How Covid-19 has Crippled Ligue 1
Ligue 1 has always been the odd league out of the ‘big five’ European Leagues. It lacks the allure and the star-power of LaLiga, where perennial rivals Barcelona, Real Madrid and Atletico Madrid all duke it out for the title. It also lacks the competitiveness and the prestigiousness of the English Premier League, considered one of the best leagues in the world.
Furthermore, it lacks the history and pedigree of the Italian Serie A, where fallen giants such as AC Milan, Roma and Inter dominated European football in the 90s and 2000s and finally, it lacks the competitiveness and quality of the Bundesliga, where clubs such as Borussia Dortmund, RB Leipzig and Bayer Leverkusen challenge for the title, but fall short to Bayern Munich.
“This is a very important year for French football, given that media rights are very significantly up for the first time. There is a new broadcaster called Mediapro, a new TV channel dedicated to French football called Téléfoot, and obviously, this big shift is happening with France being world champion.”
It was to everybody’s surprise, however, when the Spanish multimedia giant Mediapro bid an astounding £1.15 billion euros per year for the TV rights of Ligue 1 in 2018. This represented a 59% increase on their previous TV rights deal, worth £750,000,000 per year. The numbers were astonishing and reignited dreams that for the first time in decades, French clubs could compete on an equal footing with their continental counterparts.
’This is a very important year for French football, given that media rights are very significantly up for the first time. There is a new broadcaster called Mediapro, a new TV channel dedicated to French football called Téléfoot, and obviously, this big shift is happening with France being world champion’, said Lorient President Loic Fery, anticipating that ‘I wouldn’t be surprised if you have top French clubs signing some UK players’. Ironically, Fery was right.
With Mediapro defaulting on their loan to the Ligue de Football Professionnel (LFP) after two months and their subscription-based service Telefoot shutting down, Ligue 1 clubs face a financial abyss. This year will prove whether French Football will disappear into mediocrity or emerge from the Coronavirus Crisis harder, better, faster & stronger.
But the question remains. Why did the LFP not seek sufficient guarantees from Mediapro, and how did the Coronavirus crisis contribute to this?
Founded by Catalan businessman Josep Maria ‘Taxto’ Benet Ferran in 1994 as his own private company to sell and distribute TV rights, Mediapro quickly grew under the stewardship of the former journalist. Taking an example from his father, who was ‘so obsessed with work that he only took 5 days of holiday a year’, Ferran entered the journalism world aged 18, taking his first job with the Diari de Lleida.
Through his sense of business acumen, Ferran quickly rose up the ranks of the television industry. In 2000, he merged another one of his own companies to form the ‘new’ Mediapro, which began to expand worldwide. In 2006 Mediapro, in conjunction with former media giant Globomedia, launched La Sexta, a free-to-air TV channel that is now one of Spain’s most viewed. On the back of this resounding success, Mediapro and Globomedia merged their operations in 2006, creating Spain’s largest TV broadcasting company both by size and revenue.
It was no surprise when Mediapro began buying the rights to broadcast the UEFA Champions League and the UEFA Europa League in 2014, with telecommunications giant Telefonica paying Mediapro £2.4 billion to secure these rights. Fresh from this resounding success, Mediapro, now controlled by the Shanghai-based Orient Hontai Capital, who had bought a 53.5% stake in 2015 were ready to expand their influence across the continent.
Ligue 1 Television Rights: Mediapro vs Canal +
Undeterred by the annulment of a mammoth £1.1 billion per year offer to broadcast Serie A from 2018-2021 due to Mediapro failing to provide Serie A with the necessary financial guarantees, Mediapro set their eyes on France.
“Mediapro’s guarantees were unacceptable and non-compliant”
With Canal +’s deal expiring at the conclusion of the 18/19 season and with lengthy re-negotiations on the horizon, Mediapro jumped the queue, surprising many. On the 30th of May 2018, the record deal was announced. Worth £1.15 billion euros per year, with Mediapro paying £885,000,000 and Qatari broadcaster BeIN Sports paying the remaining £230,000,000, the deal was seen as a huge coup for Mediapro, who finally possessed the keys to one of Europe’s biggest leagues.
‘Canal Plus bid for each of the seven lots, and for each of these lots, it was outbid by someone who had a better offer.’, said LFP chairman Didier Quillot at the conclusion of the auctions. Astounded by the amount of money offered by Mediapro, Maxine Saada, Canal +’s CEO, struck back. I am disappointed that we didn’t keep the rights but the price was completely unreasonable,” said Saada. “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 was soon proven right.
“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.”
In 2018 though, nobody cared. For the first time in decades, French football was back. Clubs nervously awaited the expiration of Canal +’s deal at the end of the 2019/20 season, eager to re-invest their new-found income in their playing squads. Then, the unthinkable happened. On the 28th of April 2020, French Prime Minister Edouard Phillipe announced that the "Ligue 1, Ligue 2, Championnat National and the D1 Feminine are definitely stopped for the 2019-20 season.", due to the Covid-19 pandemic.
Whilst other European leagues, such as the Premier League and Serie A emerged from their suspensions and played out the remainder of the season trouble-free, Ligue 1 was forced to sit on the sidelines. One cannot impose relegation when, out of a 38-match season, only 28 matches were played – representing only 74%. You can’t decree a competition – a sporting contract – completed when one-quarter of the competition is yet to be played’, raged Amiens Chairman Bernard Joannin, after his club’s relegation to Ligue 2 was confirmed. "The most logical thing would be to say we cancel everything and we start again on the situation at the start of the season, a white season’, said Lyon President Jean-Michel Aulas in March of the same year, but his and Joannin’s opposition to the suspension of the league went unheeded.
“You can’t decree a competition – a sporting contract – completed when one-quarter of the competition is yet to be played’”
Clubs such as AC Ajaccio, which was one solitary point from promotion to Ligue 1, RC Strasbourg, who had one game in hand on their Europa League rivals and Lille, who finished one point away from the lucrative Champions League were some of the clubs who lost potential millions in prize money and TV rights, setting a major precedent for European Football.
French clubs were now facing serious financial difficulties as the impacts of a suspended season began to stack up. The onus was on Mediapro to deliver on their end of the bargain and provide a vital injection of cash into Ligue 1. The first £172,000,000 instalment reached LFP bank accounts in August 2020, but in October 2020, disaster struck. Mediapro CEO Jaume Roures announced that Mediapro were withholding their second £172,000,000 instalment to the LFP.
“We have asked to speak about our contract this season because of Covid-19. It is obvious that Covid is affecting a lot of aspects of our being able to exploit our rights. We want to talk about that. We want to renegotiate the contract for this season. It has been very affected by Covid-19.”
Citing plummeting advertisement revenue on their new Téléfoot channel, Mediapro reportedly asked the LFP to delay payment of their instalment indefinitely on the 24th of September. This request was immediately denied by the LFP with a spokesperson confirming that the LFP was ‘working to ensure payment to its clubs by 17th October’
The fallout was immediate. On the 25th of October, the credit rating of Joye Media, Mediapro’s holding company, was slashed by specialist firm Moody’s, being deemed ‘high risk’ for the non-repayment of loans. In a further blow, Mediapro was given a ‘negative outlook’, indicating that further credit downgrades were possible.
"The downgrade reflects the downside risks to [Mediapro’s] credit quality following the missed payment to the French Football League and the difficulty to profitably monetise the French football rights with the current subscriber base’ said Víctor García Capdevila, a Moody’s analyst.
“The only responsible person is Mediapro.” “We had to deal with very dishonest people”, raged Lille boss Christophe Galtier and he was not alone in expressing displeasure with the Mediapro farce.
The president of minnows Nimes Olympique announced that the club would no longer be able to pay the wages of their playing staff in March if the current situation continued, whilst Reim’s owner Jean Pierre Caillot warned that “If the league cannot get a new loan, which is far from assured at this point, I think that in February or March, there will be a lot of clubs who will not be able to pay their players and employees. Because we often forget that a football club is not just 11 players.”.
Ligue 1 was in freefall.
“If the league cannot get a new loan, which is far from assured at this point, I think that in February or March, there will be a lot of clubs who will not be able to pay their players and employees. Because we often forget that a football club is not just 11 players.””
The mood soured further on the 11th of December 2020 when Mediapro announced that Téléfoot would be closing down on the 31st of January 2021, marking the end of French football’s record TV deal four months in. In sheer desperation, the LFP sought to renegotiate the terms of Mediapro’s contract with Canal +, the very outlet who were initially shunned. Canal + however, played hardball. They sought a substantial decrease on the sum paid by Mediapro, with some outlets speculating that the figure would be well below £700,000,000, significantly less than the sum paid by Canal + prior to the arrival of Mediapro.
On the 12th of January 2021, events took an even more drastic turn for the worse. At a hastily arranged press conference, Saada announced that “We have finally come to the conclusion on the Canal + side that it is in the interest of all the parties to go to a bidding process. We have therefore sent a letter to the LFP to indicate that we are giving up our rights to lot 3 which beIN Sports licensed to us’. This forfeited Canal +’s deal to broadcast two Ligue 1 matches per week, worth £330,000,000 per year to the LFP.
Canal +’s move, which leaves French football without a TV rights distributor and on the verge of financial ruin, is the latest twist in a sorry saga, which has seen the brief rise and fall of one of Europe’s most eminent leagues. Though it can be said that this entire crisis was only brought about by the Covid-19 pandemic and its crippling impact upon French Football, the conduct of Mediapro and the LFP must be also brought into question.
The LFP Chairman Quillot, who stepped down in September 2020 was reportedly sued by PSG chairman Nasser-Al-Khelaifi, a request that was thrown out by French justice system. Quillot however, offered to repay his £500,000 bonus back to the LFP, recognizing that his conduct has placed the future of Ligue 1 in jeopardy.
In following the trail of money offered by Mediapro, whose dubious conduct in this matter must also be questioned, Ligue 1 is at serious risk of dying out.
