As France chases down the title at Euro, its league faces a $400 million hole

French football’s new television deal was intended to save the league and its clubs from a financial meltdown.

Instead, it would have made the bad situation worse.

France’s top soccer league, Ligue 1, announced this month that it had lured Amazon to become its major broadcaster, with its longtime television partner, Canal Plus, reacting with fury.

The company said Canal Plus would neither pay nor broadcast two games per week. Not at the premium price in its contracts, at least. And certainly not when Amazon was paying nearly $100 million less for four times as many games.

“Canal Plus will not broadcast Ligue 1,” the company said in a statement.

The implications of the Canal Plus threat could not be more dire for the money-strapped French teams. already upset effects of coronavirus pandemic and fall last year Out of their league’s $1 billion television contract, clubs across France who were planning to cut their budgets now face an immediate crisis.

While Amazon has agreed to air eight games a week for a little over $300 million per season, Canal Plus was on the hook to pay about $400 million for the two games a week, which it claimed. The last rights were picked up at auction. Now that it is refusing to pay, many clubs have entered the summer player-trading market, less concerned about sales and signings than the prospect of bankruptcy.

And they may only have weeks to find a way out.

The behind-the-scenes chaos in the French league is in stark contrast to the international image of French soccer, which is fueled by the success of the World Cup-winning men’s team. France began its search for the European Championships last week Quiet demonstration against Germany, tied with Hungary on Saturday in Budapest and remain the favorites to lift the trophy next month.

Most of the players on France’s Euro 2020 roster play for clubs outside France, but almost all made their debuts with French teams. Now the same clubs are trying to plan a future they cannot foresee.

Can they sign new players to strengthen their squad? Can they also complete payroll for the people they have? Or is it wiser to be a seller now – even in a gloomy pandemic market? The answers can determine how many teams enter the season when their financial future is in doubt.

Pierre Mays, author of “Le business des droits tv du fut”, a book on the soccer rights market, said, “If you’re not able to renegotiate a player’s salary, you risk going bankrupt – that’s as much.” It’s that simple.”

The deal with Amazon came as a shock to many, who thought that a months-long rights-fee dispute between the league and Canal Plus – a league partner since the network’s founding in 1984 – would lead to the French network. Will be sorted by winnings in the auction. But Amazon was selected on a joint offer from Canal Plus and its Qatari partner, beIN Sports.

Canal Plus executives, along with the network’s chief executive officer, Maxim Saada, have publicly expressed concerns about Amazon. The Challenges of Telling a Professional Publisher That Amazon’s power presented the “biggest threat” to Canal Plus’ business model. “We have dodged them permanently,” he said. Perhaps underscoring that power, a top French football official said the league was unwilling to turn down a deal with an important company like Amazon, believing that a bet on the e-commerce giant was a bet on the future.

But the result has presented more uncertainty for a league that has been in a tailspin since it was announced in 2020 that it would not be able to complete the 2019-20 season due to the pandemic. France was one of the top leagues in Europe to measure.

Almost as soon as it returned to the ground for a new season, however, the league was hurt by a second – and perhaps far more serious – crisis. Late last year, Chinese-backed company MediaPro, with which the league had signed a record-breaking television contract, announced it could not meet its commitments. Less than three months after the start of their three-year deal, Mediapro surrendered the rights to French soccer and left.

Canal Plus took over MediaPro’s games at a discount, but it soon found itself in a dispute with the league.

Upon learning that the price Amazon paid for the rights to its matches had been contracted to pay for a Canal Plus one less (and less high-profile) game, the network argued that it now cost 332 million euros. Should not. ($394 million) for the rights that it sub-licenses from Qatari broadcaster beIN.

“Canal Plus will not pay 332 million euros for 20 percent of matches, when Amazon broadcasts 80 percent for 250 million euros,” Saada told L’Quip.

While in many ways the position in which Ligue 1 finds itself is exclusively French, the collapse of the rights market in the country is the most recent example of the declining value of football rights in Europe. In recent television rights auctions in Italy and Germany, leagues in both countries received less than their previous deals.

England’s Premier League, the world’s richest domestic competition, needed special government arrangements to enforce a deal with its existing partners to avoid risky auctions. And Spain’s top league will change the way it sells its rights, which is likely to be a major drop in the price it can command.

“My conclusion is that the bubble has burst in France and in fact I am predicting this to become a reality in other countries as well,” Mace said.

Canal Plus rights have been significantly undervalued since the collapse of MediaPro, Canal Plus argued ahead of the latest auction. It demanded that the league renegotiate the price or include its rights in an auction to find a replacement for Mediapro.

The league refused, and a French court supported it, saying Canal Plus failed to demonstrate how it had been harmed.

But while the network is preparing for new lawsuits, and claims it can make its case, Amazon and the league are looking ahead.

“Ligue 1 football has a new partner and an exciting future,” said Alex Green, Amazon’s managing director of sports programming for Europe, after announcing the company’s biggest football deal to date. “We won’t let you down.”

For France’s top-flight teams, the joy of having a new, deep-pocketed partner is quickly overshadowed by a potential loss of hundreds of millions of dollars from Canal Plus.

Some French club officials, such as Olympique Lyonnais president Jean-Michel Aulas, predict that Canal Plus will return. “I don’t see at all how the Canal can deny itself access to Ligue 1,” said Aulas, a member of the French League’s television rights committee.

But, according to senior Canal Plus executives, the company stands firm. Its first payment is to be made on 5th August. As of now, there are no plans to pay for it.

Breaking up is important. The relationship with Canal Plus – which has sparked past controversy – has underpinned the economics of the French league for decades. The tensions of the pandemic also led to the intervention of government officials, including President Emmanuel Macron, who called on the network to play its part when the league’s finances dwindled.

Ligue 1, president Vincent Labrun, met with Canal Plus’ Saada several times before the auction, and warned him that a lowball bid for the comprehensive rights package on offer could be lost if an opponent emerges. Saada, and Canal Plus, considered that unlikely after the league failed to sell the rights in a January auction in which neither Canal Plus nor beIN participated. But tensions began to grow between the league and its main partner.

According to several commentators, the bitterness clouded negotiations and led to an outcome in which the sole winner appears to be Amazon, which secured majority rights to a top European football league for the first time through the deal.

“It’s very opportunistic because Amazon has benefited from this very emotional state,” Mays said.

A league board member involved in the decision said that Ligue 1 was confident that Canal Plus would have to honor its contract, and that if the money was not paid, action could be taken under French law within 15 days. .

But for French clubs who still need to decide on budgets, players and plans for next season, it may be too late.

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