Navigating Change: All about LFP’s new Media Rights Tender and what it means for Sports Broadcasting
The French Ligue 1 returned to action recently, kicking off the 2023-2024 season in the French top-flight.
With some notable transfer sagas coming to their eventual conclusion and Lionel Messi and Neymar JR, both having made their way out of Paris Saint Germain, this season could follow an unpredictable trajectory to see who will be crowned the next champions of France.
But on the business side too, a new story is about to be written, as the domestic tender process kicks off on September 12th, 2023. With the LFP - Ligue de Football Professionnel’s recent decision to accept media rights bids from broadcasters for a period of 5 seasons, France Football’s governing body follows suit with other top European football leagues such as LaLiga and Serie A in issuing their media rights bids for 5 years.
The LFP’s current media rights deal with Canal+ and Amazon has been in existence since the 2020/2021 season and will run its course at the end of the current season completing the 4 year agreement as originally established. LaSource explains the nuances of this existing agreement and what the future holds for the LFP with a longer rights agreement.
Current Media Rights Deal: 2020-2024
After reconducting the tender process following Mediapro’s fallout, Amazon was awarded Mediapro’s share of the rights. Amazon clearly sensed the opportunity, considering the streaming giant pays less than Canal+ for broadcasting more games than its counterpart.
Canal+, a well-established player in the broadcasting domain, especially in France brings its wealth of experience and reputation to the table. Their extensive reach and strong foothold in the market ensures a robust foundation for LFP's content dissemination within the local french market. The relationship between the LFP and Canal+ goes back a long way as the french broadcaster held the major rights to the league for decades until the end of the 2016-2020 cycle.
Both parties however, faced some turbulence at the last tender process for the current media rights cycle in which the major rights were originally awarded to Spanish broadcasting company MediaPro.
New Media Rights Tender from 2024 to 2029
One key change that has been announced is the intention to extend the duration of its domestic broadcast contracts from four to five years. This intent follows general evolution on the media rights market towards longer-term contracts, as recently also announced by LaLiga, Bundesliga and Serie A.
SportsBusiness - “LFP follows LaLiga, Serie A with five year rights bid plan”
Clearly, the LFP believes that longer agreements spanning five years could yield greater revenue and enable it to attain financial parity with prominent European leagues from England, Germany, Italy, and Spain, all of which boast more profitable television contracts.
But what’s the business rationale for these longer-term cycles and what would be the risks? In this article, we try to give you some more insights.
Towards Longer Term Media Rights Contracts - LaSource’s Take:
In considering the bigger picture, leagues must meticulously choose partners who align with their ambitions and vision for strategy and content creation, all tailored to a mutually defined target market. More than ever, we’re moving away from the “take the money and run-strategy” towards a true partnership model. But this requires rethinking the business model and putting in place the right business context to succeed. Length of contract being one of those key elements.
“Growth is still there, but only to those who are best prepared and anticipate the changing landscape” - Leander Monbaliu, Chief Business Officer and Partner at LaSource.
Listen to Leander talk about Broadcasting, Digital Transformation & Sports Entrepreneurship on the WFS Podcast.
Stability:
Longer-term contracts provide for a more stable environment, both financially and strategically, for the clubs, the leagues and the broadcaster. If anything, events like COVID and recent geo-political events have shown that markets, even the football market, can be heavily impacted.
Adding the specific events from the previous messy rights process to the picture in France, all stakeholders, including investors, are probably desperate for more stability to rebuild relationships, budget and longer-term commercial strategies.
Product:
A longer-term partnership allows for investment in the product that is offered to the fans. It’s worth building a brand and product together through joint efforts.
This opens the door for joint activations, data sharing and exploring commercial synergies. The end-product, and this way the fans, can certainly benefit from this more coherent and advanced media product.
Competition:
It seems contradictory, but longer-term contracts can create more competition on a market, this way creating more value from the rights tender process. The historic position of competition authorities overseeing these tender processes has therefore evolved, as they came to realise that the only way to attract new entrants in a market, is to offer them longer-term contracts (and exclusivity).
The reason is pretty simple, entering a domestic market requires huge investments, from marketing to product, technology and production. Profitability (if any) can only be expected after 4 to 5 years. So, when legislation imposes short-length contracts to avoid lock-in, they, in consequence, considerably increase barriers to entry. Which means there will be fewer contenders and less competition. This same competition drives the contract’s value up when broadcasters are battling to acquire the best packages.
Innovation:
It’s often argued that longer-term contracts reduce the incentive to innovate. Yet, we believe that the opposite is true, especially talking about 5 year contracts, which are still relatively short in the bigger scheme of things. Our view is that to innovate in the sports business, all stakeholders need one another: broadcasters, league and the clubs.
Creating synergies between those stakeholders is where the innovation magic happens. And to create an innovation friendly environment, it’s indispensable to work as partners for the longer term. Transformation and innovation requires stability. As an example, it’s enough to refer to the US market, known for its innovation, where longer-term contracts are most common.
What can we gather from MLS’s recent media rights agreement with Apple TV?
The MLS’s recent media rights deal with Apple TV is a concrete example of the exact notion of securing stability through long term media rights contracts.
Having agreed a 10 year deal worth $2.5 billion, the MLS bundled its local, national and international rights all in one single package granting exclusivity to Apple TV facilitating a collaborative investment into the final product for the fans.
The league is constantly growing in terms of value which is evident from the uptick of $160 million it has achieved in its annual media rights valuation. (Current valuation - $250 million; Former valuation - $90 million) which is bound to elevate the value of the next media right tender.
However, with the 2026 FIFA World Cup looming over the horizon, the MLS would be unable to capitalise on a potential surge in interest despite being assured of a broadcast partner in Apple TV for the foreseeable future.
Keen on learning more about our media rights services for sports organisations? Head over to - ‘Our Services for Sports Organisations: Media Rights Strategy’