How the LFP wants to better manage the marketing of TV rights

The LFP wants to review the way in which TV rights for professional championships are sold (photo illustration).

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• The Professional Football League met in General Assembly Thursday afternoon.

• It validated a first stage of modifications to its statutes, notably opening the possibility of creating a commercial subsidiary.

• The latter, if it sees the light of day, would be responsible for all of the League's economic activities, in particular the marketing of TV rights.

After a morning of discussing the urgent question of conciliation with Mediapro, the members of the board of directors of the LFP began another project on Thursday afternoon.

Less spectacular, but just as vital, because it represents the very first step towards an in-depth overhaul of the management of French football.

We are talking about a modification of the statutes of the Professional Football League, in order to open the door to the creation of a commercial company.

In short, the latter would be in charge of all the economic activities of the League, in particular the marketing of TV rights.

Alone or with the help of one or more investors.

The sea serpent

Let us take, to illustrate the point, the recent example of Italy.

After having approved in September the creation of a company dedicated to the marketing and management of TV rights, the Serie A clubs validated in November the offer of a trio of private investors, which undertook to inject 1.7 billion euros.

In France, this project does not date from the recent setbacks with Mediapro.

Pushed by the biggest budgets of the championship, which want a simplified governance and in the era of time, it comes back regularly on the carpet for three years.

In February 2018, already, 16 elite clubs had voted for a text to "initiate the process of creating a development company in which Ligue 1 clubs would be shareholders".

Mandatory passage through the legislative?

Elected boss of the LFP in October, Vincent Labrune has made this subject a priority.

“I want to transform French professional football so that it regains weight, credibility and power.

It is vital to review the structures of this sport and the culture that surrounds it, he observed in an interview with the

early November.

The challenges are many.

Our competitions must first be reinvented.

We have to rediscover sporting uncertainty, increase the competitiveness of our clubs and create a fertile ground that will make it possible to attract new investors and partners in order to generate new resources.

"

This process is therefore finally launched.

But the form remains unclear.

The idea of ​​a company with shareholder clubs, as in the Premier League, was the one favored by the locomotives of the L1 (PSG, OM, OL).

It comes up against a legal obstacle.

Jean-Christophe Breillat, lawyer specializing in sports law at CDES Conseil, explains:

The LFP is an association law 1901, it can create a commercial company but cannot put in it elements which come under its mission of public service.

The organization of the championships is part of this, as is everything that concerns the marketing of the exploitation rights of these competitions.

Essentially, TV rights.

"

Breaking this lock would require a sport code change.

So a new law.

This does not appear to be the government's priority at the moment.

The League could fall back on a "commercial subsidiary", as it indicated in a statement Thursday, but that may not be enough to solve the problem.

Everything in its time.

This does not prevent the League, in any case, from launching the reflection.

“Will the shareholding of this entity be the League as EURL (as sole shareholder), the League + the clubs, the League + the clubs + the Federation + other external investors?

This can take many forms, explains Me Breillat.

For the moment, the League is at the first stage, that is to say to put everything in legal form, and to establish safeguards so that this commercial development is not the seed of potential drifts.

"

Of course, recent news around Mediapro is not a very good advertisement for opening up to an unknown player in the French market.

And the ultimate goal of an investment fund will always be to make a profit, without necessarily worrying about the sustainability of things or the link to maintain with amateur football, to speak of one of the missions granted to the LFP.

Beyond the uncertainty on the legal form, the most interesting in this history of commercial company is in what it could bring to French football.

Basically, "perpetuate this industry (...) and bring it in line with the times," Labrune said in his interview.

Why how ?

What does this mean, concretely?

Well, we have to support the new ways of consuming sport.

“We are at a turning point.

This is the end of the golden age of cable, Canal +, Sky or ESPN, which for the past 30 years broadcast their images in a "linear" fashion, explains Arnaud Simon, former CEO of Eurosport and now president. of the company In & Out, specialized in new distribution methods.

We are entering the digital age, with a more affinity-based mode of consumption, on platforms that combine several offers.

These historic broadcasters are changing, by the way.

"

The end of "cash registers"

An observation that throws a harsh light on the failure of Mediapro, by the way.

As expected by many, its economic model - a channel at 25 euros per month to see only football - could not work in 2020.

In this transition, the Leagues have a decisive role to play.

"They can no longer be content to be cash registers, to sell their product to a broadcaster by telling it" make it grow "and wait for the profits to fall behind, believes Arnaud Simon.

They are forced, there, to put their hands in the engine to create value from their product.

Right holders will have to behave more like companies, which will develop a business, and get involved much more concretely.

They can no longer delegate this part.

"

How could French football have failed at this point with Mediapro?

via @ 20minutesSport https://t.co/1irkaBSalG

- 20 Minutes Sport (@ 20minutesSport) October 16, 2020

This engagement can be done on different models.

In Japan, for example, the Football League agreed to renegotiate a longer-term deal with DAZN (a subscription sports streaming service, created in 2015 in England, seen as a "sports Netflix" and which will be (set up in France soon) for the period 2017-2027, for an annual amount lower than what it envisaged but in exchange for an interest on the income generated by the increase in subscriptions to the platform.

To talk about another sport, in the United States, the PGA Tour sold its rights for the period 2019-2030 to Discovery.

The two entities then joined together to create a joint venture to broadcast golf tournaments on a global OTT platform.

They thus share the risks and the benefits.

Far behind the rest on international rights

More recently, the Bundesliga announced that it would create a trading company in which it would bring in investment funds of around 30% to manage its international rights.

The German League also has plans to create with Charlton (an Israeli audiovisual group) a digital platform for broadcasting its content in the Middle East region.

This would be a way to inflate the revenues of its international rights.

The Bundesliga is lagging behind in this area.

According to a study by the firm KPMG, it currently receives 240 million euros per year, against 371 for the Italian Serie A, 897 for the Spanish Liga and 1.58 billion for the English Premier League.

Ligue 1 in all this?

We are almost ashamed to write it.

It is far, far behind with only 80 million per year.

What makes Arnaud Simon say that the Bundesliga project "is interesting because close to what one could imagine for Ligue 1, at least for the idea of ​​bringing in a fund for international rights".

The most important point according to him:

The Bundesliga is master of its own destiny.

She has a strategic vision, a roadmap, and she creates a trading company to implement it.

She is aware that she has to create it because she needs capital, skills and international vision.

"

This brings us to an essential element, to which the LFP will have to give all its attention if it goes through with its approach.

Economically weakened by the Mediapro fiasco, the League will have to avoid rushing headlong towards the first investor who would offer a little fresh money.

The inflow of funds should not be a matter of survival, but of financing a battle plan.

“The commercial company and openness to funds have an inevitable side, on condition of remaining lucid and master of its strategic destiny, warns the former boss of Eurosport.

There are safeguards, but we have seen lately that this is not always a guarantee.

Setting up a trading company is not a solution in itself.

It is a tool to transform.

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"Why not, but for what objectives, for which League, tomorrow?"

"

Cédric Roussel does not say anything else.

The deputy LREM, president of the study group on the economy of sport at the National Assembly, is the one who led the hearings to understand how the LFP had come to this with Mediapro.

The question of the commercial company does not excite him, especially in the current context.

“This crisis shows that we need a global reflection on the governance of the League and the economic model of French clubs.

And all this will not be resolved by the creation of a commercial company, he asks.

So why not, but for what objectives, for which League, tomorrow?

I am expecting a global project from the LFP.

"

A whole model to rethink

This is the meaning of the current debates that are agitating French football, which also include the return of a Ligue 1 to 18 clubs and the fight against piracy, which reached new heights in 2019. The crisis triggered by the Covid- 19 and Mediapro, which will strongly impact the entire ecosystem, "must be an opportunity to raise awareness for French football," said Jean-Michel Aulas, ardent defender of change, in an interview with Les

early December.

In the ropes, French football has a whole model to rethink.

The conciliation between the LFP and Mediapro, which will inevitably lead to lowered TV rights, should come to an end in the coming days.

Finally.

It will be high time, then, to look ahead.

“To conduct long-term thinking, you still need to be calm in the short term.

There, it's a question of survival, ”notes Cédric Roussel.

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