Broadcasting rights: a structural issue threatening to demolish the house of French football

French football is at a crossroads. Following the early termination of a lucrative deal with Mediapro, and subsequent legal disputes between several broadcasters and the French professional football league (Ligue de Football Professionnel, LFP), the sale of Ligue 1’s broadcasting rights is once again under the spotlight. 

In this blog post, we take a closer look at the recent battles between the LFP and broadcasters before the French Competition Authority (FCA), and consider how these have played a part in the ongoing attempts of public authorities to save French professional football.

Where it all started: Mediapro’s demise and the LFP’s (excessive?) appetite

In France, the broadcasting rights for professional football are sold via a tender procedure organised by the LFP in several separate packages. While historic French broadcaster, Groupe Canal Plus (GCP), was competing only with Qatari channel beIN Sports for the 2016-2020 broadcasting rights, the Chinese-Spanish group Mediapro entered the race for the 2020-2024 period. The LFP sold the broadcasting rights of Ligue 1 and Ligue 2 for a record sum of EUR 1.14 billion per year to Mediapro (EUR 814 million for 80% of the broadcasting rights) and beIN Sports (EUR 332 million for the remaining 20%). beIN Sports later sublicensed its rights to GCP for the same price. 

Following the early termination of the Mediapro deal in December 2020, the LFP decided to arrange a new tender for the 80% broadcasting rights package previously attributed to Mediapro, while beIN Sports / GCP would still have to pay their previously agreed share for the 20% broadcasting rights package. The situation became tenser still when the LFP decided to award the 80% package to Amazon for EUR 250 million, i.e. a lower price than the price paid by beIN Sports / GCP for a much smaller portion.

The view from the FCA: the LFP did not abuse its dominant position

Complaint 1 (GCP)

GCP strongly disagreed with the LFP’s refusal to include its 20% portion in the new tender process. It sued the LFP before the Paris Commercial Court and filed a formal complaint with the FCA for the LFP’s alleged abuse of dominance, seeking to rely on two sets of practices:

• Imposition of unfair trading conditions: According to GCP, the new tender should have included all broadcasting rights. By not doing so, the LFP imposed unfair trading conditions, as (i) the broadcasting rights were not sold at the same time, (ii) the price paid by GCP was artificially high, and (iii) other potential bidders did not have to bear any initial costs.
  
  The FCA recalled that the LFP must protect the interests of French professional football clubs by maximising revenues stemming from the sale of commercial rights and products. As such, its decision was both necessary and proportionate to reach such objectives. The contract agreed with GCP was perfectly valid, and its termination would negatively impact French professional football, as it is likely that the 20% portion of broadcasting rights would have been sold for a lower amount than the sum agreed with GCP.
• Abusive discrimination: GCP also argued that the absence of the broadcasting rights indirectly held by GCP in the new tender amounted to abusive discrimination between potential bidders. The LFP would be selling several packages of a same product (Ligue 1 matches) in different competitive conditions (2018 vs 2021).
  
  The FCA also rejected this argument, explaining that the LFP had sold the broadcasting rights following a process which complied with the framework set out by the FCA (i.e. transparency, absence of discrimination). There was nothing preventing GCP from submitting a bid like any other potential bidder, with the same opportunities. 

Both actions were accordingly rejected, and the appeals filed by GCP were also set aside. 

Complaint 2 (GCP and beIN Sports)

GCP and beIN Sports then challenged the attribution of the broadcasting rights to Amazon for EUR 250 million before the FCA. GCP insisted that paying EUR 332 million for 20% of the French broadcasting rights when Amazon would only spend EUR 250 million for 80% of the same rights defied logic and would amount to abusive discrimination in favour of Amazon. 

The FCA found these arguments insufficiently substantiated: (i) all potential bidders were given the opportunity to participate and Amazon made the best offer following a tender procedure in line with applicable rules, (ii) each contract entered into with a broadcaster must be executed independently and not in consideration of the other contracts, and (iii) the limited duration of broadcasting contracts (i.e. four years maximum) limits the risk of a dominant undertaking maintaining high prices in the long run, despite a change of circumstances.

Both complaints were rejected by the FCA in November 2022.

Complaint 3 (Mediapro)

Finally, Mediapro filed a complaint before the FCA against GCP. It claimed that GCP had abused its dominant position in the pay-TV distribution market by implementing various practices designed to foreclose Mediapro from the pay-TV sports channel market. Such practices were alleged to include unacceptable financial and commercial conditions for the distribution of its Téléfoot channel, disparaging remarks regarding Mediapro’s services, and loyalty offers that tie in consumers over a long period. 

The FCA rejected Mediapro’s complaint for lack of priority as the facts did not justify the mobilisation of significant internal resources, a judgment of the Paris Commercial Court of January 2023 already dealt with the claims and the Téléfoot channel had ceased broadcasting in 2021.

The race to save French football: the approach to date

To avoid another “Mediapro episode”, and in recognition that broadcasting rights are the most stable and important (alongside player transfer fees) source of income for most French professional clubs, there is a consensus that French professional football must be protected by public authorities, with an overhaul of the current broadcasting rights system.

Following a report by the French National Assembly, several measures have been envisaged to date:

• Recent FCA opinion on measures adopted by the Government: The FCA was asked to give its opinion on a recent draft decree issued following the French National Assembly's report (adopted in September 2023), which extended the duration of broadcasting rights from four to five years. The FCA was circumspect, and considered that while there was no obvious competition law concern resulting from the draft decree, it still doubted that it would have any positive impact on competition.
• Opening up to private investors: In 2022, the LFP decided to create its commercial subsidiary (MediaCo) to manage the broadcasting and commercial rights of French professional football. The LFP, backed by Ligue 1 and Ligue 2 football clubs, agreed to sell a 13% stake in MediaCo to a private investor (the investment fund CVC Capital Partners, CVC) worth EUR 1.5 billion. In the short term, this leads to a significant injection of cash in French professional football clubs. However, CVC will receive 13% of MediaCo dividends resulting from the broadcasting rights, sponsoring rights and other relevant commercial contracts, which was seen by some clubs as a significant loss for them and French football as a whole. Ligue 1’s Le Havre Athletic Club recently took the LFP to court, seeking the termination of its agreement with CVC on that basis. 

A crisis brewing for French professional football?

The failure of Mediapro in the context of the Covid-19 pandemic and the various legal proceedings from which GCP has emerged bruised and battered, have had a major (and now measurable) impact. In what may be an act of retaliation, GCP refused to participate in the tender for the period 2024-2029. The agreement between the LFP and CVC also raises questions about the way in which French football will be financially organised going forward. 

The LFP had feared a drop in bids due to the non-participation of GCP in the recent tender; and it ultimately didn’t receive any bids meeting its EUR 1 billion target, creating great uncertainty for domestic football clubs. As it stands, direct negotiations will take place with the various market players, leaving the finances of Ligue 1 clubs in doubt for the time being. Watch this space.

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