COMMENT: Is the Middle East the next frontier for sports streaming?

Middle East investment in sports is nothing new. UAE based airline, Emirates, was one of the first eye-catching investments when they first sponsored Premier League Football Club, Arsenal, 20 years ago.

Currently, the Kingdom of Saudi Arabia has grabbed the headlines for its investment in all manner of sports, as part of the its Vision 2030 designed to diversify its economy away from a reliance on oil-based revenues. Over the last decade and beyond, the Middle East region has become a significant player in global sports.

So from those early days of sponsorship, to now, when high profile football clubs are owned by entities in the Middle East, and major competitions and events in football, basketball, tennis, golf, motorsports and combat sports (and more) are hosted in the region; the value of sports teams, leagues, athletes, and the associated media rights has changed beyond recognition. 

What this investment means for sports media rights

The value of sports rights has never been higher. The value of global sports media rights in 2023 was estimated to worth a record US$56bn and it’s predicted to grow to over US$60bn in 2024.

Arguably, there has never been more competition for premium sports rights, which has played its part in the increasing value of rights generally. In addition, as technology continues to advance, new opportunities are arising for rights holders and distributors alike, particularly in the AR and VR space.

In addition to investment and increasing value in the underlying sports asset, the sports media rights landscape has been constantly evolving over time. The convergence of media and technology has continued apace – ‘traditional’ broadcasters have, in most cases, transformed their business to account for new digital distribution means.

They have done this by either transitioning to streaming-only models, or adding OTT capability to their existing service, as user preference shifts away from linear programming.

At the same time, large technology and social media companies have launched their own streaming services and have begun competing for premium rights. There has also been a rise in rights holders offering their content direct to consumers, and specialist sports streaming services have begun to emerge.

The advancement of technology, and the deep pockets of global converged technology and media companies, means that the traditional distribution of rights (on a territorial or distribution means basis) is constantly changing. 

Entities are now able to consider bidding for rights on an global basis. Meanwhile, traditional broadcasters continue to see premium sports rights as the anchor to their broader aggregated service. More competition, more revenue, more value.

However, this continued rise in value of sports rights is not without its issues. Ironically, the growth of digital distribution, driving competition and increasing value, has inadvertently led to the growth of piracy. According to 2023 research by Synamedia, it was estimated that piracy costs the global sports rights industry up to $28m per year. This is particularly true in the Middle East.

There are a number of factors required to combat piracy effectively. Firstly, there are a wealth of technological solutions, which can be employed by rights holders and distributors to secure broadcasts and reduce the occurrence of piracy at the outset.

Technology can be employed not just to stop piracy from occurring, but to track the source of the piracy and increase the ability to enforce intellectual property rights against pirates (utilising, for example, fingerprinting and watermarking technology).

Which leads on to one of the most crucial elements. Robust intellectual property laws and effective enforcement. 

This is where strides have been made in the region in recent years, with the introduction of updated and modernised intellectual property and media laws. As recently as October 2023, the UAE has introduced the New Media Law, which contains two crucial elements from a piracy perspective.

Namely, an acknowledgment of modern distribution means; and the importance of intellectual property rights, with the New Media Law stating that the Media Council [the UAE Federal Media Regulator] will “promote the intellectual property protection in the State in order to protect the intellectual property rights related to the Media Industry”.

The media regulatory landscape across the region continues to develop and adapt and it is hoped an increasing focus on protection and enforcement of intellectual property rights drives much of this change.

In the meantime, Middle East investment in sports will continue, competition for premium sports rights will grow (driving up value), and technological developments will lead to as yet un-explored opportunities.

 Jamie Ryder is a partner at Reed Smith.