a plethora of strategic goals, like expanding the global sports media franchise that beIN Media Group controls," says Constantinos Papavassilopoulos, senior analyst, IHS TV Intelligence, and "taking full control of the most premium content in the Turkish TV market, the broadcasting on an exclusive basis of the local Sport Toto Football League matches up to 2017 – the largest generator of revenues in the Turkish pay TV business."
beIN Sports has expanded rapidly over the past two years, with its channels now available in the USA and Canada, France, Indonesia, Philippines, Hong Kong and Australia, as well as 23 countries across the Middle East and North Africa (MENA). The Digiturk acquisition also fits with Al Jazeera's 'internationalisation strategy' says Papavassilopoulos, and follows the launch of dedicated channels in the US, in the Balkans and Egypt. The Doha-based TV network has also held talks for a possible investment in Italy's Mediaset this year.
"The financial backing from the new Qatari owners will undoubtedly strengthen Digiturk's dominant position in the Turkish pay-TV market," said Papavassilopoulos.
With around 83 million people and 20 million TV households, Turkey certainly holds promise for further broadcast expansion. There are around 5.8 million primary pay-TV households in Turkey at the end of 2014, which will rise to 7.6 million in 2020, representing a growth of 31%. Subscriber growth is likely to result in a 67.5% growth in revenues over the same period, according to IHS Television Media Intelligence.