While France is chasing the title at the EM, its league is facing a $ 400 million hole

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French football’s new TV deal was supposed to save the league and its clubs from a financial crisis.

Instead, it may have made a bad situation worse.

Shortly after France’s top football league Ligue 1 announced earlier this month that it had led Amazon to become its leading broadcaster, its long-time television partner Canal Plus reacted with anger.

Canal Plus would not pay for or broadcast the two games per week it owned the rights to, the company said. At least not at the premium price in his contracts. And certainly not when Amazon paid around $ 100 million less for four times as many games.

“Canal Plus will therefore not broadcast Ligue 1,” the company said in a statement.

The consequences of the Canal Plus threat to the financially weak French teams couldn’t be more severe. Clubs across France that were planning to cut their budgets have already been hit by the impact of the coronavirus pandemic and the collapse of their league’s $ 1 billion television deal last year.

While Amazon agreed to broadcast eight games a week for just over $ 300 million per season, Canal Plus had to pay nearly $ 400 million for the two weekly games it picked up in an earlier rights auction. Now that it refuses to pay, many clubs have entered the summer market worrying less about sales and signings than about the possibility of bankruptcy.

And they may only have weeks to find a way out.

The chaos behind the scenes of the French league stands in sharp contrast to the international image of French football, which has been polished up by the success of its men’s world championship team. France started their fight for the European Championship last week with a quiet performance against Germany, divided Hungary in Budapest on Saturday and remain the trophy favorites for next month.

Most of the players in France’s Euro 2020 squad play for clubs outside France, but almost all of them started with French teams. Now the same clubs are trying to plan for a future they cannot predict.

Can they afford to sign new players to add to their squad? Can they even meet the payrolls for those who have them? Or is it wiser now to be a seller – even in a depressed pandemic market? The answers can determine how many teams start the season with doubts about their financial future.

“If you are unable to renegotiate players’ salaries, you risk bankruptcy – it’s that simple,” said Pierre Maes, author of Le Business des Droits TV du Foot, a book on the football rights market.

The deal with Amazon came as a shock to many who thought that a month-long dispute over rights fees between the league and Canal Plus – a league partner since the network was founded in 1984 – would be settled by an auction win for the French network. However, Amazon was selected based on a joint offer from Canal Plus and its Qatari partner beIN Sports.

Canal Plus executives have publicly voiced their concerns about Amazon, with Maxim Saada, the network’s CEO, tell the business publication challenges that the power of Amazon is the “greatest threat” to Canal Plus’ business model. “We avoided them permanently,” he said. A senior French football official may underscore that power by saying the league is unwilling to turn down an agreement with a major company like Amazon because a bet on the e-commerce giant is a bet on the future.

But the result has created even more uncertainty for a league that has been on a downward slide since the 2020 announcement that it would not be able to finish the 2019-20 season due to the pandemic. France was the only one of Europe’s top leagues to take this measure.

However, almost as soon as they got back on the field for a new season, the league was quickly shaken by a second – and perhaps much more serious – crisis. Late last year, Mediapro, the China-backed company with which the league signed a record-breaking television deal, announced it was unable to meet its commitments. Less than three months into his three-year contract, Mediapro gave up the rights to French football and left.

Canal Plus picked up the pieces and took over the games from Mediapro at a discount, but soon found themselves in their own dispute with the league.

After the network learned that the price Amazon paid for the rights to its games was lower than what Canal Plus had to pay for fewer (and less high-profile) games, the network argued that it was no longer $ 332 million Was to spend EUR 394 million on the rights it was sublicensing from Qatari broadcaster beIN.

“Canal Plus does not pay 332 million euros for 20 percent of the games when Amazon transmits 80 percent for 250 million euros,” Saada told L’Équipe.

While the situation that Ligue 1 finds itself in is particularly French in many ways, the collapse of the rights market in the country is just the latest example of the depreciation of football rights in Europe in general. In the recent auctions for television rights in Italy and Germany, the leagues in both countries got less than their previous deals.

England’s Premier League, the richest national competition in the world, required special government regulation to renew an agreement with their current partners to avoid a risky auction. And Spain’s top league is set to change the way it sells its rights to mitigate a likely significant drop in the price it can fetch.

“My conclusion is that the bubble has burst in France and I predict it will be a reality in other countries, too,” Maes said.

The value of Canal Plus rights has been significantly lower since the collapse of Mediapro, argued Canal Plus before the last auction. It requested that the league renegotiate the price or include its rights in the auction to find a replacement for Mediapro.

The league refused, and a court in France stood aside, saying Canal Plus had not proven how it was harmed.

But as the network prepares new litigation and claims it can enforce its case, Amazon and the league are looking ahead.

“Ligue 1 Football has a new partner and an exciting future,” said Alex Green, managing director of Amazon’s sports program for Europe, after the company’s largest football deal to date was announced. “We do not let you down.”

For France’s top teams, the joy of a new, deeply pocketed partner was quickly dampened by the potential loss of hundreds of millions of dollars to Canal Plus.

Some French club managers, like Olympique Lyonnais President Jean Michel Aulas, predict that Canal Plus will step down. “I don’t see how Canal can evade Ligue 1 access,” said Aulas, a member of the French league’s television rights committee.

However, according to senior executives at Canal Plus, the company stands firm. The first payment is due on August 5th. At the moment she has no plans to pay them.

The break is significant. The relationship with Canal Plus – which has overcome previous disputes – has fueled the French league’s economy for decades. The strain from the pandemic even led to intervention from government officials, including President Emmanuel Macron, who called on the network to play his part as the league’s finances began to falter.

Ligue 1 president Vincent Labrune met with Canal Plus’ Saada several times before the auction, warning him that a low bid on the broader package of rights could lose should a rival emerge. Saada and Canal Plus considered this unlikely after the league failed to sell the rights in a January auction that was not attended by Canal Plus or beIN. But the bad blood between the league and their main partner escalated.

The bitterness, so many commentators, clouded the negotiations and led to a result in which the only winner seems to be Amazon, which has secured majority rights in a top European football league for the first time through the deal.

“It’s very opportunistic because Amazon benefited from a very emotional situation,” Maes said.

A league board member involved in the decision said Ligue 1 is confident that Canal Plus will have to honor its contract and that, under French law, action can be taken within 15 days if the money is not paid.

But for French clubs now having to decide on budgets, players and plans for the next season, that could be too late.

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