BeIN Sports France won a crucial victory against Canal + in the battle over lucrative sports broadcasting rights. The Commercial Court of Nanterre decided that the Qatari sports channel (BeIN Sport France is a subsidiary of the Qatari Al Jazeera Network) did not engage in unfair competition against the French Vivendi group subsidiary, Canal +.
Not even one year after BeIN Sports’ entry on the French pay TV market in the summer of 2012, Canal +, sued BeIN Sport for allegedly recommending distribution prices to subscribers which were so low as to be economically unprofitable.
The French TV channel even asked the judge to order BeIN Sport to establish a new fee schedule based on the costs it actually incurred, arguing that the rate should be 30 euros per month for 2 million subscribers in order for the Qatari accounts to be balanced.
Canal + argued that since BeIN Sport is subsidized by Qatari sovereign investment funds, its choice voluntarily to lose money by buying rights to sports events at extremely high prices and selling its subscriptions at extremely low prices (about 12 euros a month as compared to about 40 euros for Canal +) was not only economically irrational but deliberately destined to disorganize the market and evict its competitors.
Based upon information and studies adduced by BeIN Sport, the Court ruled that Canal+ failed to show that the introductory subscription prices charged by its rival were abnormally low relative to the going market rate for such services. Indeed, the Court found that the subscription price initially proposed by BeIN Sport was “is in line with the prices observed in the market,” citing as an example the soccer offer proposed by Canal +, “Foot +” for 8 euros per month, or that of the operator Orange, “Orange Sport”, for 6 euros per month.
Besides, as regards the purchase of television rights, the Court found that Canal + recently invested “significantly more money” than BeIN Sport: Canal + acquired League 1 soccer rights for € 420 million, whereas BeIN Sport spent only € 150 million to broadcast similar matches.
As a result, the Court found that it was not abnormal for a new entrant on a market such as BeIN Sport to incur losses during its initial launch phase. The Court took note that BeIN Sport, with more than one and a half million subscribers, was not in a dominant position on the market, and added that while BeIN Sport certainly has “very substantial financial resources”, this is also the case for the Vivendi media and telecommunications group”, which includes Canal +.
The claims of Canal + were dismissed in their entirety, as were BeIN Sport’s counterclaims for €66 million in damages based on the alleged adverse publicity and denigration fuelled by the French channel both before and during the present proceedings and Canal +’s alleged abuse of procedure in bringing the present lawsuit.
On the other hand, Canal + were ordered to pay €100,000 of notional costs and attorneys’ fees to its competitor, a large judgment in this regard by French standards.
It is too early to know if Canal+ has appealed this decision, which marks just one battle in the war between the Qatari channel and Canal + for a leading place on the French sports media landscape.