French football trembles at an unexpected scenario. The French Professional Football League (LFP) promised them very happy after the bidding process for national television rights for the 2020-2021, 2022-2023 and 2023-2024 seasons, which secured more than one billion euros. euros per season. But the dream has turned into a nightmare. And the main European leagues look askance at what happens in France.
The situation that French football is going through could be the beginning of a change in trend that marks a decline in the value of audiovisual rights. Without forgetting that the Premier League, the reference league, saw how in the last sale of rights (for the cycle of the 2019-2020 to 2021-2022 seasons), the operators paid almost 700 million euros less for the first five lots.
The economist Josep Maria Gay de Liébana warned Palco23 a few days ago that he doubted that “television is really going to be able to continue holding the money it contributes to football”, After the change in habits derived from the pandemic and the growth of other competitors in the entertainment sector such as Netflix or HBO. Everything will depend on the audience.
Television, the manna of football
Soccer has a clear dependence on television: without their income it would be impossible to maintain the current business model. The money from the sale of audiovisual rights represents 52.6% of the operating income, on average, of the five main European leagues (LaLiga, Premier League, Bundesliga, Serie A and Ligue 1) according to the report Annual Review of Football Finance 2020 the Deloitte.
In the case of Ligue 1, in 2018-2019, television revenues represented 47% of total club revenues (€ 901 million out of a total of € 1,902 million), so without them the French professional football is unsustainable, especially in a context of generalized crisis and no public in stadiums.
Olympique de Lyon, one of the main clubs in Ligue 1, closed the 2019-2020 season with a loss of 36.5 million euros, after reducing its revenue by 12% to 271.6 million. The main income item continues to be television rights, which contributed 97.6 million, 20% less than in 2019. Worse was the case of Paris Saint-Germain, which closed the course losing 125 million euros. And the current season doesn’t seem like it’s going to give them a break.
LaLiga is not alien to this reality. Television represented 54% of the total income of the clubs as a whole in 2018-2019. And the annual accounts of the clubs to which Palco23 has had access reveal how there are cases in which the weight of audiovisual income rises to 80%, as happened with Levante UD, Real Valladolid or CA Osasuna, demonstrating that its viability economic passes through the manna of television.
The French soccer experience
Mediapro undertook to pay 814 million euros per year for 80% of the television rights for the 2020-2021 seasons until 2023-2024. While Canal +, through a sublicense agreement with beIN Sports, acquired lot three of the audiovisual rights of French football (two Ligue 1 matches per day) in exchange for 330 million euros per season.
The alarm signal went off when Mediapro was unable to meet its payment commitment in October amounting to 172.3 million euros. The production company requested in November to renegotiate its agreement with the LFP, asking for a 25% reduction in the value of the contract in the 2020-2021 season, and did not pay a second installment of 152.5 million euros in December. The case ended up in the hands of the Courts: through a mediation process, the LFP and Mediapro agreed to break the agreement with a final payment from the production company of 100 million euros.
The first non-payment of the Spanish company forced the board of directors of the French Professional Football League to approve the request for a loan of 112 million euros with which to pay the clubs by providing them with liquidity to face their ordinary operations, in a year marked by a general drop in income with the stadiums closed.
The French league is left without its main source of income: television after the Mediapro default and the resignation of Canal +
The French league received a new jug of cold water from Canal +. The chain ruled out keeping the rights that Mediapro had left vacant and has even gone one step further, returning the rights of the two matches it had in its possession, having paid so far to broadcast the competition until next February 5.
The LFP is facing the situation that the agreement with Mediapro for its Téléfoot channel to broadcast the matches it had assigned ends on January 31, and the alliance with Canal + may end a week later if the station complies with its threat to return the assigned lot. The LFP has decided to open a new tender only for the packages that the producer had, while Canal + considers that it is necessary to open a process for all rights.
The new tender for the audiovisual rights of the French leagues will take place next week, get moving Sports business, with the intention that it be an accelerated process that lasts little more than ten days instead of six or eight weeks as usual to guarantee that a new station supplies the more than 800 million of Mediapro.
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