Market Insight

Digiturk acquires UEFA Champions League rights to strengthen sports portfolio

December 10, 2017

Constantinos Papavassilopoulos Constantinos Papavassilopoulos Associate Director, Service Providers & Platforms
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Turkish satellite pay TV operator Digiturk, owned by BeIn Media Group, has acquired the UEFA Champions League rights for the period 2018 - 2021. Separately, UEFA Europa League rights have been acquired by Turkish sports rights agency Saran Media. Financial details for both the UEFA Champions and Europa League competitions were undisclosed.

UEFA Champions and Europa League rights are currently held by telecom operator Turk Telecom until the end of the season in June 2018. Turk Telekom sub-licenses the right to broadcast one UEFA Champions League match to public service broadcaster, TRT. Saran Media has not made any announcement as to whether it is planning to sub-licence the UEFA Europa League rights to a Turkish pay TV operator or show the matches on its own S Sport channel, which was launched earlier in 2017.   

Our Analysis

The acquisition of the UEFA Champions League rights was a necessary step for the beIN Media-owned Digiturk to solidify its dominant position in Turkey’s pay TV market. Despite its market leading position, increased competition from telcos Turk Telekom and Turkcell, criticism for the company’s low quality of customer service and its high package pricing has led to considerably high customer churn in recent years. The operator’s subscriber base declined 13% from 2.94 million at end 2014 to 2.6 million by end June 2017.  

beIN Media’s acquisition of Digiturk was cleared by the Turkish competition authority in 4Q 2016. Once cleared, the Qatari-owned BeIn Media has continued to implement a strategy to counter its cardinal threat: customer churn.

As such, securing the UEFA Champions Leagues rights in Turkey follows beIN Media’s five-year extension in 2016 of rights to domestic football league matches in Turkey - beIN Media signed a $2.5 billion extension agreement for Super Lig matches from 2017 - 2022. Digiturk will now control the vast majority of premium sports content in the country, with the exception of English Premier League broadcasts (controlled by Turkcell TV+) and NBA games (broadcast by Turkcell TV+ and D-Smart).

The enrichment of Digiturk’s premium sports portfolio forms part of BeIn Media’s regional strategy: Turkey is the first country, outside its home base of Middle East & North Africa (MENA), where BeIn Media is operating as a fully-fledged pay TV broadcaster and not just as a provider of channels (such as its operations in France, Spain, US and across Asia). BeIn Media’s move to  bolster its premium content offering in Turkey will help Digiturk continue to command its relatively high-end pricing structure compared with competitors: Digiturk’s packages cost, on average, around 40% more than the TV packages of its competitors in Turkey.

Turk Telekom’s loss of the UEFA Champions League rights is significant in terms of content but will not affect its focus on bundling and price. Turk Telekom’s investment in sports content was never intended to match  Digiturk which became evident in 2016 when the company adopted a very conservative approach to bidding for the acquisition of Turkish football league rights. Turk Telekom and Turkcell bundle their TV offerings with mobile and fixed broadband offers. Bundling has proven to be an effective approach to combat churn and ultimately facilitate the acquisition and retention of customers in Turkey. Less expensive pricing is also proving to be effective for the telcos: Turk Telekom offers its mobile subscribers a basic TV package for just five Turkish Liras ($1.30) a month. This is five times cheaper than the 25 Turkish Lira price for Digiturk’s basic pay TV package. As a result, bundling and price have played a major role in Turk Telekom’s meteoric rise of subscribers’ figures over the past two years: Turk Telekom’s satellite subscribers increased from 75,000 at end 2015 to 350,000 at end June 2017, or 365% growth in just 18 months according to IHS Markit analysis. Turk Telecom and Turkcell’s mobile and fixed broadband pay TV strategy coincides with the company’s  efforts to grow their over-the-top (OTT) online subscriptions services, Tivibu Go and Turkcell TV+ respectively. IHS Markit forecastTivibu Go had 1.42 million and Turkcell TV+ 1.11 million paying subscribers by end June 2017. 

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