For eight-years, from 2006, Julian Moore worked in Singapore as the sole in-house lawyer for Football Media Services (FMS), a 50/50 joint venture between the Swiss-owned sports marketing agency, Infront Sports & Media AG, and the Japanese advertising giant, Dentsu Inc. FMS had one client – FIFA - acting as its exclusive sales representative in Asia with respect to media rights to the 2007-2014 FIFA events. These events included the FIFA World Cup, arguably the most important and most watched sports event in the world.
In this article Julian shares his personal take on what it is like working as a sports lawyer in Asia having travelled throughout the continent and witnessed changes to the media and sports landscape first hand. Julian looks specifically at some of the more interesting recent developments in the Asian sports broadcast market, and gives some tips and guidance for conducting business in the region, whether as a lawyer or otherwise.
It was a remarkable time during which to live and work in Asia. Much of the region experienced double-digit economic growth and there were some significant sporting breakthroughs: China became the world's second largest economy and staged a summer Olympics for the first time; the Indian Premier League was born while business and the media industry in India boomed; Singapore hosted the first Asian street circuit Formula One race, and South Korea was awarded its first winter Olympics. The thirst for football throughout the continent became unquenchable.
The media landscape also changed almost beyond recognition with the entry of a host of new players into the regional pay TV market, and the real emergence of game-changing new broadcast technology.
Football is everywhere
Like Coca-Cola, football is now omnipresent in every corner of Asia.
Over the course of two FIFA cycles, and driven in part by the strength and glamour of the English Premier League, and FIFA itself, the football bug has taken hold in a number of traditionally ‘non-footballing’ countries, such as India, the Philippines and Mongolia. It's unsurprising that Asia’s share of the global audience for the 2010 FIFA World Cup event increased from 34.2% in 2006 to 40.1% in 2010.1
Indians may joke that cricket is the "number one sport, number two sport and number three sport" in their country, but the recently launched Hero Indian Super League attracts crowds of over 60,0002 and foreign properties such as the English Premier League, the Euro and the FIFA World Cup are now considered premium events for which premium rights fees are payable.
In Mongolia, you'll encounter just as many newly-converted Chelsea supporters as you will fans of wrestling, while the Philippines national team’s recent increase in fans isn't solely down to its improved performance on the pitch: apparently they have drawn female support to its ranks as a result of the handsomeness of their players.
Only the baseball-obsessed Taiwan remains a tough nut to crack.
Asian countries differ
Many European rights holders and clubs view the raw economic data and, rightly to a degree, see Asia as a region of great opportunity and further potential. However, outsiders also sometimes tend to view the continent in uninform terms or as a whole. It may seem like an obvious thing to say, but the continent is vast, and its cultures, economies and media landscapes differ enormously.
For example, a country like Indonesia - with a population of 250m, a dominant free TV market and a strong and passionately supported local football league – is a very different place to conduct sports business from, say, Singapore – where the population is under 5.5m, the pay cable operators acquire almost all key sports content and where interest in local football appears to be in sharp decline.
Similarly, while some economies and media landscapes like Hong Kong, Korea and Japan are mature, sophisticated and relatively predictable, there are many territories in which the local media industry has undergone, or will soon experience, incredible and rapid change, such as Myanmar, Vietnam and Mongolia.
A local presence
Given the above, a one size fits all approach doesn’t usually work in Asia, and unlocking any market potential requires an in-depth knowledge of each market and, ideally, a dedicated and permanent local presence. FIFA certainly experienced the benefits of having a local Asian presence with FMS, and it is of little surprise that the likes of MP & Silva, Perform, the Bundesliga, La Liga, the WTA, and clubs such as Borussia Dortmund subsequently followed this example, opening Singapore offices to handle business in the region.
Having a local presence enables you to get to grips with each market commercially and to understand its nuances, relevant personalities and local practices. It's also means you can visit clients on short notice and a regular basis, and remain on the same time zone, which is essential for building strong relationships across the region. Most importantly perhaps, it means you can truly gauge when market competition is at an optimum, and strike accordingly.
From a legal perspective, it means you are exposed to, and are in a better position to understand, relevant local legislation, can meet with local media authorities, help shape local legislation and understand the rationale behind any key legislative changes. You can also anticipate potential legal hurdles in negotiations and plan accordingly. This proved to be invaluable know-how on many occasions, for example when grappling with the uniquely Singaporean cross-carriage regulations or the delights of India's Sports Act.
The cliché applies here: rights fees are only ever determined by how much someone is willing to pay. But this is driven only in part by the raw economic indicators, such as population, advertising spend and TV households etc.
Economic data will potentially overlook other key factors, particularly in the case of a high profile and, in some markets, a ‘must have’ media event such as the FIFA World Cup. There are a host of other drivers at play, including ego, politics, long term commercial strategy and bitter commercial rivalry to be considered. If, as I found out, a Presidential candidate wants to broadcast a high profile sports event as a good news story in the run-up to an election, it's fair to assume they will be prepared to pay a premium.
Until comparatively recently, in some developing Asian markets TV piracy was endemic. Indeed, it wasn’t unheard of in years past for some national or state broadcasters simply to 'pirate' a neighbour’s World Cup feed to avoid the expense of acquiring the rights themselves. Some territories simply had no tradition of respecting or protecting intellectual property.
This has changed. Some more enlightened and determined individuals and channels, including the likes of CTN in Cambodia and Ben Moyle at Channel One in Mongolia, recognised that piracy was holding back the development of the local media industry, both commercially and from a production perspective. They’ve used events such as the World Cup, leveraging the considerable reputation and resources of the likes of FIFA, to clamp down on local pirates.
Channel One’s acquisition of rights to the 2006 FIFA World Cup3 was the first occasion on which a Mongolian TV broadcaster had directly acquired rights to any international sports event on an exclusive basis. Their broadcasts were commercialised, and their rights were enforced properly, and they made a profit. Eight years’ later, there is now a truly competitive landscape in Mongolia and TV piracy of major sports events seems to be a thing of the past.
Internet piracy is certainly not a thing of the past and continues to create problems for all major Asian broadcasters, particularly those operating in the pay sector. There is still a long way to go in the fight against global internet piracy but, contrary to some Western preconceptions, some Asian countries and organisations are now starting to take a lead in that fight.
For example, as a result of steps taken by the Chinese authorities, there has been a general clamp down on illicit streaming in China and a significant number of infringing sites now operate lawfully in the mainstream.4, 5 Similarly, as a result of some sterling work by the legal department at Sony's Multiscreen Media in India, the Delhi High Court ordered local ISPs to block over 200 rogue internet sites in the run-up to, and during, last year's FIFA World Cup.6 This was the first time an Indian court had issued such a judgment and it led to a spike in subscriptions to MSM's official World Cup website.
Asian broadcast and agency in-house teams are increasingly sophisticated and skilled. Some broadcasters, which previously wouldn’t have even used a lawyer on deals, are now employing city or US-trained lawyers who truly know their business. This trend may make things tougher and more time consuming for rights sellers (and their legal advisors) in the short term, but it reflects the growing importance of sports in the region and an increasing recognition that IP rights have significant value, and should be respected. This is benefitting the sports industry as a whole and the reputation and standing of the region's broadcasters.
Top Tips for working in Asia
- Negotiation style
There is a subtlety to negotiating in Asia: it won’t be appreciated if you try to throw your weight around, or be aggressive. Don't bring your ego into a negotiation. I've heard a number of tales from aggrieved Asian broadcasters who felt they’d been patronised, or even treated with contempt, by certain well known European sports organisations and their lawyers – the result being that the broadcasters in question were reluctant to do business with them again.
Most importantly, don’t let your counterpart ‘lose face’. If the other side has to concede on anything, give them an exit route that keeps their dignity intact, particularly when junior members of their team are present. Seek consensus, or at least appear to be seeking consensus. Expect to negotiate hard, but fairly.
If you can, walk the streets of whatever Asian city in which you find yourself. Speak to the locals. Chat with your taxi drivers. Find out what makes people tick, their viewing habits, their favourite team and food, the local politics. It's genuinely surprising how much information you pick up in a short time and how much of that information is relevant to the deal you’re doing. (You'll also find out the best places to eat!)
If you do business in Asia, you will be invited out to dinner and to drink with clients. It's an essential, and fun, part of the job. In all likelihood, at some point you'll find yourself in a karaoke bar. Come prepared. Learn a song. As I found out to my cost, tunelessly shouting Oasis songs down a microphone sometimes doesn’t cut the mustard.
If possible, as a lawyer try to avoid being introduced to a potential licensee only when the deal is ready to be negotiated. It helps a negotiation greatly if you've already built a relationship and trust before the contract is drafted.
- Keeping it simple
It's good practice generally, but if you're conducting business in markets where English is a second language, it's even more important to keep things simple. Make sure your licensees understand from the outset the scope of rights they're acquiring, how their rights can and can't be exploited and what's generally expected from them as your broadcast partner. Be open and transparent.
This means putting together a concise and easily understood tender process with clear deadlines and clear packages of rights on offer. It also means keeping your contract as short as possible, succinct, punchy and free of legalese. It also means negotiating with patience, particularly if a translator is present, and having to repeat yourself to ensure everyone in the room understands the position.
- Don’t assume it’s going to be read
If the first draft of your contract is agreed and returned without amendment, this is probably because it hasn't been read. In such cases, be prepared for some 'hand holding' and explanation of certain key terms. This might be time-consuming in the short term, but it will save you headaches and potential legal issues further down the line.
If, for example, you suspect that your broadcast licensee doesn't utilise the required encryption or DRM equipment, it's preferable from a commercial and legal perspective that they understand what is required from the outset and not after the first match of your tournament has kicked off. Similarly, if as a rights holder you have rights of approval or audit, exercise them properly and in well in advance of your event. Prevention is so much better than cure.
- It’s not always about the money
A key component of most sports rights agreements is the rights fee. The financial returns are what enable rights holders to stage events, to pay for sophisticated productions and to fund sport at a grassroots level. As a lawyer, it's exhilarating of course to work on multi-million dollar and financially ground-breaking deals, which tend to be complex, hard fought and high pressure.
However, it's possible to get just as much personal satisfaction working on deals that are important for other reasons.
I've been involved in deals for war-torn territories which included considerable sums to aid the construction of football stadia and kit for local children. FIFA's deal in Hong Kong with TVB for 2014 rights was the first time since 1998 that the World Cup right had been acquired, and all matches broadcast, by a free to air broadcaster. The deal for 2006 rights in East Timor was concluded by phone with the sound of machine gun fire in the background (which had to stop before our counterpart could run across the road to the country's only fax machine).
Having worked on the project for a long time, it was easy to overlook the global significance of the FIFA rights. Yet the fact is that, despite recent controversy surrounding FIFA, the World Cup is simply one of the world's most watched media events, let alone sports events, and has the ability to excite audiences like no other competition. Broadcasts of the 2010 FIFA World Cup reached a global audience of over 3.2 billion, over 46% of the world's population.7 The final of the 2014 FIFA World Cup attracted the highest audience ever in German TV history. The broadcast rights to 2014 were licensed to 214 countries globally and in every country across Asia, ranging from Afghanistan to North Korea to Vietnam.8
My time in Asia came to an end at the end of 2014 once everything had been wrapped up post-Brazil. My family and I have now happily settled back into life in London and I'm spearheading a push by the Pinsent Masons Global Sports practice into the world of sports broadcasting and media. It's enormously exciting to be back in London, which has changed incredibly since I last worked here in 2004, and I'm working with a great team of dynamic lawyers.
A decade out of the UK has taught me a huge amount and significantly changed my outlook as a lawyer.
For a start, it's made me realise that the world of sports broadcast rights is truly international in every sense. There is life beyond London! Many media companies and broadcast lawyers speak an international licensing language that often transcends legal training, backgrounds and mother tongues, and the jurisdiction provisions of an agreement, and location of the parties, often have little bearing on how an agreement is negotiated, and by whom. For example, when I, as an English lawyer, met in Singapore, India or Dubai with counterparts from India and their Indian lawyers, it didn't matter overly that the agreement we were negotiating was subject to Swiss law and that no Swiss lawyers were present. You may need to obtain Swiss law advice on an ad-hoc basis now and again, but what matters most is that everyone around a table truly understands the commercial context of the agreement, the business of the parties involved, and how the rights in question are going to be exploited. To be a good sports media rights lawyer you need to know the business inside and out, and I'd like to think that exposure to many of the region's best broadcasters and media companies has helped me in that regard.
You also realise that, throughout Asia, there are some exceptionally talented lawyers working in the sports industry, including many who are able to negotiate complex rights agreements in their second language (personally, I found this remarkable). The UK certainly produces its fair share of top class sports and broadcast lawyers - indeed, many of the world's leading sports marketing agencies, federations and broadcasters employ senior staff who have cut their teeth in London – which means it's easy to fall into a trap of viewing the market and the job in a very Anglo-centric manner. However, that doesn't last long when you're exposed to such a wide variety of international organisations. Whether culturally, commercially or legally it was the differences that often made life interesting, and demonstrated there is no single correct way to get the job done. The same is true to an extent of the region's broadcasters. The BBC is superb, but there are a lot of other great and highly creative and skilled sports broadcasters around the world. Travel certainly broadened my outlook.
Working on an event such as the World Cup also sharpens your legal skills immeasurably. World Cup contracts aren't negotiated and then thrown into a dusty cupboard for years. As soon as the event starts, the rights are exploited, problems may arise and the agreements must be consulted. It's a sobering thought at times that, when you're negotiating an agreement, you may be revisiting it in just a few weeks, and that someone will be poring over your drafting. For a global event such as the World Cup there's no room for error – there's simply too much at stake financially, politically, and in terms of personal and company reputation.
I loved travelling and working in Asia. I walked around Ulan Bator in minus 30 degrees, and Dubai in 50 plus; witnessed Mumbai in monsoon season, and an exhilarating women's World Cup final in Shanghai; I saw the Lions in Australia, and had a close encounter with terrorists in Jakarta. I loved our life in Singapore, a fun, vibrant, and multi-cultural state that’s ideal for raising a young family. But ultimately, despite the opportunities and experiences thrown my way, there's no place like home. Nothing beats the regular comforts of an English pub and a pint of subtle, frothy bitter.