French football rights failure suggests content clamour could be cooling

France’s football governing body has failed to sell off a premium packages of content rights to top-flight games, not due to lack of interest, but because the interested parties declined to meet its reserve price.

The ongoing saga of football rights in France is a long and complex saga, but to put it as succinctly as possible: Mediapro agreed to pay through the nose for most of the rights to the top two leagues for the 2020-2024 period, but subsequently did not make the required payments and ended up handing back the rights late last year. Other players are interested in picking up said rights, but not at the same price point, leaving French football in something of a sorry state.

February brought the latest in a long line of developments in the debacle. The Ligue de Football Professionnel (LFP) met on Monday to analyse offers for two sets of audiovisual rights to matches from Ligue 1 and Ligue 2, the rights formerly awarded to Mediapro. Hopes were high, with the LFP had received offers for the rights from three major international groups: Amazon, Eurosport owner Discovery, and sports streaming service DAZN. Comments on Twitter suggest Amazon was the popular choice.

However, no deal was reached. “As the reserve prices were not met, the consultations were declared unsuccessful. The LFP is now giving itself 48 hours to set out the next steps in the marketing of its rights,” the LFP revealed, in a short statement. It gave no information about how much the three groups had offered for the rights.

It’s safe to say that the offers were somewhat lower than the €814 million per season Mediapro agreed to pay in 2018, when it picked up the lion’s share of live football broadcast rights. The contest as a whole raised €1.15 billion, an increase of several hundreds of millions of euros on the previous rights sale, and also saw BeIN Sports pick up some premium rights and Iliad’s Free secure rights to show near-live clips of Ligue 1 football. In addition to the huge sums of money involved, the contest also surprised because it left incumbent Canal+ out in the cold, although it later brokered a redistribution deal with BeIN. At the time Canal+ made it clear it was not willing to overpay for the content.

The hefty price tag left Mediapro with a mountain to climb when it came to recouping its investment. According to City AM, the firm needed to sign up 4 million paying subscribers at €25 per month to make the numbers work, but its dedicated Téléfoot channel, which launched in the summer, only attracted 600,000.

The whole situation was exacerbated by the Covid-19 pandemic, which saw the French government pull the plug on the 2019-2020 season in March, several months early. Naturally that left broadcasters reluctant to pay for matches they were unable to show and conflict reigned for a while before an uneasy truce emerged. And it’s not much of a stretch to suggest that there was probably a knock-on effect when it came to consumers’ willingness to sign up for premium sports packages in the summer. While the pandemic has made all of us more reliant on broadband and digital services for work and entertainment, it is also squeezing consumer wallets; there’s a delicate balance at play.

It is perhaps unsurprising then that the likes of Amazon are reluctant to match the kind of price premium the LFP is looking for for French football. That said, there are rumblings in the French press that the LFP could now negotiate with potential rights acquirers directly with a view to doing a deal. Some believe Amazon could still be in the running.

So could Canal+, which has reportedly cancelled its deal with BeIN and according to Le Figaro is seeking a return of the BeIN rights to be re-auctioned alongside Mediapro’s erstwhile rights packages.

There are clearly some unique market dynamics to consider here, and Covid-19 has created an unusual situation for sports rights holders everywhere. But it is still worth asking whether there are lessons to be learned for football rights holders in other markets.

In a research note in December, Ampere Analysis analyst Minal Modha commented on the cancellation and/or deferral of major football leagues and internation sporting events like the Tokyo Olympics and UEFA’s Euro 2020 tournament.

“Not only did this halt have an impact on club and tournament finances, but Ampere’s Consumer research shows that it may have had a longer-term impact on fans and their propensity to pay to access sport on TV,” she said.

A survey carried out by the firm across 22 markets in the third quarter of last year showed that 34% of sports fans were willing to pay to access at least one sport, down a fair amount from 42% in the same quarter of 2019.

“This trend is evident in all the regions surveyed, but the sharpest declines have come in Europe and North America, where access to sport can be relatively expensive via numerous pay TV and streaming services,” Modha said. “The individual markets which had the largest decreases— Germany, Poland, Italy and the Netherlands—are all in Europe.”

As yet, this change in attitude has not yet translated into widespread cancellations of sports packages, she noted. But there could be a rebalancing ahead.

“As broadcasters begin to sign new rights deals or renew current contracts, many will seek to leverage the pandemic to reduce fees. If consumers do begin to cut the cord, this will only provide further ammunition and may see a widespread re-evaluation of sports rights,”  Modha said.

It’s pretty straightforward really. If consumers are unwilling or unable to pay top dollar for sports packages, rights holders could find themselves unable to commit huge sums to secure those rights. And there could be some tricky times ahead for those – broadcasters, telcos and Internet giants – who have already spent big.