Market Insight

Digitürk reinforces its leadership of Turkey’s pay TV market with Super Lig rights renewal

November 22, 2016  | Subscribers Only

Constantinos Papavassilopoulos Constantinos Papavassilopoulos Associate Director, Service Providers & Platforms

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Satellite pay TV operator Digitürk has renewed its agreement for media rights to the two major football leagues in Turkey, paying a fee of $2.5 billion over five years. Digitürk has held the rights to the Super Lig since 2000. The new contract starts with the 2017-18 season and ends in 2021-22. Digitürk will agreed to pay $500 million annually for this five-year period, an 11% increase on the current contract.

In the bidding process held on 21 November at the headquarters of the Turkish Football Federation, Digitürk acquired all four packages that were offered in the tender process. The company has control over live TV, online and radio rights of the two leagues plus the highlights. It was the first time in the bidding process for football rights in Turkey that it was not required from the bidders to have a physical broadcast infrastructure in place. It is understood that this change in the rules was made particularly in order to attract interest from OTT players. Media companies participating in the bidding process were reported to include D-Smart, Turk Telekom, Turkcell and Vodafone and one the agent Infront Sports & Media AG.

Our analysis

Football - and particularly the local football league - is the most important premium content in the Turkish pay TV market. Holding the TV rights since 2000, Digitürk has been the leading pay TV operator in the country, both in terms of subscribers and revenues. BeIn Media Group, the Qatari media conglomerate, acquired Digitürk in 2015. According to IHS Markit TV Intelligence data, Digitürk controlled 52% of the Turkish pay TV market at the end of 2015 in terms of subscribers and 73% in terms of revenues. Its supremacy, albeit reduced, is expected to continue. We forecast that by 2020, Digitürk will represent 43% of the Turkish pay TV market in subscribers and 65% in revenues. Overall, Turkish pay TV is forecast to grow with a CAGR of 6.4% between 2016 and 2020.

Both of Turkey’s major telcos, Turk Telekom and Turkcell, have lately made substantial investments in sports rights and have expressed ambitious plans to launch sports propositions in order to attract more customers: Turk Telekom has acquired the UEFA Champions and Europa League rights for the period 2015-18, has launched a 4K/UHD set-top box and is planning to broadcast football matches in UHD. More importantly, Turk Telekom launched in summer 2015 a satellite pay TV service to accompany its IPTV offer. The telco is targeting 20 million households in the next few years and premium football content seems to be the right vehicle to achieve this goal. Turkcell, on its side, acquired the English Premier League rights for the period 2016-19, has also launched a 4K/UHD set-top box and has experimented with the live delivery of sports content (in HD quality) in mobile networks using a LTE broadcast solution. Both telcos are heavily interested in offering sports content via their own OTT services to mobile devices and PCs. They are eager to exploit the big investments they made in 2015 by acquiring spectrum in Turkey’s 4G spectrum auction. Turkcell spent €1.62 billion to acquire 172 MHz of spectrum while Turk Telekom spent €955 million for 110 MHz.

A point of discussion in Turkey was the small rise in the annual value of the rights from the previous contract. The rise is just 11% from $445 million annually in the period 2014-17 to $495 million under the new contract, while reports in the Turkish media were indicating that the Turkish Football Federation was expecting an annual fee of around $550 million. In Spain and Germany, the latest renewals were 80% higher than the previous contract while in the UK, Sky and BT retained Premier League rights at a cost which was 67% higher than the previous deal (see our Market Monitor, European Football Rights 2016). A reason for the small growth in Turkey might be attributed to the current state of the country’s economy which is severely impacted by the recent political events like the failed military coup in July and terrorist attacks in Istanbul and Ankara. 

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