French football clubs stares at financial black hole

PARIS: The financial crisis facing football as a result of the coronavirus pandemic has been laid bare in France, where a decision to withhold payments due as part of a broadcast deal for Ligue 1 matches is set to leave clubs reeling.

Canal Plus, the pay TV giant and long-time broadcaster of France’s top flight, stated its intention to hold back a scheduled €110mil (RM521mil) payment in a letter to the French league revealed by the country’s leading sports daily,

L’Equipe.

The money is in theory due this weekend and is the equivalent of 15% of the total broadcast money for the season in Ligue 1.

“In case of force majeure, when matches are no longer played, then payments are suspended,” a senior management figure at Canal Plus said.

“This is the perfect example of

force majeure. There are no more matches, so there are no more payments.

“We are strictly applying the terms of the contract and we don’t see why we would do it any other way. Canal Plus is not a bank.”

The French top flight is the fifth-richest league in Europe although its income lags some way behind those of Italy’s Serie A, the German Bundesliga, Spain’s La Liga and, in particular, the English Premier League.

French clubs, like their counterparts across the continent, have been hit hard by the health crisis which had already forced matches to be postponed or played behind closed doors before UEFA suspended all club competitions in Europe a fortnight ago.

Clubs will now have to absorb the shock of not receiving money for which they have budgeted, and income from broadcasters is a huge portion of their revenue.

Indeed, payments from television companies amounted to 36% of total revenue for Ligue 1 teams last season, by far their biggest source of income, according to the DNCG, French football’s financial watchdog.

A further 25% came from player sales, which are likely to be affected this year too.

“They have their problems and we have ours. There needs to be a dialogue so we can find solutions,” said a member of the board of the French league, the LFP.

“I don’t think the decision by Canal Plus is irreversible.”

L’Equipe has claimed that Paris St Germain, the Qatar-owned giants who dominate the French game, stand to lose as much as €215mil (RM1bil) between now and the end of June, assuming the worst-case scenario in which no more games are played and all projected gate receipts and Champions League revenues are also lost.

Several French clubs, including Lyon and Marseille, have placed their squads on partial unemployment to save money, a move that means they only pay 70% of salaries with the state paying the rest, albeit limited to €4,850 (RM23,000) per employee. — AFP