2023-11-05 08:30:00
The Professional Football League (LFP) is currently negotiating to sell French football broadcasting rights to the highest bidder. Its call for tenders for domestic rights having not found any takers, discussions are currently taking place over-the-counter with potential broadcasters. The amount she gets will be critical. Indeed, TV rights to matches represent the main source of financing for clubs along with the player transfer market. Currently, the League receives 700 million euros in TV rights (624 million euros for French rights, including 42 million from the operator Free, and 80 million for international rights). Will she be able to match this amount? Not sure.
Christophe Bouchet, former president of OM (2002-2004), has just published Take control of French football money (published by Robert Laffont), a fascinating book on the history of the economy of the French championship. He returns in particular to an event which symbolizes the financialization of sport: the creation in France of a commercial company with the entry into the capital of the investment fund CVC Capital Partners, which took 13% of the capital in 2022.
Point : Are you surprised by the failure of the call for tenders for French football TV rights?
Christophe Bouchet: No, because our championship is a second division championship. It is therefore worth between 500 and 700 million euros per year as estimated by Canal+ managers. It is a convalescent championship, on a respirator, waiting for the oxygen provided by a PSG-OM or an OM-PSG. It is the result of twenty years of errors and inconsistency on the part of club presidents who did not know how to work on the “championship product”, unlike Germany, which, in addition to TV rights and transfers , has powerful marketing and a much larger popular base. Even Spain, a country smaller than France which has only two headliners, Real Madrid and FC Barcelona, has a richer championship. Today, the only strength of French football is its population of 68 million people.
However, it is said that DAZN, Amazon, Apple or other Internet giants could invest in the championship. What about it?
Apple and DAZN, who are potential investors, have already signed an agreement with Canal+. Ligue 1 no longer has the strategic value of “monopoly”. However, for twenty years, French football has lived on the strategic premium paid by broadcasters to block rights. This prevents the majority of French people from having easy access to the championship. In 2004, the French championship was worth around 350 million euros. However, Canal+ had put 600 million euros on the table to kill the TPS bouquet. Realize it! At that time, Ligue 1’s domestic TV rights were equivalent to those of the English Premier League. Today, the Premier League rights are worth around €3 billion…
In France, where the rights to Ligue 1 are estimated at less than a billion euros, it was believed that Canal+ would always pay as a last resort. We were wrong. After 2004, there were then strategic bonuses of 100 to 400 million euros from Orange or Mediapro to enter the market or suffocate it. So TPS, Canal+ and Orange have overvalued football. It’s a bit like if you had a house and you were interested in the land next door. This land is worth more than normal land since the seller knows that you want to extend your property, build a veranda or a swimming pool.
Today, virtually no one wants to enter this television rights market. In addition to having a second-tier championship, Canal+ has a sports distribution monopoly. If Canal+ doesn’t want you, as Mediapro learned to its cost, you have no way of promoting your images. In 2019, from the moment Canal+ signed a sublicensing agreement with BeIN Sports to broadcast Ligue 1 matches, it was over for Mediapro.
In your book, you sharply criticize the agreement concluded between the League and the CVC investment fund. How is it shocking?
We know that live football rights will remain a real market value for many years to come. However, CVC takes 13% of the loot every year and for life from this market value. Not just TV rights but almost all of the LFP’s revenue. For CVC, this kind of lifetime bond with a 13% return rate is the coup of the century. What is shocking is that this agreement is not limited in time. Many leaders do not realize this detail.
In addition, several clubs are cheated by this agreement. Take Olympique de Marseille. CVC pays clubs 1.1 billion euros through this agreement. The value of the two PSG-OM clubs is two thirds of the championship, so roughly 700 million. Let’s admit that PSG is worth significantly more today, so 400 million, there still remains 300 million for OM. However, OM received the same amount as Rennes and Nice, an amount of 90 million euros. If I were president of OM again, I would sue the LFP and CVC to recover 300 million euros. Likewise, how could a club like Nantes agree to receive the same amount as Clermont-Ferrand, namely 33 million euros? For me, there was no need to sign an agreement with CVC. No club was close to filing for bankruptcy.
However, many clubs are having financial difficulties…
Can you imagine PSG or OM going bankrupt? No. There was no danger in the house. The clubs have significantly reduced their value. 13% is a lot. It’s like you own a house and want to sell it, but one of the rooms doesn’t belong to you. Germany and Italy have said no to this absurd system. The 1.5 billion jackpot received from CVC flowed into the pockets of Vincent Labrune and certain leaders of the League. Thanks to the mechanism of his contract, Vincent Labrune actually received a bonus of 3 million euros for the contract with CVC. This was done without any transparency. Moreover, there are no minutes of the board of directors of the day Vincent Labrune requested this bonus. The question is why a president of a public service sub-delegation, the Professional Football League, can award himself a bonus on a contract. It’s as if the mayor of a city received money from the builder Bouygues or from real estate developers, like Nexity or Icade, for having given a building permit.
What assessment do you make of Vincent Labrune’s presidency of the LFP?
Vincent Labrune made the terrible strategic error of killing Mediapro, which was an interesting alternative player and which is today a profitable company [avec 189 millions d’euros de profit brut d’exploitation en 2022, NDLR]. He deprived himself of a competitor. For the clubs, he put in place a good strategy called “the locomotive”, which consists of saying that clubs which are European must earn much more than other clubs to be competitive. On the other hand, it did not advance the championship product. In addition, he undermined the economic value of the clubs through the agreement with CVC. The public authorities let the matter slide spectacularly. PSG was happy because the deal was very favorable to them. I find it difficult to understand how certain club presidents, like Loïc Féry in Lorient and Joseph Oughourlian in Lens, who are shrewd financiers, accepted this. But perhaps Oughourlian hopes to sell and saw the CVC agreement as a buyout bonus, like Jean-Michel Aulas in Lyon… The financialization of football is a steamroller that can hardly be stopped. But in France, it is to the detriment of the French championship, to the detriment of the clubs.
Take control of French football moneyRobert Laffont editions, 2023.
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