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Ligue 1's financial worries

The collapse of a television deal has caused serious problems for Ligue 1, emphasising the reliance of football on broadcasting rights.

 The deal would have been worth £670 million annually across Ligue 1. Mediapro, the company looking to make a splash by wrestling packages away from long-term broadcaster Canal+, made one payment of £130 million last August before defaulting on the rest when subscriber numbers dramatically undershot their expectations.

That left black holes on balance sheets across the country, and even though Amazon Prime emerged into the market last month to agree fresh terms, the deficit has only been partially closed. They paid just £215 million a year for the same number of Ligue 1 games as Mediapro had planned (eight per week) — a reduction on the previous deal of more than two-thirds.

The issue is compounded because Canal+ are taking legal action over the sale of those rights. A partner since 1984, they were not given chance by Ligue 1 to submit a fresh bid and are instead stuck paying inflated fees for their package (£283 million per year for two games each week), which was driven up by Mediapro’s original offer. As Canal+ press ahead with suing Ligue 1, the financial horizons appear even more uncertain.

French football has always seen player trading as a significant revenue stream but now, at certain top-flight teams, the pressure is becoming acute, and Premier League clubs are scanning to see if extra value can be gained from acting in this window.

A senior source at a Ligue 1 side says: “French clubs in general are very dependent on player sales to balance the budget. This was the case before the pandemic and before the TV rights’ crisis. Now the situation is more unbalanced.”   I would add that clubs across Europe have become more reliant on the volatile revenue source of player sales.

The financial regulatory body for clubs in France’s top two divisions, the Direction Nationale du Controle de Gestion (DNCG), is taking a hard stance on finances, sending a letter this summer to all teams stating categorically it wants books to be balanced during the summer. Those who do not comply face the prospect of an owner being forced to put a deposit down to guarantee their club can reach the end of the season. “If guarantees are not given, the club will not be allowed to start the league,” a source says. “There is, therefore, a hugely pressing need for most French clubs to sell players this summer.”

The DNCG took dramatic action last week by relegating Angers and Bordeaux, who have been in administration, over financial concerns. Both are appealing the verdict. There are also worries about St Etienne.

  

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