“If it was a normal business, French football would be bankrupt”

The new champion of France, Losc, is in financial difficulties, to the point of having hastily changed shareholders this winter. Doesn’t this paradox reveal the malaise of the French foot?

Jean-Pascal Gayant : His performances will give him a breath of fresh air thanks to Champions League income next year, but he is not off the hook. The story is quite dramatic, when you think about it. The Losc was once saved by the city, so the taxpayers, to fall into the hands of Gérard Lopez, a Luxembourg businessman, who financed himself for more than 200 million from the “vulture” fund Elliot.

He had to let go, and now Callisto, a fund that specializes in buying distressed businesses, has taken over. The latter put money back in the pot to avoid a bankruptcy filing. But it will still be necessary to find not far from 100 million to rebalance its accounts. This will only be possible by selling players. Even if it is difficult for the supporters to achieve, Losc has become the plaything of financiers. The Girondins de Bordeaux, new property of Gérard Lopez, are in an even more delicate situation.


LOSC was on the verge of cessation of payment according to its new boss

Ligue 1 was already in chronic deficit. And his losses soared again with the Covid and the Mediapro affair, named after this Spanish intermediary who had bought the television rights to the championship and who proved unable to honor his contract.

Until the 2018-2019 season, the usual deficits were between 60 and 120 million euros per year. The clubs operate in a particular way since they have products related to their activity (ticketing, TV rights, sponsorship, etc.) and income from transfers. Operating revenues are generally very far from covering operating costs. It is not uncommon for the deficit – excluding transfers – to represent 40, 60 or even 80% of a club’s budget.

Even in normal times, clubs rely heavily on player sales, which are always uncertain. With the pandemic and the Mediapro affair, the situation, which was delicate, is turning into a disaster. The financial policeman of professional football, the National Directorate of Management Control (DNCG), has not yet published the 2019-2020 accounts, a season which was interrupted in March, but the shortfall is beyond 400 million . And the season that has just ended looks much worse, with the collapse of TV rights. According to some estimates, the losses would be between 1 and 1.3 billion euros.

So, is Ligue 1 just a house of cards?

In any case, she saw herself much more beautiful than she was. TV rights, with Mediapro, should theoretically amount to 1,153 billion from the 2020-2021 season, an increase of 60% in one year. All the clubs have therefore inflated their estimated budget. But the extra revenue never arrived. We have gone from an already particular system, where more or less wealthy shareholders filled in the holes, to a situation that is downright no longer tenable. French clubs are companies which, in a normal activity, would be numerous to go out of business. They will have to downsize their workforce and try to reduce their payroll. And maybe increase the number of L1 clubs from 20 to 18.


Ligue 1: the LFP wins a round against beIN Sports

Back to the Mediapro affair. How could the League have shown such levity?

There was a sort of collective blindness. When the call for tenders was launched, in the years 2017-2018, the leaders of French football had an obsession: to obtain 1 billion euros in rights, like the Germans, the Italians and the Spaniards, the English being out competition to 2.3 billion. It was also hoped that an increase in fees would seek to put under the carpet the quarrels inside the League between the “big guys”, who wanted a bigger piece of the pie, and the others.

Last thing, it was also a question of settling accounts with Canal+, the historical partner, with whom relations had become strained. In the end, the League validated without too many precautions an offer that seemed unexpected. I said it at the time, the value of the French foot was rather around 600 to 700 million. Moreover, these rights had already been artificially inflated by BeIn, which had been losing money since its arrival in 2011-2012. And Canal+ either could not make football profitable. So, explain to me how a new broadcaster, who puts 60% more on the table, will manage to get by!


How Ligue 1 lost half of its viewers

What can happen for the next season?

For now, the showdown continues between the League and Canal. This has been going on since 2018. After being dismissed, the channel bought the Saturday evening match and the Sunday match at 6 p.m. from BeIn under license at a fairly exorbitant price of 330 million euros. Since then, Canal has been a bit of a prisoner of this deal and is trying to get out of it. This winter, Maxime Saada, his boss, tried to invalidate the new call for tenders after the departure of Mediapro, because the lots he had acquired dearly were not included. Canal was dismissed but has since turned to the competition authority. The broadcaster suggests, and it is indisputable, that market conditions have changed since 2018.


Foot / TV rights: Canal + appeals the decision ordering it to broadcast the L1

In the meantime, Canal+ is seeking a compromise with the League to recover the Sunday evening match, the one it cares about the most. The channel should just have the best two matches of each day. And I think she can do it. There is talk of BeIn picking up the others. We are also talking about the arrival of Dazn, the streaming platform dedicated to sport.

To save the furniture, the League could also create a chain, complementary to the Canal offer. The subscription would be around 10 euros per month. It is a signal given to clubs who are worried about their finances. If all this succeeds, we could imagine rights of the order of 600 million, with perhaps 100 million rights for international distribution in addition. That’s the price of Ligue 1, even if club presidents have a hard time admitting it.

Have other European leagues fared better in the face of the pandemic?

A report by UEFA, the Union of European Associations, examined the impact of the crisis for professional clubs from the 55 member federations. It estimates the losses linked to the pandemic over the last two seasons at 8.7 billion euros. But I am certain that the big clubs will come out of the crisis stronger. The sponsors, forced to also make savings, will concentrate their budget on the most exposed teams.

Anyway, it’s a basic trend. According to Deloitte’s annual study, the wealth of the 15 biggest European clubs is only increasing. Their resources doubled between 2009 and 2019, rising from 5 to 10 billion euros. Last season will be welded by a drop of around 10 to 15%, linked to the absence of an audience. But TV rights and sponsorship are maintained, except for PSG, because of Mediapro.


PSG, Monaco, OM… the abysmal losses of our clubs revealed

These are the 15 richest clubs which are precisely candidates for the creation of a European Super League.

The emergence of this competition seems inevitable to me, even if it is currently facing resistance from sports authorities and politicians. I recall that it was UEFA which favored this movement of enrichment of the strongest by planning the Champions League in 1993. It accepted that the English, the Italians or the Germans have up to four clubs there. It’s easy to cry foul these days. The richest are trying to emancipate themselves and they will undoubtedly succeed one day. One question remains open: will this competition be closed or will there be relegations and promotions? Do the big clubs stay in their national championships?

At first, it is possible. The amounts at stake are enough to make your mouth water: the 15 estimated that the Super League could bring in more than 5 billion rights, while the current Champions League, with nearly 80 teams involved, would bring half as much. It will also be difficult to ban players from the national teams who participate in this Super League. This is a threat that will not hold up in court. In a few years, it will be done, I am sure.


Super League: UEFA strikes (a little) the slingers in the portfolio

But the opinion there seems detailed!

There is a part of the public, especially among young people, who aspire to a Super League. This project has also seen the light of day, because Fifa, in rivalry with UEFA, is not hostile to it, even if it is careful not to say so openly. Moreover, Fifa supports the idea of ​​a North American Super League which would include Mexican and American clubs. A competition that could eventually compete with the football of the Old Continent, unless created on a Super League.

>> Health, work, housing… all the innovations that will change our lives. This is the cover of the last issue of Capital. Access this edition in seconds from 3.35 euros.

Leave a Comment