World Cup: The company that made the Lebanese state kneel

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Lebanese shopping for flags during the 2014 World Cup in Lebanon on June 6, 2014. (Photo: Haitham Moussawi)

By: Mouhamad Wehbe

Published Tuesday, June 17, 2014

The recent deal with the company Sama, allowing the Lebanese to watch World Cup games for free, is not unique. It is similar to the many monopolies protected and supported by the state, which only intervened this time to save the company from losing money, even if it meant sacrificing Télé Liban and squandering public money.

A company called Sama managed to get all the Lebanese on their knees. It is the sole agent of beIN Sports, which has the exclusive rights to broadcast the World Cup. Under the direction of the prime minister, three ministers decided to save the company from incurring major losses caused by the meager sales of its subscription cards and receivers.

The three ministers made a deal with Sama at a cost of three million dollars, which they tried to paint as a victory for the Lebanese. The agreement unveiled a harmful authority that exploits every opportunity to squander public services and extort money from the poor. The deal imposed the hegemony of the illegal cable companies, instead of providing the public with the funds to buy the rights to broadcast the games through Télé Liban, which reaches every home.

The deal

The deal between the government is not an understanding. It was a public bargain by the head of Ogero, Abdel-Moneim Youssef, urged by Communications Minister Boutros Harb and involving Youth and Sports Minister Abdel-Mottaleb Hinnawi and Information Minister Ramzi Jreij, under the directions of Prime Minister Tammam Salam.

According to the deal, announced by Harb in a press conference on Monday, "World Cup games will be provided to all Lebanese viewers in all regions of Lebanon starting tonight [Monday] through Sama and the cable companies, free of charge. Sama is committed to securing the cards, necessary equipment, and required licenses to all providers of such companies for free, beginning noon today [Monday]." The communications minister maintained that part of the money paid to Sama will be "through a partnership with [mobile phone companies] ALFA and MTC."

However, the agreement raised several legitimate questions, expressed by the Télé Liban chairperson, Talal al-Maqdisi, during the press conference. He announced that the public channel will broadcast the games, even if it costs him his job.

So why did the state choose the cable providers and ignore Télé Liban – a channel that could be accessed by all Lebanese – from the deal? And why did Sama agree to the government's requests a few days after the start of the games?

Compensating Sama

Speaking to Al-Akhbar, Maqdisi explained that Sama's compensation of three million dollars is one million dollar less than the value of its deal with beIN Sports. The reason why they agreed on this small amount was that, "Sama's sales [of subscriptions] in one month had been in millions of dollars and thus it was no longer considered to be in loss."

However, the deal compels Maqdisi to propose another type of problem. "Since the state aimed to allow the World Cup to be viewed in every home in Lebanon, by spending this amount, then the only way to do that would be by allowing Télé Liban to broadcast the games," he explained. "Legitimate cable companies do not cover more than 20 percent of Lebanese households. The remainder will have to watch the World Cup through illegal companies, giving them legitimacy, although we have a ready alternative in Télé Liban."

So, the cable providers and distributors were chosen over Télé Liban. But will the public channel broadcast the games? And how?

Since Sama has already made its money and would not be hurt, Maqdisi can make use of several options. "There are more than 12 stations broadcasting live," he said. "The agreement with the company freed me from claims of damages if we broadcast the games. We could carry them live, but we are looking into the best way to do so."

However, insisting that the cable companies and television channel providers are given the exclusive rights is very suspicious. In the past few weeks, Sama sold many World Cup subscriptions to several individuals and touristic establishments, such as restaurants. Broadcasting the World Cup through the cable companies will not cause controversy, since many of them already do so in several regions and neighborhoods under the protection of local forces.

On the other hand, broadcasting the games on Télé Liban will lead to the dismay of many Sama customers, who already paid large amounts to watch the World Cup. Thus, the deal with the cable companies will cause less damage to Sama and serve its interests well.

Who benefits?

Financial data from the company confirm that the deal with the Lebanese state was completely to Sama's benefit. It was exactly like deals signed by the state with monopolizing private sector establishments. This is not unique. The state is always mobilized to serve the interests of companies, especially if they benefit from political protection, which is rumored in Sama's case.

According to the information, the deal will pull Sama out of a quiet crisis that appeared a few days before the kick-off. Sales of subscription cards did not exceed 10 percent of its projections. The company was ready to make a deal to recover some of the profit it expected to generate from selling subscriptions. "News about Télé Liban's intention to get the rights to the World Cup had caused us great losses," Hassan al-Zein, Sama's CEO, told Al-Akhbar before the announcement of the deal.

It is interesting that Sama had refused to announce the deal on Sunday evening, releasing several statements saying that the negotiations were not serious. However, market analysis explained that the company was hoping to increase its profits, as the announcement would put an end to its sales.

Sama is the big winner in the deal. The Lebanese will pay the cost out of their own pockets, even if this was through the mobile companies, as it will be a loss for the treasury.

According to informed sources, the communications minister asked each of the mobile companies to pay half the cost, US$ 1.5 million. They would be recorded in the books as "marketing" expenses to circumvent the public accounts law, which was created in the amendments made on the contracts with the two state-owned cellular providers by former Communications Minister Nicolas Sehnaoui.

This article is an edited translation from the Arabic Edition.


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