Carmichael’s Column | French football’s ‘too good to be true’ TV deal proves to be just that

Mediapro TV deal

French football is on its knees. After the collapse of its record-breaking television deal with Spanish broadcaster Mediapro, Ligue 1 and 2 clubs now face an uncertain financial future.

“The situation is f**ked.”

Even in an era of pandemic-induced incompetence and no-deal Brexit negotiations, it’s hard to comprehend how French football ended up here.

Following a 2018 auction, the Ligue de Football Professionnel (LFP) brokered a historic television deal that was set to secure the prosperity of its Ligue 1 and 2 clubs for years to come.

A large chunk of the broadcasting rights for the 2020-24 seasons were sold at a record high €3.25 billion to Mediapro, a multimedia communications group based in Barcelona. The deal secured an investment of over €1 billion each year — €814m from Mediapro, and a further €330m from long-time partners beIN Sports.

Lyon vs Lille Ligue 1

The proposed agreement would have seen French clubs receive an increase of up to 60 per cent from the previous rights. It was the second-largest TV deal in Europe, and opened up new possibilities for the league to compete with other top competitions, such as the Premier League and La Liga.

Now though, just four months into the new contract, Mediapro has been forced to hand back its rights following court-mediated negotiations. As it transpires, the media conglomerate does not possess adequate financial resources to fulfil its contractual obligations.

In order to turn a profit, Mediapro needed to attract north of four million subscribers to its sports channel, Téléfoot, where the matches are televised. That the company fell well short of the mark, to the point it had to defer only its second payment instalment worth €172m, has left many questioning just how this deal was approved in the first place.

“It's not a case of whether it's bad, more how bad it becomes,” freelance French football writer Robin Bairner tells GiveMeSport. The collapse of the deal leaves clubs teetering on the edge of financial ruin, and may force many into selling their star talent once the transfer window reopens in January.

Concerns over Mediapro’s legitimacy are nothing new. The company proposed a similar deal with Serie A, but it ultimately fell through after failing to provide Italian officials with financial guarantees, which makes it all the more baffling that the LFP didn’t investigate the deal further before signing up.

Mediapro LFP Ligue 1 TV deal

“Ligue 1 has been a great producer of talent over the years, but can't compete with other leagues financially, so struggles to retain its top players,” notes French football writer and podcaster Jeremy Smith.

“This deal was a chance to gain a level footing and offer players higher salaries in order to retain them, and even attract stars from abroad, ultimately creating better entertainment and giving sides a more competitive edge in Europe.

“Perhaps because of this, everyone — from the FFF, LFP, and club presidents — turned a blind eye to some of the warning signs and didn't cover themselves sufficiently from this kind of scenario arising.”

With other income streams, such as ticket sales and hospitality, being severely restricted due to the global pandemic, French clubs are currently operating with the help of two separate government-backed bank loans. However, with the broadcasting rights now up in the air, many are worried about simply surviving.

“When you don’t have any TV rights money, ticketing money or hospitality money, you’ll have to explain to me how we are supposed to keep our business running,” a frustrated Reims president Jean-Pierre Caillot said earlier this month.

“If the league cannot get a new loan, which is far from assured at this point, I think that in February or March there will be a lot of clubs who will not be able to pay their players and employees, because we often forget that a football club is not just 11 players.”

Rennes empty stadium

Few encapsulate this dire situation more than Lille OSC. Les Dogues currently sit atop the Ligue 1 table, but owner Gérard Lopez has already opened negotiations with Merlyn Partners over the prospect of selling the club.

Speaking recently to L’Equipe, Lopez admitted: "COVID-related difficulties and the TV rights situation means that the time might have come for a change in business model with new owners.”

The only team that may get through to the other side of this scandal relatively unscathed is Paris Saint-Germain. The Qatari-backed superclub operate in a different financial stratosphere to their adversaries, and may look to strengthen their ties with various commercial partners to help them weather the storm.

That said, freelance French football writer and Marseille fan Mohammed Ali believes the whole ordeal may accelerate conversations over a European Super League. “This shouldn't affect PSG too much, given it’s likely their partners at beIN Sports could buy back some of the rights and resume the broadcast of the league they held from 2012-18.

“In a more cynical outlook, though, this may hasten discussions of a European Super League, which will see top clubs look to ring fence their income streams so that they are not beholden to crises like the LFP is currently going through.”

PSG Kylian Mbappé

Should beIN Sports opt against expanding their broadcast deal, the LFP will be left with little choice but to scurry back to Canal+, with its tail between its legs. The relationship between the LFP and Canal+ soured last season, when Ligue 1 became the largest European league to cancel its campaign post-COVID, rather than restarting.

The official line was that the decision was made to shield players and club staff against the virus, however, many believe it had far more to do with the governing body protecting its commercial interests with Mediapro.

“In taking what appeared to be a giant step forward, French football has actually fallen further behind the rest of Europe,” says CBS Sports’ French football correspondent Jonathan Johnson.

“Although most, if not all, European leagues have, and will be, impacted by COVID, none of them had a game-changing TV deal coming in like the French. Whoever ultimately picks up the rights left by Mediapro, they will not be offering the same figures, meaning the deal might end up being negotiated down below the previous rate.”

Ligue 1 match ball kick off

Indeed, Canal+ now looks like the LFP’s best bet in securing a replacement buyer, but its reported offer of €700m/season for the broadcasting rights falls well below the value of the previous deal.

“I think that the most shocking thing in all of this — and it has some stiff competition — was the decision taken by the LFP not to insure against the failure of the Mediapro deal,” Johnson continues.

“It could have protected itself against a repeat of the messy end with Canal+, and beIN Sports' bizarre self-mediation, by taking out insurance worth between €3-5m, yet they did not for the sake of saving a few million.”

French football now finds itself in a perilous state of uncertainty. Having failed to do adequate due diligence when accepting what looked to be a dream deal, clubs now find themselves living out a nightmare that they’re struggling to wake up from.

News Now - Sport News