As athletes and teams gear up for a summer of sport, the economics of sports broadcasting are coming under the microscope. Broadcasters and streaming companies are increasingly scrutinising their content spending, leaving sports franchises at something of a crossroads. Do they keep chasing potentially smaller pools of cash for their TV rights, or risk going it alone?
France’s football governing body, the Ligue de Football Professionnel (LFP), is the latest league to consider a direct-to-consumer (D2C) play. The business has failed to sell its live rights for the upcoming Ligue 1 season, leaving the top-flight French league without a home as it heads towards kickoff in August.
The LFP will hold its general assembly on Wednesday, where the organisation is expected to propose launching its own Ligue 1 offering in order to avoid a media blackout. Alternatively the LFP will attempt to renogotiate with broadcasters and streaming companies, according to reports, including Amazon, Canal+, DAZN and beIN.
Scrambling for offers
The news follows a tense nine months for Ligue 1, which has so far failed to ship its TV rights for the 2024-29 cycle. The longtime rights holder Canal+ declined to bid back in September, still reeling from the previous auction. After Canal+ lost the rights to Mediapro in 2018, and the Spanish company failed to fulfil its contract, the LFP awarded the vacated rights to Amazon at what Canal+ called a favourable rate.
The discount ended up costing the franchise $600 million per season, losses it hoped to recoup at the 2024-29 auction. With a target price of around €800 per season, the LFP sought to spark a bidding war.
The league cancelled the auction in October, having failed to receive the asking price for the 2024-29 rights. Private discussions reportedly continued, with sports streaming service DAZN emerging as the frontrunner in January. But even after lowering its expectations, the LFP has found itself without a deal with deadline day fast approaching.
Passing the rights
The Ligue 1 case marks an indicator for the state of play in sports broadcasting. Selling the rights to Amazon at a discount was arguably a miscalculation, but given the strain facing incumbent broadcasters, passing football rights to a streaming giant may have seemed a more sustainable option at the time.
But now that streaming companies are also having to focus on profitability, they look less likely to keep shelling out for live sports – not least because these are global platforms having to negotiate for rights in separate markets. Amazon is no longer invested in the Premier League for example, while Netflix is focusing on documentary content and global live rights, such as the WWE and Christmas-only NFL matches.
Sports leagues are therefore keen to pursue D2C options, giving them a level of control and stability that Ligue 1 has been missing these past few years. Many clubs and franchises already have their own streaming services, but are without the live rights needed to scale these offerings. Such a move by the LFP would make it the first European football league to take its domestic rights in-house.
But launching and running a streaming service is a considerable investment, and building the product before August poses a technical challenge for the LFP. And the reason sports leagues sell their TV rights to broadcasters is that this has (so far) been the most lucrative option at their disposal. But if those numbers have stopped adding up for Ligue 1, acting now could help the business head off further declines.
