First clouds above the proposed marriage between TF1 and M6: a body of the Competition Authority said it was unfavorable to this union supposed to create a French television giant but the channels said they wanted to maintain their engagement.

This long-awaited report points to "significant competition problems", particularly in television advertising, said Tuesday evening the chairman of the management board of the M6 ​​group, Nicolas de Tavernost, on the sidelines of the publication of the half-yearly results of his group.

A merger to counter Netflix

"The nature and extent of the remedies required in the investigation report would make the project of the parties lose all relevance, which, in this case, would abandon it", then jointly declared TF1, M6 and their respective shareholders - the Bouygues and RTL-- groups, in several press releases.

These measures “would not make it possible to build a coherent industrial project”, insisted Mr. de Tavernost, proposed as future CEO of the new group.

The two channels are counting on this merger to weigh against new digital players, such as Netflix, which are eating away at the viewing time of traditional television, raising the price of audiovisual programs and are now investing in the advertising market.

Response within three weeks

TF1 and M6 ask the Autorité de la concurrence to consider their market share taking into account these new global players.

The two groups initially hoped for “synergies” estimated between 250 and 350 million euros.

However, the parties concerned do not intend to give up and intend for the time being "to maintain the project as it was presented".

They plan to respond to the Competition Authority within three weeks, before defending their merger during hearings scheduled before the Authority's college on September 5 and 6.

Ad prospects penalized

The final decision expected in October will be up to this college, which is not required to follow the advice of the investigation services.

A merger of TF1 and M6 would create a French giant in the market for audiovisual rights, channel distribution and television advertising, with around 75% of French turnover in the latter sector.

Announced in May 2021, the project is supposed to be finalized in early 2023, after also having received the agreement of Arcom (ex-CSA), scheduled for November.

The M6 ​​group presented mixed results for the first half on Tuesday.

Its turnover, at 664 million euros, rose by 3% over one year, thanks in particular to the resumption of the cinema activity, indicated Mr. de Tavernost.

But advertising revenue, stable from January to June with 530 million euros, presents less encouraging prospects for the second half of the year.

This is partly explained by the absence of sporting events during the summer compared to the previous year, when M6 broadcast 8 Euro 2020 football matches, and by the economic context which leads advertisers to a certain "wait-and-see attitude", specified the leader.

The increase in expenses linked to the merger project and the decrease in an audiovisual tax credit also weighed on the group's net profit, which fell in the first half by 22.4%, to 92.5 million euros.

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  • Television

  • TF1

  • M6

  • Advertising

  • Merger