France Plans to Rescue Soccer League After Double Financial Blow
(Bloomberg) -- The French government is looking at ways to rescue its national soccer industry, battered by a pandemic and the collapse of a crucial broadcasting deal.
President Emmanuel Macron’s administration is considering instruments such as “equity loans,” which don’t need to be repaid right away and can count as equity to repair corporate balance sheets, people familiar with the government’s thinking said. Education and Sports Minister Jean-Michel Blanquer has ruled out a direct handout.
Longer term, other tools include cracking down on the illegal streaming of games and reviewing the players’ salaries which make up more than half of clubs’ budgets, the people said. The people didn’t indicate the extent of any government support, but a union that represents France’s Profession Football League -- which spans two tiers in pro ranks -- has asked for measures worth around 300 million euros ($360 million), including tax cuts. A spokesman for the French finance ministry declined to comment.
Soccer is key to France’s soft power and contributes around 7.5 billion euros, indirectly and directly, to the economy each year, according to Ernst & Young. Losses were already mounting for many clubs even before the coronavirus pandemic forced stadiums to close to fans in March and then, unlike other major soccer leagues, suspended the 2019/20 season. The gut punch, though, came after a 1.1 billion-euro-a-year broadcast deal between the League and Spain’s Mediapro collapsed.
Some clubs expect the government will be trying to encourage as many broadcasters as possible to tender for rights.
“President Macron, being a football fan, will understand that it would send a bad signal to be the only country not to have football on the screen,” said Gauthier Ganaye, President of AS Nancy, a League 2 club owned by Pacific Media Group.
In discounting a bail out, Blanquer, the sports minister, suggested the government wouldn’t want to give a blank check to the League and criticized executives for not obtaining financial assurances as part of its agreement with Mediapro.
Indeed, the optics of handing out state aid to fund the salaries of millionaire sports stars is tricky at the best of times. In this case it’s exacerbated by the questions around the League’s financial management.
“Throwing money at football won’t help unless it’s accompanied by genuine reform,” Enders analyst Francois Godard said. “Any aid should be focused on lower leagues and youth development.”
It was earlier this month that France’s Professional Football League and Mediapro agreed to end their TV rights contract, which will be returned and resold. French pay-TV company Canal+ and Doha-based BeIN Media Group have been regular buyers of French soccer rights in the past while Amazon.com Inc. recently entered the European sports rights market picking up some elite soccer rights in the U.K., Germany and Italy. All three companies declined to comment.
Deputy Sports Minister Roxana Maracineanu told BeIN Sports on Saturday that she hoped “many broadcasters” would participate. As for Macron, who supports Marseille, he’s taking the concerns about soccer’s long-term viability seriously, but isn’t personally involved in wooing any potential bidders, one of the people said. The deadline for bids is Feb. 1.
The League and the clubs already enjoy support through state-guaranteed loans and unemployment benefits that are part of the government’s policy to protect jobs during the epidemic -- Maracineanu estimated that the state is already helping soccer clubs with close to 10% of their budgets.
The so-called equity loans under consideration have been a crucial pillar of France’s Covid recovery plan for other industries. Issued by banks, the loans help to improve a company’s creditworthiness.
A French official familiar with the scheme said soccer clubs could benefit as long as they have solid long-term prospects. The support would make it easier for them to borrow so as they can focus on investment rather than on lowering their debt, the official said.
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