By wanting to cross the milestone of one billion euros in annual TV rights for L1 in order to catch up with its European neighbors, the Professional Football League got into trouble with the award in May 2018 of the main prizes from the call for tenders to the new Mediapro entrant without requiring a bank guarantee. Two and a half years later, in debt, the main broadcaster of Leagues 1 and 2, via its Téléfoot channel, publicly asked on October 8 for a payment deadline and the renegotiation of TV rights (814 million per year). The League refuses and gives notice to the operator to settle its second deadline (172 million euros) due on October 6, threatening to turn to other broadcasters, while specifying to have activated “The guarantee given by the parent company of the Mediapro group”, the Chinese fund Orient Hontai Capital, which holds 53% of the capital. While the League announced that it was obliged to take out a loan to pay it to the clubs, the chained Duck unveiled on October 14 that the Sino-Spanish group has placed itself under the protection of the Nanterre commercial court, a procedure that allows renegotiating or rescheduling debts and debts …
How to explain the failure of Mediapro, which would have attracted less than 400,000 subscribers?
Jean-Francois Brocard From the start, all observers who know the market wondered how Mediapro could get a return on its investment. Their project was too ambitious. Previously, beIN Sports had already lost a lot of money buying rights to various sports, then it was RMC… Mediapro’s weakness is that its channel only offers football. To this were added a basic offer at 25 euros per month, numerous technical problems, the Téléfoot channel which is not available on all satellite packages, nor on the Internet… There is also piracy, young people prefer to watch streaming internet matches rather than paying.
How to exploit and make profitable the television rights, then?
Jeans-Francois Brocade A priori, the solution would not be a channel with fixed programs but rather to get closer to the consumer, via a system called “OTT” (over the top), by offering him plenty of programs on the same competition accessible on the Internet or via televisions. In the United States, this exists in the NFL, the American football championship, which has its own channel, the NFL Game Pass, which offers matches, shows, the best moments… There is no continuous program , the viewer chooses à la carte.
What would be the consequence of non-payment of TV rights for the clubs?
Jeans-Francois Brocade Already impacted by the lack of ticketing revenue and the low transfer amounts during the summer transfer window, clubs could quickly find themselves in default of payment and no longer be able to pay salaries and charges. For the Nîmes club (L1), rights represent 70% of its income, Angers 62%, Reims and Lille 60% and many clubs are above 50%. A majority do not have a big stadium, nor big sponsors. Only PSG, which has a lot of commercial income, is not dependent on TV rights, which represent around 9% of its income.
Could amateur football also be affected?
Jeans-Francois Brocade There would be a direct impact via the Buffet tax, which is levied on the amount of TV rights (5%) and allocated to the National Sports Agency to finance all amateur sport, and also at the level of the agreement between the League and the federation, which provides for 2.5% of TV rights for solidarity between professional and amateur football.
If a new call for tenders takes place, the League will no longer be in a strong position …
Jeans-Francois Brocade It is possible that the channels get along because there is no more war between Canal Plus beIN Sports. But the broadcasters cannot offer too low a price either, because otherwise they would no longer give the clubs the means to produce a quality show and therefore they would devalue their own product.
Jean-Michel Aulas, president of Olympique Lyonnais, thinks that we must turn to the giants of online content with a single portal as the access route to the matches …
Jeans-Francois Brocade This is nothing new. These actors stay at the corner of the wood and observe for the moment. A single major player, a football Netflix, would not play in favor of the clubs because the presence of several players ensures competition and drives up prices. The Football League has in fact always been lucky with Canal Plus, then the appearance of TPS, then beIN Sports and then RMC Sport…
We must ensure a downward translation of income. A new economic model that would promote more human, more egalitarian, more balanced, more sustainable and less speculative football.
The economic model of football is running out of steam, what alternative could be put in place?
Jeans-Francois Brocade Football must reinvent itself because the numbers have become crazy. We knew that this “speculative” bubble would explode one day, the health crisis precipitated its explosion. We must ensure a downward translation of income. A new economic model that would promote more human, more egalitarian, more balanced, more sustainable football, closer to supporters and territories and less speculative. The great luck is that all the countries and therefore the championships are affected by this health crisis, so everyone must react.
Concretely, what do you propose?
Jeans-Francois Brocade I launched a project, “For a new alternative regulation of professional football”. The idea is to build a credible and comprehensive plan B. We are already working with FIFPro (International Federation of Professional Footballers Associations), with fellow English economists, lawyers and political scientists, potentially with UEFA tomorrow, which is interested. This model would promote operating balances, because clubs today at the accounting level are in structural operating deficit, compensated or not, but generally not compensated, by exceptional results such as sales of players or write-offs of debts and all of this is not sustainable. Then we would have to work on the ownership of club capital, which is relatively free today with shareholders who come from all over the world. The idea would be to bring together the capital of the clubs of the territories even if it means that there is a devaluation of the clubs because anyway we are going straight ahead… Rather than doing it in a catastrophic framework, let’s plan. The transfer market is going to dry up sooner or later, forced or natural, and we will therefore have to find ways to balance the exploitation of clubs.
Interview conducted by Nicolas Guillermin