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Qatari Media entrepreneur buys major stake in largest Turkish pay TV operator Digiturk

24/12/2014

Sheikh Nasser Al-Khelaifi of Qatar has acquired a major stake in satellite pay TV operator Digiturk, according to Turkish media reports. The reports indicate that the Sheikh has agreed to pay $820m for the acquisition of 53 per cent of Digiturk.

Research firm IHS Technology has provided its analysis of the deal. Digiturk, from its launch in 2000, was managed by the Cukurova Group, a large Turkish holding group with interests in many sectors of the country's economy. However, last year Digiturk was seized by a state entity after Cukurova Group had failed to meet its debt obligations. The satellite pay TV operator was on sale from May 2013.

Sheikh Nasser Al-Khelaifi is the chairman and CEO of French football club Paris Saint Germain and a member of Qatar's Olympic Committee. It has been reported that the Sheikh has very close ties with the ruling family of the Gulf emirate. No official announcement of the deal is being made public yet, however Turkish media are reporting that the Al Jazeera Media Network will take part in the business management of Digiturk.

The acquisition of Digiturk marks the largest all-time takeover deal in the Turkish media market. The buyer, Sheikh Nasser Al Khelaifi is the chairman and CEO of beIN Media Group (an Al Jazeera Media Network spin-off that manages a number of sports channels under the brand name beIN Sports-formerly known as Al Jazeera Sports) as well as the chairman of the Qatar Sports Investment (QSI). QSI is a sovereign fund, which was founded in 2005 and was formed as a joint initiative between the Qatar Olympic Committee and the Ministry of Finance of the Gulf State. QSI is an investment vehicle through which the Qatari Government instruments a key acquisitions' strategy in the business of sports: QSI is the owner of the French Paris Saint Germain football club, the largest shareholder of sportswear company BURRDA as well as the sponsorship partner of one of the most prominent football clubs in Europe, Barcelona FC.

For the Qataris, the acquisition of Digiturk serves a plethora of strategic goals, like:

Expanding the global sports media franchise that beIN Media Group controls: The beIN Sports brand of channels is present in 23 countries in the Middle East and North Africa, in North America (US & Canada), in Europe (France), in Asia (Indonesia, Thailand, Philippines and Hong-Kong) and in Australia (after the acquisition of Setanta Sports Australia). Furthermore, taking full control of the most premium content in the Turkish TV market, the broadcasting on an exclusive basis of the local Sport Toto Football League matches up to 2017 (the largest generator of revenues in the Turkish pay TV business).

Fitting with Al Jazeera Media Network's Internationalisation strategy after the launch of dedicated channels in the US (after purchasing Current TV from former US vice president Al Gore), in the Balkans (Al Jazeera Balkans stationed in Sarajevo), in Egypt (Al Jazeera Mubasher Misr), as well as the widely reported talks with Italy's Mediaset this year for a possible investment in the Berlusconi-owned company.

Entering a lucrative market like Turkey. Turkey is the largest TV market in South-Eastern Europe (with around 83m people and 20m TV households), and is viewed by Al Jazeera Turk's officials as a strong-hold for further expansion in the near region.

Benefitting from the high prospects of the pay TV business and market in Turkey. According to IHS Television Media Intelligence, at the end of 2014 there are around 5.8m primary pay TV households in the country, which will rise to 7.6m in 2020 (growth of 31 per cent). IHS expects revenue growth to be even more impressive: according to IHS Television Media Intelligence from around $1.2bn in 2014 (from pay TV households only, excluding hotels, bars, restaurants and the renting of equipment) to over $2bn in 2020 (growth of 67.5 per cent).

The financial backing from the new Qatari owners will undoubtedly strengthen Digiturk's dominant position in the Turkish pay TV market. However, as the pay TV business in the country is facing positive prospects for the near future, the other major players (D-Smart, Turksat and TTNET) are not going to watch idly by: just one week prior to the Digiturk takeover TTNET (the IPTV offspring of Turk Telekom) has announced the acquisition of media rights for the UEFA Champions League and Europa League competitions for the period 2015-2018, a move that will certainly boost TTNET subscribers' figures.

www.ihs.com
LINK: http://www.tvbeurope.com/qatari-media-entrepreneur-acquires-largest-tu...
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