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LFP turns to €224.5m state-guaranteed loan to plug TV rights gap

The general assembly of France’s Professional Football League (LFP) has today adopted a resolution that will enable the league to take out a state-guaranteed loan to make up for the shortfall in broadcast rights monies caused by the termination of the 2019-20 season.

The LFP said today that the loan from its bank would allow it to pay Ligue 1 and Ligue 2 clubs “all the sums still to be collected for broadcast rights for the 2019-20 season”.

A loan of €224.5m ($245m) will be taken, reports L’Équipe, in order to compensate for the broadcast rights sum that would have been paid by pay-television broadcasters Canal Plus and beIN Sports.

The loan will cover rights fee payments that were due on 5 April and 5 June in order to ease clubs’ cash flow concerns.

Canal Plus last week informed the LFP that it would be terminating its agreement. The broadcaster acted swiftly after French Prime Minister Édouard Philippe told the French parliament that the current seasons of professional sports, including football, would not be able to resume because of the spread of the Covid-19 pandemic.

Canal Plus paid around €37m ($40.4m) as part of a settlement with the LFP for fees to matches already played, but insisted on a clause that it would make no additional payment if the 2019-20 season did not resume.

The two broadcasters had warned the LFP in March that they would not be making their latest rights fee instalments due on April 5. These amounted to €110m and €42m, respectively.

The Qatar-backed beIN was faced with a €15m rights fee payment for matches already played and is thought to agreed to pay a reduced sum of €10.6m under its compromise agreement with the league.

The LFP’s deals with Canal Plus and beIN Sports for Ligue 1 and Ligue 2 are worth a combined €748.5m on average per season from 2016-17 to 2019-20. The Ligue 1 rights represent €726.5m – or 97 per cent – of that sum, with the broadcasters’ Ligue 2 rights deals worth a total of €22m per season.

In response to the Covid-19 outbreak, the French government put in place a scheme to help businesses navigate their way through the financial crisis. The scheme allows companies to apply for a loan from their bank of up to 25 per cent of their latest turnover.

Through BPI, the French investment bank, the loans are guaranteed up to 90 per cent by the state, and those who take out the loan will have a maximum of five years to pay it back.