Turkish football clubs have cried foul after a TV network withheld a $125m payment as it seeks to change the terms of a $500m-a-year broadcast deal after a dramatic slide in the lira.
Digiturk, a local subsidiary of Qatari network beIN, signed a five-year, $2.5bn contract for the rights to air Super Lig matches in 2016. Payments, spread over the term of the deal, were to be made to the Turkish Football Federation in lira, half at a rate fixed at the time and half at fluctuating daily rates.
For the past two seasons Digiturk upheld the deal. But the company now argues it is facing an unreasonable squeeze, with the company saying the 41 per cent plunge in the currency since the deal was signed in November 2016 amounted to “force majeure”.
The predicament facing the broadcaster, at a time when it is also being hit by a shrinking subscriber base, echoes that of other Turkish companies facing falling lira revenues while confronting dollar-denominated liabilities that have become much more expensive in lira terms.
Digiturk is pressing the TFF to agree to set the portion of payments not fixed at the 2016 rate at a level significantly lower than the current 5.7 lira to the dollar.
But the TFF and Turkey’s heavily indebted clubs, which have ploughed ahead with summer transfers and include the likes of Galatasaray, Fenerbahce and Besiktas, are resisting.
“There is a contract,” Fikret Orman, the Besiktas chairman who also heads a union of Turkish clubs, said this month. “Its conditions, guarantees and duration are laid out.”
Digiturk and the TFF have met 12 times in the past 45 days but no resolution has been reached.
One person familiar with the negotiations said the broadcaster was “bluffing”, arguing that the sums at stake were “not a big amount” for its Qatari owners.
But company executives are frustrated by a belief among Turkish clubs that it will “bail them out” of their financial woes, according to another person familiar with the discussions.
Digiturk told the Financial Times it was “plainly unsustainable” for any broadcaster to operate under the terms of the 2016 deal. It said it alone could not “shoulder responsibility for the commercial viability of the league in these unprecedented economic conditions, which are affecting all businesses”.
As well as overshadowing the start of the new Turkish football season next month, the dispute is a rare sign of strain in relations between Turkey and Qatar.
The countries have built an increasingly close friendship in recent years, joining forces against Saudi Arabia and the United Arab Emirates in a series of regional disputes. But many Qatari businesses harbour concerns about the investment climate in Turkey after the currency crisis that struck last summer.
The disagreement is the latest obstacle to beIN’s efforts to turn itself into a leading global entertainment group. The Doha-based network, which dominates the Middle East sporting landscape and operates in 43 countries worldwide, has also suffered at the hands of a pirate channel that illegally streamed its content in Saudi Arabia, in what beIN Sports has described as “industrial theft on a wholesale scale.”
There are other points of contention between Digiturk and the TFF, according to several people familiar with their discussions.
They said the broadcaster and its Qatari owners were frustrated at the lack of action to prevent piracy, which has hit subscriber numbers, and resent what they see as a reluctance by top clubs to provide access to players and managers for post-match interviews in order to attract viewers.
The TFF did not respond to requests for comment.