LFP 'takes Mediapro case to Paris court' in bid to secure payment
The LFP, the French professional soccer league, has appealed to the commercial court of Paris to force Joye Media, the parent company of the league’s domestic rights partner Mediapro, to pay its debt based on a guarantee included in the contract, it has been reported.
As part of its four-year deal with the LFP, worth an annual €814 million ($959 million), Joye Media signed a “solidarity agreement” in November 2018 which obliges it to cover unpaid payments by its subsidiary, but also all costs and interest, according to L’Equipe.
Mediapro is in dispute with the league, having not made its second instalment payment of €172 million due on 5 October, citing the impact of the coronavirus pandemic.
This is the latest twist in a bitter ongoing saga and quickly follows on from the LFP serving notice on Mediapro to settle its debt last week with the cancellation of the lucrative contract now a very real possibility.
In the contract, Joye Media bosses Jaume Roures and Tatxo Benet reportedly have their signatures as the guarantors, whilst ex-LFP chief executive Didier Quillot is down as the beneficiary.
Details of the six-page contract have now been made public and state Joye Media has an obligation to cover Mediapro France in the event that its subsidiary goes bankrupt and must make all the payments due by Mediapro if the latter cannot do so.
According to L’Equipe, the clause states Joye Media SL must cover “obligations of payment, reimbursements, interest, interest on arrears, fees, commissions, expenses of any amount and of any what kind.”
The LFP had rejected Mediapro's request for an extension, and initially said it needs the money by 17 October to pay clubs in Ligue 1 and 2.
Having not received the fee over the weekend, the LFP has added more pressure on Mediapro by referring its claim to Paris’ commercial court.
The Spanish media rights and production agency wants to renegotiate the terms of its broadcast contract with the LFP just two months into a lucrative four-year deal because of the financial impact of Covid-19.
It is obliged to make the €814 million annual payment for the main package of rights to Ligue 1 over the next four seasons, as well as €34m for the Ligue 2 rights over the same period.
The LFP has been forced to seek an additional €120 million loan from an international bank and will use €50 million of its own money to distribute the TV funds owed to its clubs on 5 October.
This decision was taken by LFP bosses and was due to be validated by the general assembly today.
When ratified, it would further increase the league’s debt after it took out a state loan in May, reported to be worth over €220 million, in order to pay clubs in the top two divisions the remaining money they were owed from last season's media rights contracts, which were terminated by pay-television broadcaster Canal Plus after the campaign was cancelled early due to the pandemic.
Mediapro set up the Téléfoot channel to show eight matches from each of the top two divisions each matchday. It costs €25.90 per month, and had targeted 3.5 million subscribers, but only has around 278,000 at present, according to reports in France.