Ligue 1 highlights football's ticking timebomb that could change everything
What happens when TV companies say no more?
For years football clubs have tried to diversify their revenue streams.
First, it was ticket prices, and pushing those as high as possible to make even the most hardcore fan wince at the outlay. Then it was merchandise, and branding everything possible with a club badge in order to sell it.
Then, in the 2000s, the true commercialisation of football began, with huge sponsors paying for everything from naming rights to front-of-shirt activations. And even in covid, we had the disastrous tie-ins with crypto, fan tokens and all sorts of other nonsense designed to fill in gaping holes in the budget.
And it’s all because of one thing - TV revenue still absolutely dominates the landscape, and without it, a league can go from being competitive to an also-ran literally overnight.
That’s the scenario facing Ligue 1 at the minute. Following the brutal collapse of an overpriced deal with Mediapro in the wake of covid, the French bigwigs were forced to make do with a cobbled together deal with Canal+ and Amazon that pays in the region of €600m a season - significantly down from the €800m+ Mediapro agreed to.
But now even that number is looking ambitious. Ligue 1 put their rights out to tender for the 2024/25 season and beyond and found the appetite within the landscape to be extremely sterile. Ligue 1 supremos wanted €1 Bn a season - hopelessly ambitious, and in the end they are likely to land on a figure closer to half of that, having pissed off Canal+, DAZN and Amazon in various ways.
But it’s indicative of the space. Serie A were similarly ambitious in their efforts to secure a market-leading deal in 2023 and in the end had to settle for a small reduction, with DAZN securing the lion’s share.
The Premier League is fortunate that it has secured its future with Sky until 2029, but only by offering them a gigantic number of additional games as a result, which diluted the overall package.
And so Ligue 1 are left with a situation not-too similar to what Scottish football faced way back in 2002 when their Sky Sports deal collapsed; have a OTT platform ready just in case no-one makes you an offer.
It’s an insane situation to be in. Ligue 1 clubs - with the notable exception of one - can’t contribute to the transfer market because they’ve no idea what their broadcast revenue split will be at the end of the season.
And it is a surefire sign that the traditional TV revenue model has peaked. Cord-cutting continues, content consumption has drastically changed, and the demand for ‘event sports’ - rather than the mundane league fixtures football has cornered itself with - means that the value of those games goes way, way down.
Ligue 1’s OTT numbers look ambitious at the very best. They need two million subscribers to their own channel just to get somewhere near the deal they had this season. They see that rising to over 3m in the course of three years. They have included marketing, broadcasting and distribution costs but these seem thrown together and underestimates why sport NEEDS TV companies. They pick up all of that slack and have all of the knowledge. There’s a reason no-one, not even the global power of the Premier League, has opted to do it before.
Instead, we’ve got French football trying to set this up - or not, if they can do a deal - eight weeks from the start of the season.
Make no mistake, this is an absolutely pivotal moment for the existence of Ligue 1.
A league where fans weren’t particularly keen to spend €15 a month to watch the procession to the title of an overpowered PSG team, one that is now without Lionel Messi, Neymar and Kylian Mbappe. Now they’ll be ask to pay double that for what will, for at least the first six months, have huge teething problems and production issues.
It’s a situation no domestic league wants to find itself in, and yet here we are. And it could represent the ultimate warning to all other sporting clubs - diversify your revenue streams as much as possible, because TV won’t always be there to bail you out.