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Wednesday, 21 October 2020

French football stares at financial black hole with broadcasters set to hold back payments

AFP , Monday 30 Mar 2020
French Ligue 1 clubs are set to miss out on 110 million euros if leading broadcaster Canal Plus hold
French Ligue 1 clubs are set to miss out on 110 million euros if leading broadcaster Canal Plus holds back money that was due to be paid this week (AFP)
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The financial crisis facing football as a result of the coronavirus pandemic has been laid bare in France, where a decision to withhold payments due as part of a broadcast deal for Ligue 1 matches is set to leave clubs reeling.

Canal Plus, the pay TV giant and long-time broadcaster of France's top flight, stated its intention to hold back a scheduled 110 million-euro ($121 million) payment in a letter to the French league revealed by the country's leading sports daily, L'Equipe.

The money is in theory due this weekend and is the equivalent of 15 percent of the total broadcast money for the season in Ligue 1.

"In case of force majeure, when matches are no longer played, then payments are suspended," a senior management figure at Canal Plus told AFP.

"This is the perfect example of force majeure. There are no more matches, so there are no more payments. We are strictly applying the terms of the contract and we don't see why we would do it any other way. Canal Plus is not a bank."

The French top flight is the fifth-richest league in Europe although its income lags some way behind those of Italy's Serie A, the German Bundesliga, Spain's La Liga and, in particular, the English Premier League.

French clubs, like their counterparts across the continent, have been hit hard by the health crisis which had already forced matches to be postponed or played behind closed doors before UEFA suspended all club competitions in Europe a fortnight ago.

Clubs will now have to absorb the shock of not receiving money for which they have budgeted, and income from broadcasters is a huge portion of their revenue.

Indeed, payments from television companies amounted to 36 percent of total revenue for Ligue 1 teams last season, by far their biggest source of income, according to the DNCG, French football's financial watchdog. A further 25 percent came from player sales, which are likely to be affected this year too.

"They have their problems and we have ours. There needs to be a dialogue so we can find solutions," said a member of the board of the French league, the LFP. "I don't think the decision by Canal Plus is irreversible."

- Uncertainty -

L'Equipe has claimed that Paris Saint-Germain, the Qatar-owned giants who dominate the French game, stand to lose as much as 215 million euros between now and the end of June, assuming the worst-case scenario in which no more games are played and all projected gate receipts and Champions League revenues are also lost.

Several French clubs, including Lyon and Marseille, have placed their squads on partial unemployment to save money, a move that means they only pay 70 percent of salaries with the state paying the rest, albeit limited to 4,850 euros per employee.

The problems may deepen if beIN Sports, the Qatari group which also holds domestic rights to broadcast Ligue 1, chooses to hold back its own scheduled payment of 42 million euros.

French Football Federation president Noel Le Graet called on all parties "to respect their commitments, football first of all but the broadcasters too", in an interview with RTL radio.

However, with broadcasters also impacted by the crisis, further payments due to clubs in June could also be in doubt.

It also remains to be seen how the current situation impacts on next season with the French league having agreed their first broadcast deal worth over one billion euros a year starting in 2020/21 with Chinese-owned group Mediapro.

(For more sports news and updates, follow Ahram Online Sports on Twitter at @AO_Sports and on Facebook at AhramOnlineSports.)

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