Ligue 1: 5 questions on Mediapro’s formal notice to pay its due to the LFP

September 7, 2020 by No Comments

► What contract binds the LFP and Mediapro?

May 2018, a year and a half before the stalemate in French football, Mediapro won the call for tenders launched by the LFP. TV rights are then sold for a record amount in France of 814 million euros per year. An increase compared to the 762 million annual corresponding to TV rights for the period 2016-2020. An agreement including the LFP, through the voice of its then president Nathalie Boy de la Tour, welcomed: “This is a successful tender, with a significant increase in our TV rights.”

By winning this call for tenders, the Sino-Spanish group undertook to create a 100% football channel, called today Telefoot, to broadcast the French Ligue 1 and Ligue 2 championships for the period 2020-2024.

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Ligue 1: “The industrial risk is proven”, declares the deputy Cédric Roussel about Mediapro

► Why has Mediapro just been put on formal notice?

Mediapro refused to pay its October bill. This amounts to 172 million euros. Consequently, Arnaud Rouger, executive director general of the League, announced, in a letter addressed to the clubs, to have “put in default” the Sino-Spanish group and to act on the guarantee given by the shareholder.

“Mediapro has placed itself under the protection of the Commercial Court of Nanterre as part of an ad hoc mandate procedure, explains Arnaud Rouger, we were therefore bound by a strict obligation of confidentiality since last week in order not to put the LFP in default. “ Before continuing: “This was followed by a response from Mediapro which was totally unacceptable in view of the financial uncertainties for the clubs. We therefore applied the contract which binds us with Mediapro and put them on notice to settle the deadlines for the 1st and October 5, while activating the guarantee given by the parent company of the Mediapro group (the Chinese fund Orient Hontai Capital). “

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TV rights: Why does Mediapro's attitude worry French football?

TV rights: Why does Mediapro’s attitude worry French football?

► What is Mediapro trying to achieve?

President and founder of Mediapro, Jaume Roures clearly announced his intention to “renegotiate the price” Ligue 1 and Ligue 2 TV rights on October 8. For its part, the LFP firmly opposes it, believing that the reason given, the crisis due to Covid-19, was not admissible. According to The chained Duck, the Sino-Spanish group, whose basic offer amounts to 25 euros per month, would have attracted only 278,000 subscribers after two months of competition. “A figure far below what they had certainly expected “, believes a source close to the matter. From the start too, some had expressed doubts about the financial strength of the group, which is nearly 53% owned by a Chinese investment fund, Orient Hontai Capital.

Just before obtaining the rights to L1, the consortium, for lack of financial guarantees, was excluded from the race for TV rights in Italy. The LFP had moreover accommodated itself to an absence of financial guarantee by contenting itself with a joint guarantee from its main shareholder. At the end of April, the financial rating agency Moody’s downgraded the rating of the holding company that owns the group, Joye Media, to B3 against B1 previously, which corresponds to a “high risk” non-repayment or delay in repaying credits.

“There is a liquidity problem. We underestimate the importance of the fact that the initial economic model was not playable”, valued Arnaud Simon, former boss of Eurosport France and consultant in digital strategy, in comments collected by AFP. “They found themselves forced to launch their channel (Téléfoot) on an untenable model and it ended in an industrial disaster.”

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Mediapro already wants to renegotiate the amount of TV rights, French football under strong pressure

Mediapro already wants to renegotiate the amount of TV rights, French football under strong pressure

► How do the clubs react?

Faced with this situation, and according to information from The team, the LFP would have taken out a loan of 120 million euros from a foreign bank. The daily also mentions an option allowing the League to obtain a possible second loan in December. The general assembly of the League, scheduled for next Monday, will definitively ratify this operation.

Several leaders were quick to react. Anonymously, an executive told RTL that “Mediapro committed suicide”. For his part, Jean-Michel Aulas, never the last to speak, left his little comment: “Not to be worried would be to make a mistake, a professional misconduct, there are obviously a number of clubs which can find themselves in great difficulty.” Also, the president of Olympique Lyonnais does not see “what interest would Mediapro have in not paying, because he would put himself in an extremely fragile legal situation “. Finally, the most vehement actor turns out to be André Villas-Boas, coach of Olympique de Marseille.

“I’ve never seen this in my life. A guy (Jaume Roures, boss of Mediapro) presents himself as the great savior of French football and now he doesn’t have the money to pay the contract, it’s absurd. ” Before making fun of the situation. “I too can dream of a house in Beverly Hills for 20 million euros but I cannot buy it. So I am not going to make an offer to buy it.”

► Therefore, what solutions are available to the LFP?

Separation from Mediapro now seems inevitable, to such an extent that the League is already looking for a new broadcaster. The LFP thus hopes to seduce Vivendi, owner of the historic broadcaster Canal +, but also BeIn, thanks to Qatar, the main funder of French football and Paris Saint-Germain. GAFA (Google, Apple, Facebook, Amazon) are also in the race. Asked about it, Jean-Michel Aulas had also defended this idea. “You need a Deezer or a Spotify football”, he had wished.

Historical broadcaster of French football, Canal + could then make a remarkable comeback on the front of the stage. According to AFP, the batch of Mediapro (8 L1 matches per day, editor’s note) does not interest Canal + as a whole and must be divided before considering an agreement. For the anecdote, at the signing of the contract with Mediapro, Maxime Saada, group president Canal +, had given an almost premonitory speech on Europe 1. “It was impossible for us to bet these sums and I believe that it is impossible for any actor to bet these sums, to make them profitable, it would take about 7 million subscribers at 15 euros per month. don’t see how an actor can make that profitable. ”

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