Heavily indebted broadcaster Mediapro is set to abandon its €780m annual TV rights deal to screen French football in a move that will leave the finances of Ligue 1 teams in chaos.
After months of court-mediated negotiations, the Spanish company has agreed to return the rights to 2020-2024 Ligue 1 games but will pay only a portion of what it owes to the French league after skipping two payments since October, according to people familiar with the matter.
The league will then be free to sell the rights to another company, and has already begun talks with its former broadcaster Vivendi-owned Canal Plus. But French football and broadcasting executives expect that any new deal will be worth substantially less than the Mediapro contract, which will put huge pressure on club finances.
The agreement still has to be approved by the French commercial court.
It remains unclear when the transition to a new broadcaster will occur. L’Equipe newspaper reported that staff of Mediapro’s channel Téléfoot were told on Friday that a deal had been reached with the league and the channel would be shut down, without giving exact dates.
“There’s a practical question of how fans watch football until Christmas — it’s unclear,” said a French broadcasting executive briefed on league meetings. “There is absolute chaos here.”
It is an inglorious end to French football’s brief fling with Mediapro, which the league chose with great fanfare in a 2018 auction as a way to boost the value of the league’s TV rights above €1bn for the first time.
Football and broadcasting executives in other countries have followed the Mediapro mess closely, seeing it as a warning sign of how coronavirus-induced losses are forcing TV companies to re-evaluate how much they are willing to pay to screen games, after years of broadcast deals spiralling upwards in value.
The crisis in French football began in October when Mediapro skipped a €172m payment to the league, only the second on the contract, and said it wanted to renegotiate the price because of the damage wrought by the Covid-19 pandemic.
Jaume Roures, Mediapro’s co-founder, told the Financial Times in November that with games being played in stadiums without fans and the economy in freefall, the rights were simply no longer worth the agreed price. It then skipped a second payment due in early December.
Mediapro also put itself under court protection from creditors in a new legal process designed to help companies struggling to pay debts due to coronavirus. The manoeuvre meant the French league was powerless to enforce its contract and instead had to agree to mediation.
The moves blew a hole in the budgets of the league and its 20 clubs. The league was forced to take out €337m in loans to keep games going and players paid, including one state-guaranteed loan under a Covid-19 aid scheme.
“The whole thing has been badly mismanaged,” said one French club president, who declined to be named. “It is very sad that French football has gotten to this state.”
Agence France-Presse first reported that Ligue 1 would be taking back the TV rights.
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