the LFP channel project “does not seem viable in the long term”, believes a sports economist

The Professional Football League plans to create its own channel to broadcast the French championship. For Jean-Pascal Gayant, this project risks weakening the economic situation of French clubs.

Will the LFP create its own channel? While it is in the process of negotiating the amount of television rights with the various players for the period 2024-2029, the Professional Football League is seriously considering launching its own channel in the event of failure of negotiations with beIN and Canal+ in particular.

This channel would cost 25 euros per month with all Ligue 1 matches and broadcast via various channels: internet service providers (ISPs) and streaming platforms. Jean-Pascal Gayant, sports economist and director of the IUT of Saint Malo, doubts the sustainability of such a project for French football and believes that the expected price for the broadcast of Ligue 1 is too high for the presidents club.

franceinfo: Is this idea of ​​the LFP to have its own channel economically viable?

Jean-Pascal Gayant: It is always possible to have a channel for which revenues would exceed production costs. The problem is that the challenge for the LFP will be to generate considerable revenue so that the clubs can balance their budget and cover their payroll. However, in my opinion, the revenue that can be obtained from the implementation of such a chain would certainly not make it possible to achieve the League’s objectives. So for me it is a channel which is not viable as a long-term instrument and for the functioning of the League’s economic model.

How much does the LFP need in terms of revenue?

Obviously as much as possible! The LFP was counting on more than a billion euros in revenue, including international rights. Let’s put these at 150 million euros, which is where we are going, the LFP would need 850 million. When we take the calculations that Vincent Labrune [président de la LFP] had made when he contracted with the commercial company CVC for the 13% of the shares of the League, it was necessary to have around 850 million euros in domestic rights, in particular so that in 2024, we could already assume the reimbursements linked to the first two years at CVC. Then, a really clear increase in club revenue was envisaged and also a kind of progression in the hierarchy, particularly European, for French clubs.

Unattainable revenue figures for the League channel?

I can’t see this LFP channel achieving this level of revenue, because we still have to keep in mind that if the crowds in the stadiums are increasing, the audiences on the screens are decreasing for the League. 1. So we are not at all in a buoyant market. At best, it stagnates or otherwise there is a decrease in audiences.

Previous experiences of channels or operators of this nature do not at all suggest that this objective of 750 to 850 million euros in revenue can be achieved. Amazon, with 1.8 million subscribers at 13 euros, has reached its glass ceiling. It is difficult to imagine that we could reach 2.5 million subscribers, or even a little more, with a subscription of 25 euros. So it seems very illusory to me.

Is this price of 25 euros too high for the consumer?

There are perhaps 800,000 to a million households ready to pay that price. These are people who are absolutely passionate about football and who will take subscriptions anyway. But the problem is getting to 2.5 million. There is a clientele that will be much more volatile. It will be very difficult to even reach a figure above 1.5 million subscribers that we can reach at cruising speed, with something to stabilize if the production of the matches is good, attractive, well scripted, etc.

“It seems complicated in France, given the appetite of French viewers for football and a whole bunch of contextual elements. Particularly young people, who perhaps have more difficulty watching the matches in full and who are at the search for different show formats.”

Jean-Pascal Gayant, sports economist

at franceinfo

I am quite pessimistic and we can estimate that there is in this channel proposal something that looks like a desperate attempt to bring Canal+ and beIN back to a proposal that would be acceptable to the League. In my opinion, Maxime Saada [président du directoire du groupe Canal+] waits and will not budge one iota on what he is ready to put in for Ligue 1.

Can we think that this is a bluff by the LFP in the negotiations with Canal+?

We are in a situation where club presidents also need to be reassured. They are told to construct budgets and to be able to present to the DNCG, in a few days, the funding planned for this budget. Club presidents say to themselves, but especially those who are very dependent on television rights, that they have no ability to plan ahead and do not know at all what revenue is going to be there. We must therefore give a perspective, whether it is realistic or not.

Secondly, in the negotiations, which continue, we have to provide a little bit of an element that can make Canal+ move by saying: “If you don’t come, we will make the channel and then you will lose.” Given the circumstances, the dispute and the way things happened, Canal+ believes it can deprive itself of Ligue 1 and has decided to impose its price. The League will have to choose: either it swallows its pride and returns to Canal+ to accept their conditions, or the League goes all the way by saying: “We’ll manage on our own like adults.” The danger is that this turns into a kind of industrial catastrophe because I don’t believe at all in this possibility of a chain. In any case, the standoff is there and Canal+ is in a position of strength.

Why can’t the LFP sell at the price it wants?

Club presidents imagine that Ligue 1 is worth a billion, it really is like an incantation. Maxime Saada during his hearing at the parliamentary commission of inquiry into the Mediapro fiasco demonstrated, with supporting figures, that Ligue 1 was worth around 650 million. There is not a market in France with consumers ready to pay the amounts that would lead to a billion in revenue. The fundamentals of the French market are different from those of England, Spain, Italy or Germany. There is a set of parameters that are linked to the clubs, the quality of the show, the match schedules and the alternative activities available.

What are the risks for the Professional Football League?

There is a risk of ending up with clubs which will have gigantic deficits and which will be on the verge of bankruptcy. They have commitments with players already under contract, with a given payroll, and they will not be able to pay salaries during next season, or even by the end of the season. It’s a real risk because if there is not enough money from television rights, we have clubs which will find themselves in very serious difficulty.