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    As France Chases Title at Euros, Its League Faces a $400 Million Hole

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    French soccer teams could face economic disaster after a television partner said it would refuse to honor its contract. Transfers, salaries and budgets hang in the balance.French soccer’s new television deal was supposed to save the league and its clubs from a financial meltdown.Instead, it may have made a bad situation worse.Soon after France’s top soccer league, Ligue 1, announced this month that it had enticed Amazon to become its lead broadcaster, its longtime television partner, Canal Plus, reacted with fury.Canal Plus would neither pay for nor broadcast the two games per week it owned the rights to, the company said. Not at the premium price in its contracts, at least. And certainly not when Amazon was paying roughly $100 million less for four times as many games.“Canal Plus will not, therefore, be broadcasting Ligue 1,” the company said in a statement.The implications of the Canal Plus threat for the cash-strapped French teams could not be more serious. Already reeling from the effects of the coronavirus pandemic and the collapse last year of their league’s $1 billion television contract, clubs across France that had been planning to trim their budgets now face an urgent crisis.While Amazon has agreed to broadcast eight games a week for little more than $300 million per season, Canal Plus was on the hook to pay almost $400 million for the two games a week it had picked up in a previous rights auction. Now that it is refusing to pay, many clubs have entered the summer player-trading market worried less about sales and signings than about the possibility of bankruptcy.And they may have only weeks to find a way out.The chaos behind the scenes at the French league is in sharp contrast to the international image of French soccer, burnished by the success of its World Cup-winning men’s team. France started its quest for the European championship last week with a serene display against Germany, tied Hungary on Saturday in Budapest and remains the favorite to lift the trophy next month.Benjamin Pavard and France were held to a draw by Hungary on Saturday but the team remains a favorite to win Euro 2020.Pool photo by Bernadett SzaboMost of the players on France’s Euro 2020 roster play for clubs outside of France, but nearly all got their start with French teams. Now those same clubs are trying to plan for a future they cannot predict.Can they afford to sign new players to strengthen their squads? Can they even meet the payrolls for the ones they have? Or is it wiser now to be sellers — even in a depressed pandemic market? The answers may determine how many teams enter the season with their financial futures in doubt.“If you are not able to renegotiate player salaries you are risking bankruptcy — it’s as simple as that,” said Pierre Maes, the author of “Le Business des Droits TV du Foot,” a book on the soccer rights market.The deal with Amazon came as a shock to many who thought that a monthslong rights-fee dispute between the league and Canal Plus — a league partner since the network’s inception in 1984 — would be resolved by a win at auction for the French network. But Amazon was picked over a joint offer from Canal Plus and its Qatari partner, beIN Sports.Canal Plus executives have publicly expressed concern about Amazon, with Maxime Saada, the network’s chief executive, telling the business publication Challenges that the power of Amazon posed the “biggest danger” to the business model of Canal Plus. “We have to dodge them permanently,” he said. Perhaps underlining that power, a top French soccer official said the league was not prepared to turn down an agreement with a company as significant as Amazon, believing that a bet on the e-commerce giant was a bet on the future.But the outcome has introduced yet more uncertainty for a league that has been in a tailspin since it announced in 2020 that it would not be able to complete the 2019-20 season because of the pandemic. France was the only one of Europe’s top leagues to take the measure.Almost as soon as it returned to the field for a new season, though, the league was quickly convulsed by a second — and perhaps far more serious — crisis. Late last year, Mediapro, the Chinese-backed company 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 its three-year deal, Mediapro surrendered the rights to French soccer and walked away.Canal Plus picked up the pieces, taking over Mediapro’s games at a discount, but it soon found itself in its own dispute with the league.The Canal Plus chief executive Maxime Saada, who said the company would not pay a multimillion-dollar rights fee or even broadcast French soccer games.Pool photo by Thomas SamsonAfter learning that the price Amazon had paid for the rights to its matches was lower than the one Canal Plus was contracted to pay for fewer (and less high-profile) games, the network argued that it should no longer have to spend 332 million euros ($394 million) for the rights that it sub-licenses from the Qatari broadcaster beIN.“Canal Plus will not pay 332 million euros for 20 percent of the matches, when Amazon broadcasts 80 percent for 250 million euros,” Saada told L’Équipe.While in many ways the situation in which Ligue 1 finds itself is particularly French, the collapse of the rights market in the country is only the most recent example of the plummeting value of soccer rights in Europe more generally. In recent auctions for television rights in Italy and Germany, the leagues in both countries ended up getting less than in their previous deals.England’s Premier League, the world’s richest domestic competition, required special government dispensation to roll over an agreement with its current partners to avoid a risky auction. And Spain’s top league will change the way it sells its rights to mitigate against what is likely to be a major drop-off in the price it can command.“My conclusion is that in France the bubble has burst and it’s actually what I’m forecasting to become a reality in other countries, too,” Maes said.The value of the Canal Plus rights is substantially lower since the collapse of the Mediapro deal, Canal Plus argued before the latest auction. It demanded that the league renegotiate the price or include its rights in the auction to find Mediapro’s replacement.The league refused and a court in France sided with it, saying Canal Plus had failed to demonstrate how it had been harmed.But while the network is preparing new litigation, and contends it can make its case, Amazon and the league are looking forward.“Ligue 1 football has a new partner and an exciting future,” Alex Green, the managing director of Amazon’s sports programming for Europe, said after the company’s biggest soccer deal to date was announced. “We won’t let you down.”For France’s top-flight teams, the joy of having a new, deep-pocketed partner has been quickly tempered by the potential loss of hundreds of millions of dollars from Canal Plus.Some French club executives, like the Olympique Lyonnais president Jean Michel Aulas, predict that Canal Plus will back down. “I do not see at all how Canal can deprive itself of having 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 is standing firm. Its first payment is due Aug. 5. At the moment, it has no plans to pay it.The rupture is significant. The relationship with Canal Plus — which has overcome previous disputes — has underpinned the economics of the French league for decades. The strain of the pandemic even led to intervention from government officials, including President Emmanuel Macron, who called on the network to play its role when the league’s finances started to teeter.Lille won the French club championship this season even as it moved to trim its budget.Denis Charlet/Agence France-Presse — Getty ImagesLigue 1’s president, Vincent Labrune, met with Canal Plus’s Saada several times before the auction, and warned him that a lowball bid for the broader rights package on offer could lose out should a rival emerge. 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 the bad blood between the league and its main partner started to escalate.The bitterness, according to many commentators, clouded the negotiations and led to an outcome in which the only winner appears to be Amazon, which through the deal secured majority rights to a top European soccer league for the first time.“It’s very opportunistic because Amazon has profited from a very emotional situation,” Maes said.A league board member involved in the decision said Ligue 1 was confident Canal Plus would have to honor its contract, and that under French law action could be taken within 15 days if the money is not paid.But for French clubs who need to decide now on budgets, players and plans for next season, that may be too late. More

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      French Soccer Faces Financial Crisis After MediaPro Pulls Plug

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      #masthead-section-label, #masthead-bar-one { display: none }What to WatchBest Movies on NetflixBest of Disney PlusBest of Amazon PrimeHoliday TVBest Netflix DocumentariesAdvertisementContinue reading the main storySupported byContinue reading the main storyFrench Soccer Faces Financial Crisis After Broadcaster Pulls the PlugThe sudden collapse of a billion-dollar television contract has created a serious cash crisis for French clubs as the January transfer window nears.MediaPro paid a record price to broadcast matches in France’s top soccer leagues in 2018. Last week, it walked away from the deal.Credit…Charles Platiau/ReutersDec. 15, 2020, 2:00 a.m. ETThe record-setting television deal was, in hindsight, far too good to be true.The billion euros the upstart media company had promised to pay to televise French soccer matches each year represented an increase of 60 percent on the league’s previous television deal, and much more than any other bidder had offered. It was a sum so large — about $1.2 billion a year — that it led officials from the league and the club executives on its board to ignore obvious warning signs; to brush aside the fact that the company making the offer, MediaPro, had no history in French soccer; and to close an agreement without the type of bank guarantees that might have ensured that all that money would eventually arrive.And then the deal simply vanished.Last week, arbitration talks between the Ligue de Football Professionnel (L.F.P.), the governing body for professional soccer in France, and MediaPro, a Spanish broadcaster now controlled by Chinese interests, ended with the company handing back the four years of rights under its control and less than a third of the more than 300 million euros it owes for games this season.The resolution has left league officials frantically searching for a new television partner, and teams facing a very different financial future.For the clubs, the repercussions may be immediate. Instead of being flush with enough cash to build teams to rival those in Germany and Spain, most French teams are facing restructuring measures, starting with the sale of players when Europe’s player trading window reopens in January.MediaPro’s chief executive, Jaume Roures, had bet billions that he could resell the French soccer rights his company had acquired to other partners.Credit…Franck Fife/Agence France-Presse — Getty ImagesOne team director described the situation as “a total disaster.” The chief executive of another one said the situation — coupled with the continuing financial effects of the coronavirus pandemic — was “hugely damaging.” The president of the French champion Paris St.-Germain, Nasser al-Khelaifi, asked the league’s new leaders to conduct a full investigation into the process that ended in catastrophe for France’s teams. Al-Khelaifi is also chairman of beIN Media Group, a rival to MediaPro for rights.What may hurt most, at least from the teams’ perspective, is that it is a crisis of their own making.The trouble began in the spring. As all of Europe’s major soccer leagues plotted ways to reboot, the French league announced it would be the only one not to complete its suspended campaign.A government decree ended the season early, forcing Ligue 1 to tap a national loan program to ensure its teams did not fall into financial ruin. Only the prospect of record-breaking broadcast revenues, set to take effect with the start of the MediaPro deal this season, softened the blow.The agreement, signed in 2018, had been trumpeted as groundbreaking then, a contract worth more than a billion euros per season (about $1.2 billion) for rights to matches in France’s top two domestic divisions. That symbolic figure was one that team executives had long hoped to realize, and one so large that it led them to part ways with the league’s partner, Canal+.But the financial boost — MediaPro had agreed to pay almost 60 percent more than the previous agreement — also led teams to spend more on recruitment in the last off-season, a decision that many are now regretting.“They had anticipated the higher TV rates, and this comes as a shock for most people,” said the chief executive, who asked not to be identified because talks to stabilize the league’s finances continue. He predicted some clubs would look to foreign investors to bail them out in return for heavily discounted equity or outright sales.The French league includes world-class players like Kylian Mbappé and brands like Paris St.-Germain and Olympique Lyonnais, but many of its clubs struggle to match the spending of rivals in England, Spain and Germany.Credit…Yoan Valat/EPA, via ShutterstockSome of the comfort that led the clubs to spend freely can be traced to ebullient comments made by MediaPro’s chief executive, Jaume Roures, at the height of the pandemic’s first wave in the spring, when global sports had stopped and the French league’s main broadcast partners at the time, Canal+ and beIN Sports, announced they would suspend their rights payments.In April, Roures, in an interview with the sports daily L’Equipe, vowed to take over the broadcast rights to French games early if the season restarted in the summer and the league’s partners, Canal+ and beIN Sports, opted out. “To be a good Samaritan is to pay what you owe,” Roures said at the time.But a closer look at the deal French league officials signed with MediaPro, a company started by Roures and two partners that is now largely controlled and financed by a little-known Chinese group, suggests several red flags were ignored in pursuit of the richest offer.MediaPro would not have been allowed to enter the auction for the French rights, for example, had the league not changed the tender process to allow agencies like MediaPro, which did not have a platform in France to broadcast games, to take part.Then, after the agreement was struck, it took several months for an official contract to be signed, and when it was it did not include the type of bank guarantees that would have proved MediaPro would be able to make good on the payments it had promised.French soccer officials are scrambling to find a new television partner before the end of the year.Credit…Daniel Cole/Associated PressThere were other warning signs, too. Another huge deal signed by MediaPro, the stunning capture of rights to Italy’s Serie A, collapsed around the same time it was in talks about its French acquisition. Part of the reason was the company was unable to provide a guarantee for much of the amount it had promised the league.And four years ago, the company’s business practices came under further scrutiny when a United States affiliate, Imagina Media Audiovisual, was implicated in the FIFA bribery scandal. Earlier this year, Gerard Romy, one of MediaPro’s founders, was charged with wire fraud, money laundering and racketeering conspiracy in connection with the case.Roures had looked to blame the impact of the coronavirus when he called for the French league to renegotiate its MediaPro deal in October. But with stadiums largely off-limits to fans, viewing figures for soccer have remained robust across Europe; in some cases, ratings have soared.Didier Quillot, the L.F.P. chief executive who led the tender process, left his post in September with a payment of about $1.8 million, much of which was based on his negotiating the deal with MediaPro. Quillot in recent days has said he is prepared to repay any bonus he received that was linked to the rights sale.MediaPro’s troubles started when it failed to secure 100 percent of the rights, losing a crucial package that included the first pick of the week’s top game to beIN Sports, a Qatar-backed broadcaster. BeIN sold those rights to Canal+, reducing the need for the network, France’s biggest pay television operator, to make a deal with MediaPro for the other games.Unable to find a home for its matches, MediaPro started a subscription service for them, Téléfoot.Credit…Bertrand Guay/Agence France-Presse — Getty ImagesThat left MediaPro holding expensive rights without the most viable outlet willing to buy them. Seeking a way out, it sought to start its own channel, Téléfoot, which had little to offer subscribers beyond the matches it had bought. Sales of subscriptions offered on other, smaller platforms failed to reach meaningful numbers, though, leaving MediaPro to burn through millions of dollars with little hope of breaking even.Faced with that crisis, MediaPro failed to make a payment of 172 million euros ($208 million) when the French league started its new season in October. It skipped another one for 152.5 million euros this month.MediaPro moved to defend itself from litigation by taking advantage of new laws passed to protect companies during the coronavirus crisis. Unable to insist on recouping what it was owed, the French league was forced into a mediation process that ended last week with MediaPro agreeing to return only 100 million euros ($121 million).“Clubs are desperately in need of cash; that’s why the league has accepted this very bad offer from MediaPro,” said Pierre Maes, a consultant and author of “Le Business des Droits TV du Foot,” a book on the soccer rights market.The league — which has so far kept its teams afloat with bank loans in lieu of the missing broadcast payments — is now scrambling to find a television partner, most likely Canal+, to come to the rescue. One thing is almost certain: The price the league will be forced to accept will not be celebrated in the manner the MediaPro deal was.“Whatever can be done to deliver cash to clubs, they’ll do it,” Maes said. He predicted that any new agreement for the rights now could bring about half of what MediaPro had promised to pay.“Canal+ is today in a position to correct the market,” he said.AdvertisementContinue reading the main story More