French pay TV broadcaster Canal Plus has sued BeIn Sport for unfair competition in commercial court, reports BFM Business. The Vivendi subsidiary has accused BeIn Sport of operating at a loss and depending on the deep pockets of its owner, the state of Qatar, rather than having to turn a profit.
Canal Plus CEO Bertrand Meheut had said on BFM Business in early June that BeIn would make a loss of over EUR 300 million in its first year and that the Qatari operator's purpose is not to be profitable. Canal Plus sports director Cyril Linette told the press in February that BeIn’s business model was anti-competitive.
Customers can watch BeIn Sport’s two-channel package for EUR 11 a month, of which the company only sees EUR 7.20 after VAT and paying 30 percent to the distributor. The channels had 1.2 million subscribers in March, Les Echos reported. BFM Business writes that BeIn's around EUR 100 million a year of income cannot cover BeIn Sport’s estimate in mid-2012 that it would spend EUR 300 million to EUR 330 million a year on sports rights, including EUR 150 million for Ligue 1 football.
Natixis has projected that BeIn would need 5 million subscribers to break even. The sports broadcaster has other sources of revenue, including its income from its presence in the Maghreb, which all together could reduce its break even point to 2.8 million subscribers, according to insiders. Canal Plus declined to comment on the matter.
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