Ligue 1 entered into a deal with an investor in financial distress in 2022. Those responsible celebrated “the rescue of French football,” but now the financial crisis may be coming back with force.
In April 2022, the problems of French football came to an end – at least that was the promise of those responsible Ligue de Football Professional (LFP), a league association in France comparable to the German Football League (DFL). At that time, the investor CVC from Luxembourg took over 13 percent of the shares in a newly founded subsidiary, which has since then marketed the league, primarily for TV rights.
CVC provided the league and its clubs with 1.5 billion euros, and since then the investor has been entitled to 13 percent of the revenue from the marketing of the league in return. French professional football argued that the business was under financial constraints; almost all clubs had accumulated losses. Three problems were the focus:
- The coronavirus pandemic had reduced the clubs’ income.
- The league’s TV contract with the Mediapro service collapsed spectacularly after the outbreak of the pandemic in 2020, and revenue from media rights fell by almost a quarter.
- Sooner or later, the league had to pay back Corona aid amounting to 170 million euros to the state.
“French football is saved”said LFP President Vincent Labrune at that time. Around a year and a half later, however, it becomes clear that there are some catches.
Vincent Labrude, president of the French league association LFP
Clubs have to pay CVC, but higher income is not in sight
The LFP’s current media contracts end in the summer of 2024; the rights are currently being awarded from the 2024/25 season up to and including 2028/29. The LFP senses that the market resembles a distribution battle. UEFA’s rights Champions Leaguethe new FIFA Club World Cup with 32 teams, but also the Bundesliga or the all-powerful one Premier League are open from 2024 or 2025, everyone is vying for the same money from the broadcasters and Streamingservices.
The LFP had hoped to increase its total income to around one billion euros. But the bids for the current rights allocation were so far away from the desired amount that the LFP canceled the auction and now has to negotiate with the broadcasters individually, which means a rather worse result is in prospect. With its experience in marketing in football, but also in rugby and Formula 1, CVC was actually considered a beacon of hope for increasing revenue.
| season | inland | Abroad |
|---|---|---|
2019/20 | 738 million | 80 million |
2020/21 | 572 million | 80 million |
2021/22 | 580 million | 80 million |
2022/23 | 580 million | 80 million |
2023/24 | 580 million | 80 million |
There is also another problem: a report from the sports daily newspaper L’Equipe According to the club’s situation, CVC did not immediately claim its 13 percent of revenue in the first two seasons of 2022/23 and 2023/24. This money must now be paid in installments in addition to the 13 percent for the 2024/25 season and all subsequent seasons. If the LFP does not manage to significantly increase revenue from 2024/25, the clubs may receive less money in the future than before without an investor. And that’s what it looks like at the moment, which is becoming an increasingly loud topic.
Two microphones during the broadcast of a Ligue 1 match
Marseille’s ex-president: The clubs have to “pay for life”
The former president of Olympique Marseille, Christophe Bouchet, has written a book about the deal between LFP and CVC. He criticizes the league president Labrune, who is said to have increased his salary to 1.2 million euros per year with the investor involvement and received a bonus of three million euros from CVC. “The clubs spent CVC’s money in advance”said Bouchet on the broadcaster RMC, pointing to the permanent sale of the shares by the LFP: “Now they have to pay 13 percent of their income to CVC for life. For life!” The consequences are catastrophic for French football. The LFP commented that “view the contents of the book” become.
Christophe Bouchet, former president of Olympique Marseille
Marseille’s ex-president Bouchet also claims that the league’s crisis was used to push through the deal. “The clubs wouldn’t have gone bankrupt”said Bouchet. “But the clubs claimed they would all go bankrupt and that there would be chaos.” The mood created in this way made the necessary change in the framework conditions possible.
What is meant is a change in the “Code you sport“, the sports law in France. The establishment of a commercial subsidiary was previously not legally possible. In view of the implied collective bankruptcy of numerous first division clubs, politicians agreed to change the law. However, there was hardly any debate about the effects of the decision and possible alternatives .
200 million for PSG – 1.5 million for the promoted team
There is a rude awakening at the bottom of the table. Because the distribution of CVC’s money stipulated that Paris Saint Germain gets 200 million euros. Olympique Marseille and Olympique Lyon received 90 million each and followed suit OGC Nice, Stade Rennes, Lille OSC and AS Monaco with 80 million each. The remaining clubs received 33 million euros each. Only 1.5 million euros are earmarked for the newcomers, i.e. 0.75 percent of Paris’ share. Promoted Stories AC Le Havre has now announced that it will take legal action.
Jean-Michel Roussier, President of AC Le Havre
Fan groups are now also taking up the topic. In Le Havre, fans burned against the game on Friday (October 20, 2023). Lens Firecrackers and displayed a banner directed at the LFP. “LFP: Forget your Pyro penalties”it said, after all the club still has enough “CVC credit” at the association.
Parallels to the DFL? There is a crucial difference
The French league’s deal is reminiscent of the failed investor investment in the DFL. The DFL also wanted to set up a subsidiary and hand over 12.5 percent of the revenue from the marketing rights to an investor; the DFL also considered CVC the favorite to win the contract. But compared to France, there is at least one crucial difference: the DFL’s plan envisaged a time limit; after 20 years, the rights would have been reverted to the league association. In addition, the investor in the DFL would only have been involved in the income – a permanent sale of shares, as in France, was not planned.
The DFL’s deal with CVC did not find a sufficient majority in the general meeting of the 36 clubs from the Bundesliga and the 2nd Bundesliga in May 2023. There were discussions about the transparency of the process, the examination of alternatives, the fairness of the distribution of money among the clubs and the possible influence of an investor. The sports show had uncovered the investor’s right of veto over certain decisions, which was anchored in the plans. When asked at the time, the DFL did not explain what exactly this veto right would have referred to.
The DFL leadership is now working on a new proposal that provides for less money when an investor joins. The approach envisages a stronger strategic orientation in terms of digitalization and internationalization of the league and less, as in the rejected project, the co-financing of the clubs’ day-to-day business.