Will Mediapro cause an industrial disaster in Ligue 1?

The television rights of Ligue 1 soon sold off at a low price?

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• Mediapro has announced that it wants to discuss the contract that binds it to the LFP until 2024. 

• A drop in rights would have heavy financial consequences for French football. 

• TV rights represent an important part of their income. 

When it comes to TV broadcasting, Ligue 1 often offers an exceptional show.

Before making fun of it, let's say straight away that we're not talking about the quality - random - of the matches, but the new

around TV rights.

With two very high level actors.

On the one hand, Mediapro, main broadcaster of the championship since this summer via the Telefoot channel.

A Spanish audiovisual giant which already broadcasts La Liga, the Spanish championship.

On the other, the Professional Football League (LFP), which has placed its trust in him for the period 2020-2024.

A tense face-to-face which could cause (economic) victims.

It all started with the revelations of the newspaper

Wednesday evening.

According to the daily, Mediapro would have asked the LFP for additional time to settle a deadline of 172 million euros expected on October 6.

The League refused, which it confirmed in a concise statement released on Thursday.

In the process, the president of Mediapro, Jaume Roures, speaks in the sports daily and lets go these few words which make all club leaders shudder: "It is obvious that the Covid affects many aspects of the exploitation of [TV] rights (…) We want to renegotiate the price ”.

And obviously not on the rise.

"Cataclysm"

"The receipts [from TV rights] that we expected within the clubs on October 17 may not arrive" admitted this Thursday Frédéric Longuépée, president of the Girondins de Bordeaux, even speaking of a possible "cataclysm" to come for the French football, if ever the promised sums were not paid.

Because Mediapro is supposed to spend 800 million euros per year to broadcast the matches, a record sum for Ligue 1. “When the 2020-2024 TV rights were awarded, the clubs anticipated a sharp increase in their revenues on the same period, recalls Pierre Rondeau, economist specializing in sport.

Budgets have therefore been revised upwards, notably with an increase in player salaries and contract extensions ”.

All these good financial projections could be called into question if Mediapro were to default, plunging the clubs into serious economic difficulties.

The three scenarios of the apocalypse

The scenario is all the more worrying as, as Frédéric Longuépée reminds us, “the football economy in France is very tele-dependent”.

“On average, TV rights represent 36% of club revenue,” explains Pierre Rondeau.

And the worst part is that the means to compensate for a possible loss are very rare.

Ticketing ?

The matches are currently played in front of 1,000 to 5,000 people maximum, sometimes behind closed doors, so we might as well forget.

Merchandising and sponsors?

Supporters have other priorities than buying a jersey for 90 euros, and possible partner companies are also looking to reduce their spending with the Covid crisis.

The transfers ?

“The summer transfer window was a disaster, asserts Pierre Rondeau.

Out of twenty Ligue 1 clubs, only five have made a profit ”.

Suffice to say that any discussions between the LFP and Mediapro on the price of TV rights will be scrutinized very closely.

“There are three scenarios, explains Pierre Rondeau.

First case: the League accepts the postponement of the payment and Mediapro ends up paying, possibly with penalties.

It is the least worst of the solutions.

Second case: Mediapro obtains a discount, but the other broadcasters (Canal +, Free) could also ask for the same, and the clubs will lose money.

Third scenario, the worst in my opinion: the League considers that Mediapro does not fulfill its obligations and breaks its contract ”.

The totally innocent LFP?

In the latter case, this would mean that the LFP would have to launch a new call for tenders for the period 2021-2024.

“But given the context, no one will put in the same amount as Mediapro,” assures Pierre Rondeau.

On the contrary, there is a risk that fees will be sharply reduced ”.

This episode is therefore likely to leave traces, and Mediapro is not necessarily the only one to blame.

"The request to renegotiate the rights can be legitimate," says Pierre Rondeau.

With the coronavirus, advertising revenues are falling, the bars which broadcast matches and which pay a subscription are closed ”.

Added to this is a general public subscription campaign that is struggling to convince, while Mediapro is targeting 3.5 million subscribers in the long term.

"It's lukewarm," conceded Jaume Roures in his interview with

.

According to the economist, the LFP would have placed its trust too easily in the foreign broadcaster: "it did not ask for any financial guarantee, it only has a" joint guarantee "from a third party, namely the Chinese shareholder of Mediapro.

".

In hindsight, it might have been a bit light for 800 million euros.

A priori we require less bank guarantees to buy the rights to Ligue 1 than to rent a T2 in Paris.

- Fédé 🇫🇷 de la Lose (@FFLose) October 7, 2020

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Who broadcasts Ligue 1 in France?

For the period 2020-2024, three players share the TV rights for each day of the championship (10 matches):

• Mediapro

  , via its Telefoot channel, broadcasts 8 exclusive meetings.

  The channel is also entitled to the 10 best posters of the championship (PSG-OM, OM-OL…).

• Canal +

  broadcasts the two remaining meetings per day.

• Free 

  does not offer live matches but offers extracts of each match (such as goals for example) slightly delayed.

• TV rights

• Sport

• Economy

• Soccer

• League 1