French football is in danger of financial crisis, following the collapse of their multi-billion euro broadcast deal.
Ever since the rights were sold to Mediapro back in 2018, there have multiple warnings that things seemed too good to be true. Turns out, all the naysayers were right..
There's a lot to digest with this story, so 90min has compiled a neat explainer, detailing exactly what has happened, what is means and what could transpire in the near future. You are welcome.
What Has Happened?
In 2018, with current broadcaster Canal Plus' deal expiring, Ligue 1 and Ligue 2's television rights were up for sale.
Although Canal Plus were keen to renew their agreement, they were blown out of the water by a huge, joint bid from Mediapro and BeIN Sports. The package would earn French football a massive €1.15bn per year with the majority of the funding being provided by the former.
It was the second largest football broadcasting deal in European history and was a 60% increase on the previous agreement. For many success starved clubs, it represented a chance to close the gap on the rest of Europe, and most welcomed the news.
However, the warning signs were there from the start. Mediapro has previously tried to secure Serie A broadcasting rights, only for the deal to fall through after they failed to provide adequate proof of funding. According to the Guardian, Ligue de Football Professionnel asked for no such guarantees before gleefully accepting their money...
Then there was the issue that despite holding the rights, Mediapro had nowhere to broadcast them. The situation was compounded when Canal Plus, the nation's largest paid for channel, managed to secure the rights to the first pick of the weekend's fixtures from BeIN Sport. This decreased the importance of them needing to strike a deal with Mediapro, with the latter eventually resorting to setting up their own subscription service, Telefoot.
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Before all of this, Canal Plus chairman Maxime Saada was also insistent that Mediapro had massively overpaid.
"It was impossible for us to make these sorts of figures work and I believe it’s impossible for any actor in the sector to make these sorts of figures work," he said back in 2018.
Sure enough, that is exactly what has happened. After making their first payment without any issue in August, Mediapro asked for a deferral for the one due October. They blamed the delay on the financial effects of the coronavirus, but an equally important reason was their failure to sell adequate Telefoot subscriptions to cover the mammoth cost of the deal.
After a case in the commercial courts it was agreed that Medipro would pay €100m of the outstanding €324.8m owed so far, but the remaining 90% of the €3.25bn promised over the next four years has evaporated.
What Could Happen in the Future?
For the time being, Ligue 1 and Ligue 2 will continue to be shown on Telefoot, but the LFP are keen to negotiate a new broadcast deal as soon as possible. They are currently in talks with previous partner Canal Plus but the broadcaster are currently offering below the €700m they paid before 2018.
At the moment, French clubs are surviving on government loans. However, the chances of another one of these being handed out in the future is slim, according to Educations and Sports Minister Jean-Michel Blanquer.
Without financial assistance, there is a real possibility of many clubs facing bankruptcy in March and April when the broadcast money runs dry.
Could Other Clubs Capitalise on This?
In short, yes. They absolutely could and probably will.
With many sides in dire straights, they may be forced into selling their prized assets to stave off the threat of financial collpase.
Even clubs with Champions League revenue could be in trouble. This may affect the future of Rennes wonderkid and Real Madrid target Eduardo Camavinga. Those without this extra income, such as Lyon, Nice, Monaco are even more likely to see their squad's raided in January.