French football league threatens to rip up Mediapro deal in TV rights dispute
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Paris (AFP) –
The French Football League has threatened to rip up its domestic TV rights agreement with Mediapro and turn to other broadcasters following the Chinese-owned group's refusal to make payments due earlier this month.
In an email sent to clubs in France's top two divisions and seen on Thursday by AFP, the league (LFP) said it had "ordered Mediapro to meet payments due on October 1 and 5".
The email, sent by the LFP's executive director general, Arnaud Rouger, added that if an agreement is not reached with Mediapro, "we will need to consider handing the contract over to other operators".
Mediapro agreed to pay more than 800 million euros ($936m) per year for the bulk of the domestic rights to the top two divisions of French football for four seasons starting this year.
It was a record deal, but a payment due at the start of this month has not been made, plunging clubs into worse financial trouble following the crisis caused by the pandemic.
Matchday revenue has been almost wiped out by French anti-coronavirus measures.
The missed payment is worth 172 million euros according to sports daily L'Equipe.
To try to soften the blow the LFP has taken out a loan to distribute to clubs and cover the missed payment.
It had already taken out a state-guaranteed loan of 224.5 million euros to compensate for lost television income after the decision to bring a premature end to last season.
Mediapro, which is a Spanish company with Chinese owners, set up a new channel in August to broadcast French league games as well as Champions League and Europa League matches.
However, the group's chief executive, Jaume Roures, is asking for the contract to be renegotiated, blaming the economic downturn caused by the pandemic.
"We want to discuss again the contract for this season. It has been badly affected by Covid, everyone knows it because everyone is suffering," he told L'Equipe last week.
Clubs were due to receive TV payments from the league this Friday. Broadcast revenue is their chief source of income, with 36 percent of all revenue for Ligue 1 clubs in 2018/19 coming from television according to the DNCG, French football's financial watchdog.
There could be serious knock-on effects, including players not being paid, if the TV money is not forthcoming.
"There are obviously a certain number of clubs who could find themselves in big difficulty," said the Lyon president, Jean-Michel Aulas.
Doubts about the credibility of Mediapro are growing. The company had debts of some 727 million euros at the end of last year. Its owners, Joye Media, recently had its credit rating downgraded by Moody's to the high-risk B3 category.
The situation has been met with incredulity by figures within leading French clubs.
"I dream of buying a millionaire's mansion in Beverly Hills, but I'm not going to make an offer of 20 million euros for it," said Marseille coach Andre Villas-Boas.
"If you don't have the money, don't make an offer for the rights to French football. It is a scandal."
Mediapro has gone to a commercial tribunal near Paris to begin mediation procedures to allow it to renegotiate the broadcast deal.
If the league does not get its money, it could attempt to find a new deal from Mediapro's main rivals, Canal+ and beIN Sports, the latter the holders of the international rights to Ligue 1.
However, any new deal would likely be worth considerably less than that agreed with Mediapro.
© 2020 AFP