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What does the Mediapro broadcast deal collapse mean for Ligue 1?

More than a few eyebrows were raised when Ligue 1 signed a lucrative 4-year broadcast deal worth around €1.15 billion per year. It was the second-highest broadcast deal in European football ahead of the Bundesliga, La Liga and Seria A. It also was a significant increase from the previous deal with Canal+ and beIN Sports which was worth €726.5 million.

The new deal was shared between Mediapro and beIN Sports who agreed to pay the LFP €814 million and €330 million a year respectively. Scepticism surrounded the arrangement as to whether the deal will really work out. All of those doubts were proven right when the deal collapsed just 4 months into the 20-21 season. LFP terminated the deal leaving French clubs, who are severely affected by the pandemic, in a financial predicament. Mediapro agreed with the league to pay 100 million euros in order to terminate the contract leaving the top 2 tiers of French football in search of a new broadcast partner.

Earlier, Mediapro had tried to strike a deal with Seria A but couldn’t reach an agreement with the governing body. Gaetano Miccichè, who was the president of Serie A at that point in time, said that the financial guarantees offered by the Spanish company weren’t good enough. However, Ligue 1 reached an agreement with them and it’s obvious that it was a mistake from the part of both Didier Quillot, who was the CEO back then, and his team.

Bob Ratcliffe, CEO of OGC Nice, opined that the LFP never sought the assurances that Serie A did. Gauthier Ganaye, former president of Nice, shared the same opinion and he was quoted saying: “What worries me is: did the league take all the necessary guarantees to make sure that Mediapro could actually deliver and pay the money they said they would? We could end up in some serious cash situation for some clubs, so that’s why I really hope the league took all the guarantees and the executives at the league did their work very diligently, to make sure there is no problem further down the line, because that could cause massive trouble to French football.”

Maxime Saada, the Canal Plus chairman, stated that Mediapro had overpaid by a good margin when the deal was agreed. “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 added. As time has proven, he was spot on.

Mediapro’s channel, Téléfoot, charged customers 25 euros per month for subscriptions. It broadcasted 8 Ligue 1 matches and 10 Ligue 2 matches every game week. Rough maths suggests that the Spanish company required 4 million subscribers to be profitable. Things seemed to be going well when Mediapro made their first payment, around 172 million euros, in August. However, they failed to pay the second and third instalments worth 172 million euros and 152 million euros.

In May, LFP had to take a state-guaranteed loan of €224.5 million to help out the clubs as they had to end the season early due to the pandemic. They also sought another loan in October after Mediapro failed to make the scheduled payment.

Reims president Jean-Pierre Caillot was vocal about the crisis French clubs are up against. “When you don’t have any TV rights money, ticketing money or hospitality money, you’ll have to explain to me how we are supposed to keep our business running,” he said.

After the termination of the deal with Mediapro, Canal Plus are the favourites to secure the broadcasting rights. However, the French company’s reported offer is only worth 700 million Euros per season. Considering the financial turmoil LFP find themselves in, they have no choice but to accept it.

The recent events will affect the financial muscle of the French clubs when it comes to the transfers and they would still be powerless to stop their top players from leaving to the top 4 leagues in European football as it happens in every transfer window. Even the champions PSG would face the repercussions, despite their superior commercial revenue in comparison with the other Ligue 1 clubs. It could really dash their hopes of landing Lionel Messi in the summer and extending the contracts of superstars Kylian Mbappe and Neymar Jr.

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