Members of the French government have proposed that a representative of the country’s governing soccer federation (FFF), is allocated a seat on the board of the new commercial rights venture being planned by the country’s Professional Football League (LFP), in order to have a right of veto if necessary.
The French Senate, specifically its culture and education committee, met yesterday to discuss potential changes to a law aimed at democratizing sports media rights in France, as well as the LFP’s planned new commercial subsidiary.
The commercial entity would sell and distribute rights to men's soccer's top-tier Ligue 1. A search for private equity partners began in October, with around 10 preliminary offers having been submitted as of mid-December.
The senators also proposed that the FFF director on the board of the new company should have a right of veto incorporated with their role and that any stake offered should be no more than 10%.
The creation of the commercial subsidiary would be one of the main consequences of the sports bill currently being driven through the country’s National Assembly by the La République en Marche (LREM) governing party.
The National Assembly already voted, in March last year, to allow sports bodies to create such subsidiaries, and on December 15 it was reported that several of the firms bidding for a stake in the LFP’s new vehicle would be willing to offer up to €1.5 billion ($1.69 billion) for a stake of between 10% and 15%.
This would be in line with the valuation target set by the league when it first began assessing the capacity for private investment into a commercial vehicle.
However, the senate’s culture and education committee yesterday raised several points of concern with the plan.
Laurent Lefron, the committee’s chair, said: “We have, a little bit, the impression that on these financial questions the leaders of the LFP act like a rabbit caught in the headlights … and blind themselves when we talk about certain sums.”
Michel Slavin, who authored the report proposing changes to the overall sports bill, added: “We need answers – what is the value of the league? How much is 10% of the shares? How much are the clubs losing?”
The Senate is set to fully examine all aspects of the bill, including the legitimacy of the LFP’s new creation, on January 18 and 19, with Slavin reportedly saying yesterday: “We have 15 days left to find a compromise.”
In order for the bill to be fully adopted, it will need to be approved by both the National Assembly and the Senate via a joint committee.
Last month, it was reported that firms such as CVC Capital Partners, Bain Capital, Advent, Apollo, Bridgepoint, and Silver Lake had all expressed interest in taking a minority stake in the LFP’s subsidiary and that the body was sifting through the non-binding proposals in order to work the list down to a shortlist of three or four.
Binding offers from firms on this shortened list are expected by early March at the latest, with recent reports saying that given the quality of the preliminary bids, the LFP is confident about the overall sales process.
The LFP’s member clubs initially voted in December 2020 to explore the possibility of creating such an entity, by reforming the body’s statutes.
This statute amendment outlines, however, that the LFP “may not hold less than 80% of the capital and voting rights of the company”, meaning that the governing body would maintain full operational control of the division.
A commercial venture like this could see a redistribution of the way media rights revenue is split between the 40 clubs in Ligue 1 and Ligue 2.
Currently, the two clubs generally accepted as the biggest in the country – Paris Saint-Germain and Olympique de Marseille – receive less than 10% each of total revenue, a situation those heavyweights will no doubt push to change if at all possible.
According to Bloomberg, outside investment would result in the 20 Ligue 1 clubs being split up into three levels in terms of revenue allocation, with PSG alone occupying the top tier as recognition of the team’s place at the top table of European and world soccer.
The remaining 19 clubs would then be split into two pools, with clubs that routinely finish in the top four and appear in pan-European competitions being put in the higher of the two.
Vincent Lebrune, the LFP’s president, said last month: “If we have a fair valuation [from an investment fund] that will allow us to save our system and provide funds to the amateur world and which will allow us to get off to a good start, we will seriously ask ourselves the question about moving forward.
“The objective is not to sell off our assets … If we don’t have anything satisfactory, we won’t do it.
“We have a very serious and very supervised process.”
Currently, Ligue 1 secures the least revenue out of the European ‘Big Five’, behind England’s Premier League, Spain’s LaLiga, Germany’s Bundesliga and Italy’s Serie A.
Labrune also said at that point that the 40 teams collectively face a funding hole of up to €800 million ($905.3 million) after the damaging financial effects of the coronavirus pandemic over the last two years, with the collapsed media rights deal between the LFP and Mediapro also contributing to the shortfall.
As such, he said that – with regards to inviting outside investment – “we have no choice … Our long-term future depends on the next 18 months.”