So, what does this commercial company of the LFP mean?

Vincent Labrune is probably no longer welcome in Ljubljana. Auditioned at the beginning of December by the Senate, the president of the league had to resolve to an unflattering comparison for the homeland of Jan Oblak, in order to highlight the financial emergency with which France football is facing: “There has been a total loss of 1.8 billion euros for Ligue 1 and Ligue 2 clubs since 2019 … The reform of UEFA in 2024 will give four places in the Champions League to the first five championships on the index UEFA … If we leave this classification, the French championship will definitely be in European D2, we will become the Slovenian championship. ” If the ex-president of OM came to play the Nostradamus of the round ball in front of parliamentarians, it is because he wants to convince them of the urgency of voting an amendment, which can change the fate of blue football -blanc-rouge: the latter aims to create a commercial company affiliated with the LFP, which would manage and market the TV rights of French football. Above all, it would allow 10 to 20% of the shares of this future company to fall between the legs of an investment fund. Not for balls: Labrune would aim to make new entrants pay 1.5 billion euros. An amount that should allow French football – financially asphyxiated by the Mediapro disaster and the coronavirus episode – not to sink economically. Hallelujah? Not really. Because with investment funds, mistrust is always in order.

When it’s blurry, is there a wolf?

The Senate was not mistaken, in particular by including in the future text of the law a certain number of safeguards. In particular, parliamentarians limited the percentage of shares that investment funds could acquire in the future commercial company to 10%. “We have also included in the text a right of opposition from the FFF, specifies Senator Michel Savin, rapporteur of the law aiming to democratize sport in France, from which the amendment relating to the creation of the commercial company comes. Clearly, a person from the federation will be present on the board of directors of the LFP. It will have the right to oppose anything relating to commitments between the Fed and the League. Our objective is in particular that the funding that the League pays to amateur sport and the FFF remain intact. ”

“The League has not submitted any serious study summarizing the advantages and disadvantages, the conditions of implementation or the precautions to be taken relating to this project. ” Laurent Lafon, Chairman of the Senate Culture and Education Committee

If parliamentarians understand the need made explicit by the League to find new investors, the vagueness surrounding the LFP project legitimately questions. “All this happens after the Mediapro episode and generates a certain vigilance on our part, confirms Senator Laurent Lafon, who chairs the Senate Culture and Education Committee which interviewed Vincent Labrune, Wednesday, December 8. I would add that there was no impact study on the creation of this commercial company, because it is not a government proposal. For its part, La Ligue has not submitted any serious study summarizing the advantages and disadvantages, the conditions of implementation or the precautions to be taken relating to this project. ”

In fact, the League can probably not yet communicate on the details of its future project, while it is currently in negotiations with four funds, namely CVC Capital Partners, Oaktree, Silver Lake and Hellman & Friedman. The outlines of the initiative are even more opaque, which moderately delights the elected officials who are currently working on the file. “There is a vagueness on the objectives of investors. What rewards are they asking for? asks Lafon. We also do not know how something in deficit will turn into something profitable, what measures will be imposed by the shareholder to generate profits, etc. ” The amount of 1.5 billion euros that the League hopes from these new investors would remain purely theoretical. “This sum is what is expected by the League, but we have not seen it mentioned in any text, Savin advances. It corresponds to a need, but is that necessarily what she will touch? And then, what are these 1.5 billion supposed to represent? 10, 15, 20% of the capital? We do not know. ”

“The League wants to bring in cash and quickly. All right, but the problem is, it has an impact in the longer term. ” Pierre Maes, former director of programs at Canal + Belgium

Cash and short term

To try to demystify a little the whole, the best is still to turn to specialists in audiovisual TV rights. Like the consultant Pierre Maes, former director of programs at Canal + Belgium and author of the book The Football TV Rights Business. For the latter, the creation of the future commercial company of the League responds first of all to short-term issues: “The policy of football clubs has always been the short term and even the very short term. This is the case here: we want to bring in cash and quickly. All right, but the problem is, it does have a long-term impact. We can see it clearly with what has been done in Spain recently. ” On December 10, La Liga had effectively recorded the creation of its own commercial company. This agreement, concluded with the investment fund CVC Capital Partners, will see the new investor pay 2 billion euros to Spanish professional clubs. In return, the Iberian groups undertake to transfer 11% of the annual income from their TV rights to the investment fund, for the next fifty years. “Are we moving towards a similar model in France? We don’t know anything yet ” , unrolls Maes. It should also be noted that Barça, Real and Athletic de Bilbao have seceded and filed a lawsuit to defuse the La Liga project. “We can think that Barça and Real believe that we give too much to CVC in the long term, says Maes. I also think that what is offered to them on the part distributed is too low for their liking. If they are dissatisfied, I guess that will also accentuate their desire to create a Superleague. ”

The root of the problem

The field of action and jurisdiction that the LFP chooses to grant to the funds may also raise questions. “I think that having control over the negotiations on TV rights is one of the essential conditions set by the funds with which the League is negotiating, explains Pierre Maes. In Italy, the clubs had entered into negotiations with CVC Capital Partners to create a commercial company. The thing is, they initially didn’t realize that they were going to lose control over the sale of the TV rights. This is one of the reasons why the deal ended up failing. ”

“What is at stake here is the continued financialization of French football. We do not solve the problem, we accentuate it. ” Michel Larive, LFI deputy

The limits that the Senate wants to add to the participation of a fund in the commercial company of the League will they only be sufficient? The insubordinate France deputy Michel Larive allows himself to doubt: “The Senate has capped from 20 to 10% the shares that an investment fund can acquire in this company. This is good, but is it enough? What is at stake here is the continued financialization of French football. We do not solve the problem, we accentuate it. ” A financialization whose precise objectives raise questions, while the failure of Mediapro has shown that marketing the TV rights of French football offered no guarantee of success. “Yes, we can legitimately wonder what the investment funds are doing in this galley, confirm Maes. Here, the funds seem to think that the League has not optimized the sale of its audiovisual rights. They say to themselves that the company in which they want to take a stake will generate more revenue, because they will sell the TV rights better. It remains to be seen, but hey, why not. Then, let’s not forget that a fund generally buys a part of a company – or a company – at an instant T, to then sell it with a capital gain. ” Difficult, however, to know in which scenario the League will embark precisely in the medium term. We can only hope that the necessary precautions will at least be taken to avoid a fiasco similar to that of the Mediapro affair a year earlier. By Adrien Candau
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