BeIN Sports loses out in Egypt for breach of competition rules

Nasser Al-Khelaifi is the chief executive of Qatar's BeIN Media Group and president of French soccer club Paris St Germain (PSG). BeIN was hit with a anti-trust fine by an Egyptian court this week. (Reuters)
Updated 13 March 2018
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BeIN Sports loses out in Egypt for breach of competition rules

LONDON: The outlook for Qatari-owned sports broadcaster BeIN in Egypt has worsened after it was hit by a fine of 400 million Egyptian pounds ($22.7 million) for breaching competition rules.
Qatar’s BeIN Sports chief executive Nasser Al-Khelaifi, who is also the president of Paris Saint-Germain, was fined by an Egyptian court on Monday, AFP reported.
The ruling — confirmed by a court on March 12 — comes after BeIN announced on Feb. 20 that it will be broadcasting this year’s Fifa World Cup held in Russia across six of its sports channels, broadcasting live for 14 hours every day of the tournament.
The World Cup is of particular interest in the Middle East this year with four Arab nations; Egypt, Morocco, Tunisia and Saudi Arabia, taking part in the competition for the first time in history.
The fine slapped on BeIN highlights the close scrutiny paid to the granting of lucrative sports media rights in many countries, particularly those with fairly new competition legislation, AFP reported.
According to local press, the Egyptian Competition Authority said BeIN had made Egyptian customers replace their existing satellites in order to access BeIN services during the last African Football Cup held in Gabon.
The authority also raised concerns about the way subscriptions were sold, saying it forced viewers to buy sports bundles which included programming they weren’t interested in watching.
Alex Haffner, partner, sports business group at Fladgate law firm, in London, said that sports media rights often face scrutiny as they can potentially generate huge advertising revenue from advertisers keen to catch the eye of millions of sports fans.
“Competition and other regulatory authorities have historically paid a close interest to sports media rights and, specifically, the way they are tendered, packaged and sold to consumers.
“This is borne of the fact that such rights are typically a powerful medium to reach certain viewers, notably those who are highly prized by advertisers but not always easy to engage with via the medium of broadcast, and therefore tend to have a significant impact on competition in the broadcast markets on which they are exploited,” he said.
It could be additionally challenging where competition law is still in its “infancy,” he said, including Egypt in this category. The North African country introduced its competition law in 2005, but only started fully implementing it in the last few years, said Haffner.
“They have less established precedent to rely on and are more prone to being influenced by external factors. It therefore becomes more difficult to forward plan and map out how those authorities are likely to view particular business practices.
“That said, such ‘newer’ authorities, if treated with due reverence and respect are more likely to be open to closer co-operation and engagement with those they regulate,” he said.
The ruling against BeIN also reflects the wider geopolitical environment, with relations between Qatar and Egypt are already deteriorating due to the continued boycott of Qatar by the Saudi-led coalition of states, which includes Egypt, which began in mid-2017.
The reasons behind the boycott are said to be due to Qatar’s alleged support of terror groups — a claim Qatar denies.
“Egypt-Qatar relations were already very tense,” said Jane Kinninmont, senior research fellow and deputy head, MENA program at Chatham House in London.
“Egypt’s grievances against Qatar include a variety of grievances with Qatari media, primarily Al-Jazeera, so Qatar is likely to see this court case as a politicized decision, whether it is or not.
“However, the boycott has never been absolute. A variety of economic relations have continued, including the presence of Egyptians working in Qatar. This decision may underline the pre-existing tensions but is unlikely to be a game-changer,” she said.
BeIN did not respond to Arab News requests for comment. The Egyptian Competition Authority also did not respond to requests for comment.


Saudi Arabia seeks stable, not soaring, oil prices

Updated 22 September 2018
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Saudi Arabia seeks stable, not soaring, oil prices

  • Due to market tightness, Brent rose to nearly $80 per barrel but deteriorated to $78.80 on Friday.
  • The average price for Brent crude per barrel over the past five months has been between $72.11 and $76.98

RIYADH: Oil prices rose this week on continuing market tightness. With the price rise, some Saudi-bashing has begun. Bloomberg reported that increasing prices were due to Saudi Arabia’s comfort with Brent crude above $80 per barrel. Such “analysis” is hogwash.

Due to market tightness, Brent rose to nearly $80 per barrel but deteriorated to $78.80 on Friday. WTI rose above $70 per barrel for the first time in three months and settled at $70.78 per barrel by the week closing.
The average price for Brent crude per barrel over the past five months has been between $72.11 and $76.98. As may be noted in those numbers, the Brent crude price has been resisting the psychological barrier of $80 per barrel. The fact is that, since October 2014, the Brent monthly average has never gone above $80.
The oil price outlook might be raised as a result of this upward tendency and the continuing tight oil market. For instance, with the latest numbers in hand, HSBC has revised its oil price forecast upward with Brent to average $80 per barrel in 2019 and $85 in 2020, before settling at about $75 in 2021.
Bloomberg was inaccurate about Saudi Arabia’s comfort with a Brent price above $80 per barrel. The Kingdom has never been among the bulls when it comes to oil prices. Again and again, Saudi Arabia has been a major advocate for stable oil prices, not increasing oil prices, which it views as unsustainable and damaging to the global economy. Bloomberg is also predicting that Saudi Arabia will follow its allegedly bullish nature and refrain from ramping up production to compensate for the oil lost once the US sanctions on Iran come into effect.
US Secretary of Energy Rick Perry has confirmed that Saudi Arabia, Russia and the US are well able to add enough crude oil supply into the market to compensate for Iran. Indeed, the Kingdom has begun to increase output to adjust for market needs, from 9.87 million barrels per day (bpd) in April to 10.42 million bpd in August.
The upward movement in oil prices came after strong fundamentals showed market tightness that spurred record levels of speculative traders, with nearly all betting on higher prices. The price rise also recognized that total US inventories are below the five-year average for the first time since May 2014. Oil prices have been gradually trending upward with gentle fluctuations. There have not been any steep surges or declines. There is nothing artificial about the trend. In reality, it is boringly predictable.
Last month, the International Energy Agency (IEA) reported OECD commercial crude oil inventories at 32 million barrels below the five-year average. Stocks at the end of Q2 2018 were up 6.6 million barrels versus the end of 1Q 2018, the first quarterly increase since 1Q 2017. The IEA also noted that global refinery throughputs in the second half of 2018 are expected to be 2 million barrels higher than in the first half of the year. These refined products stocks will draw down before building again in 4Q 2018.
Global crude oil inventories peaked in 2016. The OPEC+ agreement that worked for market balance was the reason for a fall in inventories. Since May 2017, global oil stocks have been on the decline and now global crude oil stocks are below the five-year average. Product stocks are also below that level, with strong demand and healthy refining margins.
Inventories have kept falling despite American producers pumping at all-time highs last month. It is only the massive flood of oil from the US which has kept crude oil prices at low levels from early 2015 to the end of 2017 — along with a resulting lack of upstream investment in the oil industry. Therefore, the IEA predicts that in 2022 spare production capacity will fall to a 14-year low.
Global oil markets are rebalancing. Oil prices started their upward momentum from the end of October 2017. They went above the psychological barrier $60 a barrel after 10 consecutive months of tireless efforts by OPEC and non-OPEC nations that started on January 2017. The market rebalancing will continue through the end of 2018, and beyond.
Such upward momentum in oil prices isn’t artificial movement because it came after many months without steep price fluctuations. In 2016, the Brent price average was $43. The 2017 Brent price average was $54, and prices just surpassed $60 in October 2017. The Brent average surpassed $70 in late March 2018 and has been hovering between $72 and $78 since. There is no evidence of a steep fluctuation or an artificial movement.
The claims of an artificial price movement have come just at the time when OPEC and the world are reaping the positive outcomes of 24 nations collaborating in output cuts that managed to successfully rebalance the oil market in a situation where global oil inventories were running at record highs. Also, these false claims came when the oil industry needs capital inflows to reactivate upstream investments for major international oil companies. Such investments are essential for the price stability that benefits oil producers and consumers globally. Low oil prices result in low investment in discovery and production of petroleum resources, which damages various industry sectors and energy needs. That leads to a vicious cycle of up-and-down price fluctuations.