The Business of Ligue 1
by Patrick Kinch
This feature includes three sections of analysis from Sportcal's 2020/21 Ligue 1 report. The report analyses Ligue 1's commercial outlook for 2020/21, its response to COVID-19 and how France's lead domestic soccer league compares to Europe's other major soccer properties. The full report is available to Sportcal subscribers.
4th November 2020, 10:19

COVID-19 

COVID-19 creating disputes between 2019/20 Ligue 1 broadcasters and LFP, contract concerns spilling over into 2020/21 

 

Of Europe’s five major soccer leagues, Ligue 1 was the only one to null its 2019/20 season in the face of the COVID-19 pandemic. France’s Prime Minister Edouard Phillipe confirmed on 28 April that no sporting events would take place until September, ending the 2019/20 season. The nulled season left PSG as champions as the final standings were determined on a performance index of points per game and head to head records, with Marseille qualifying for the Champions League and Rennes having to secure a place through the qualification round. 


As with other leagues around Europe, the pandemic has thrown uncertainty over agreements between rights holders and broadcasters, as well as partnerships between Ligue 1’s clubs and their sponsors. The LFP has been engaged in a series of public disputes with its chief broadcast partners BeIN Sports and Canal+, with Canal Plus Group chairman Maxime Saade stating that the payment of future instalments to the LFP would not be possible. In April of 2020, Canal+ and BeIN were scheduled to pay the LFP instalments of €110 million and €42 million respectively. Having reached an agreement regarding the payment of Ligue 1 fixtures that were fulfilled up until the mid March suspension of the league, Canal+ announced that it would be terminating its contract with Ligue 1 following confirmation that the remaining games for the 2019/20 season would not be played. Following several weeks of negotiations, Canal+ and BeIN agreed to pay a further lump sum €47 million to the LFP, with the LFP stating that the decision allowed the “rights owed by broadcasters to the LFP to be definitively settled for the 2019/20 season.” As a result of the shortfall in broadcast revenue, the LFP announced in May that it would be securing a state-guaranteed loan worth $245 million to allow it to pay Ligue 1 and Ligue 2 clubs the fees that were still to be collected for the 2019/20 season, covering rights payments that were to be delivered in April and June. 

The issues created by COVID-19 which have affected agreements between Ligue 1 and its broadcasters have spilled over into the new rights cycle beginning in the 2020/21 season. MediaPro, the Spanish media rights and production agency, who secured Ligue 1 rights until 2024 in a deal reportedly worth $910 million annually, announced in October that it was seeking to renegotiate terms having missed its payment deadline. Having been scheduled to pay $203 million in October, the LFP refused an extension to the payment which is to be used to make payments to Ligue 1 and Ligue 2 clubs, who will have been spending money to confirm new signings for the coming season and securing contracts with existing players. Should MediaPro default on its payments having agreed pay $910 million annually (an increase of over 20 per cent on the Canal+ deal) for three separate rights packages, the LFP and its Ligue 1 clubs will be facing an investment black hole that would leave clubs facing uncertainty at a time when they are looking to secure their financial outlook. 

 

Ligue 1 Teams 

PSG enjoying highest sponsor value by far owing to lucrative kit supplier and shirt sponsorship deals 

 


The Ligue 1 teams in France’s three most populous cities, Paris, Marseille and Lyon have the highest sponsorship value for 2020/21. PSG, Lyon and Marseille’s history in European soccer means they can command more for their sponsorship as they regularly play in front of an international audience. The same can be said for AS Monaco, located in France’s southern principality, who also feature regularly in the Champions League and Europa League. 

PSG stand head and shoulders ahead of the rest of Ligue 1 thanks to the emergence of global superstars in their team as well as their regular domestic success in winning seven of the past eight Ligue 1 titles. The club has been owned by the state run Qatar Sport Investments since June 2011 and has spent over $1 billion on player transfers since then, becoming one of Europe’s, and by extension the world’s, strongest teams. As such, a range of global brands have partnered with PSG with partnerships typically valued between $1-7 million. This combined with its shirt sponsor deal with Accor Hotels and supplier deal with Nike (a combined value of $171.90 million a year) gives PSG an estimated valuation of $266.60 million annually.  

 

Lack of international shirt sponsors highlights challenge facing Ligue 1

A breakdown of the current front of shirt deals in Ligue 1 show that the food and construction industries are the most represented in the league. Overall there are 22 deals due to Angers and Strasbourg offering separate sponsorship for their home and away jerseys. Other industries with multiple sponsorships in Ligue 1 include the betting and automobile industries, where Winamax and PasinoBet have front of shirt agreements with Strasbourg and Montpellier. Truck manufacturer Scania and dealership Car Avenue have confirmed partnerships with Angers and Metz. 


The overwhelming majority of brands are located in France, highlighting the domestic appeal of Ligue 1 to French brands. Ahead of the UK, USA and Sweden, UAE brands are the second most represented owing to Lyon’s deal with Emirates, and Monaco’s deal with FEDCOM. Both Monaco and Lyon have been regular competitors in European competitions which explains their more international appeal to brands beyond France. PSG’s new shirt sponsor Accor have previously had ties with the club, Accor’s chairman Sebastian Bazin was PSG President from 2009 to 2011, before the takeover by PSG’s current Qatari owners. 

 
The league’s lack of international shirt sponsors runs in contrast to La Liga and the Premier League, whose international appeal are able to attract 14 and 16 international brands respectively. 

 

Media Rights 

Deals with MediaPro and BeIN represent a welcome domestic increase in rights value 

 

2018 saw Ligue 1 confirm a lucrative rights package for its domestic rights with Spanish sports right agency MediaPro and pay-tv broadcaster BeIN Sports. The two organisations teamed up to secure the first four main packages of live rights, covering ten games per match week, along with three additional packages. MediaPro secured the first, second and fourth packages, with BeIN securing the third. The combined value of these deals is reported to be $1.28 billion annually with MediaPro paying $910 million and BeIN $373 million. The deals cover the period from 2020/21 to 2023/24. In 2014, BeIN Sports also acquired international distribution rights to Ligue 1 in a six year deal running from the 2018/19 to 2023/24 season worth a reported $109 million annually. Free TV, the French telecoms group also acquired digital rights to highlights coverage of all ten matches per game week, for $58 million annually. This brings Ligue 1’s domestic rights sales to over $1.3 billion for its current four year rights cycle. MediaPro will broadcast Ligue 1 fixtures on its newly launched Téléfoot network, partnering with French media holding group TF1 Group, as its content partner. 

The current value of Ligue 1’s domestic rights represents an increase from its previous cycle from 2016/17 to 2019/20. Canal+, the French pay-tv broadcaster had acquired the top two packages of Ligue 1 rights in 2014 for a reported $742 million annually, with BeIN securing four separate packages ranging from fourth choice to tenth choice matches for $256 million annually. The domestic rights value for Ligue 1 has therefore increased by $282 million a year, when comparing BeIN and Canal+’s agreements for 2016, to BeIN and MediaPro’s for 2020. This is a marked increase showing that Ligue 1 is becoming a more attractive product for broadcasters. This increase can be explained by a rise in Ligue 1’s viewing figures, with then Vice-President Didier Quillot stating in October 2018, that viewing figures for Ligue 1 were up 25 per cent compared to the previous season. As such, demand from brands seeking advertising on Ligue 1 networks is greater, meaning that the LFP is able to drive a harder bargain with broadcasters for its rights. 

As a result of this domestic growth, the LFP is seeking to increase the value of its international rights with BeIN. Speaking in December 2018 several months after the confirmation of its contracts with MediaPro and BeIN, Quillot suggested that the LFP was looking to develop the exposure and awareness of Ligue 1’s brand internationally, adding that revenue of  €80 million ($109 million) for its international rights distribution, which was agreed in 2014, was significantly undervalued. Ligue 1 clubs have also expressed dissatisfaction at the value of Ligue 1’s international rights, with Monaco’s Vice-President Vadim Vasilyev citing international rights as big future revenue source for Ligue 1. One argument for the increase of the value of Ligue 1’s international rights is the arrival and emergence of global superstars such as Neymar, who arrived from Barcelona for a record transfer value of €222 million in 2017, and French striker Kylian Mbappe, now a World Cup winner.