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MBA Exclusive: FAM Deal Disrupts Malaysia Football

What a start to this year’s sports rights calendar.

Sports rights agency MP & Silva has struck a 15-year RM1.26 billion (US$350 million) deal with the Football Association of Malaysia (FAM) as the association’s global advisor for all media and commercial rights, starting in 2016.

The deal works out to about US$23 million a year, a steep rise on the US$9 million a year that Malaysia’s largest media group, pay-TV focused Astro, paid for the 2011-2014 seasons as the incumbent.

This is a surprise.

Key media ecosystem players such as Astro, Fox Sports (the largest regional pay-TV sports broadcaster), TM (Telekom Malaysia, the country’s largest telco), and Media Prima (Malaysia’s biggest free TV broadcaster), had been close to securing a long-term agreement with FAM for broad coverage of Malaysian football across terrestrial, pay-TV, IPTV and digital platforms, including marketing and production.

MP & Silva's win throws a spanner into the works.

Furthermore, a significant chunk of Malaysian consumers could miss out on the action, at least in the short term.

Significantly, the new season of Malaysian football is scheduled to begin this Saturday (Jan. 31). Media rights have yet to be awarded for this season.

Expect plenty of last-minute negotiations between FAM and the broadcasters this week, with MP & Silva also likely to be involved in the mix.

Arbitrage Bets

The sports rights agency has benefited from some key arbitrage plays in the past but came up a cropper in Taiwan, where it terminated a six-year NT$2.04 billion (US$65 million) contract with the Chinese Professional Baseball League (CPBL) last July after inking the deal earlier in the year.

The agency has also endured mixed fortunes in Indonesia, where it paid US$90 million for the current cycle of Premier League football rights. Local industry players say MP & Silva faces challenges on securing full revenues from its rights packages, while pay-TV and broadcast buyers have complained about poor ROI.

There has been speculation that MP & Silva is holding the FAM rights for a potential new entrant, BeIn Sports, a former JV partner in Asia that works closely with the agency in other markets.

This seems unlikely however, given BeIn’s lack of local coverage, either on Astro’s large-scale 4.3 million customer base or TM’s IPTV platform, HyppTV.

In any event, both MP & Silva and FAM will face a challenging negotiation as all three key elements in Malaysia’s media and telecoms axis ­Astro, Media Prima and TM ­have been left with little skin in the game. Fox Sports has also been left out in the cold.

Malaysian football is a popular franchise, attracting growing viewership across Astro’s sports channel, Astro Arena, although monetization via ad sales has proved challenging.

It’s only the beginning of the monetization cycle.

However, without a critical mass of consumer eyeballs across traditional and digital media platforms, FAM may come to regret its decision.