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Ligue 1 clubs on the brink of bankruptcy amid unresolved broadcast deal

DAZN recently made bid worth €375m for media rights of Ligue 1

Several Ligue 1 clubs, including Lens and Nantes, are facing potential bankruptcy due to an unresolved broadcast deal in France. The French Professional Football League (LFP), which governs France's domestic leagues, is currently deciding between a $406 million offer from DAZN for domestic rights or launching its own paid streaming service.

The outcome of this decision will significantly impact how active Ligue 1 clubs are in the transfer market. Most clubs are waiting for news on a potential breakthrough before making any moves. Furthermore, this decision could also influence how the LFP negotiates media rights for Ligue 1 in the United States.

DAZN deal or streaming service?

According to French outlets, a group of Ligue 1 officials recently met to negotiate their TV rights deal dilemma. They have two options: sign an unfavorable deal with DAZN through the 2028-2029 season or launch their own streaming service. This predicament stems from Mediapro's acquisition of domestic rights for Ligue 1 after outbidding Canal+, who had been partners with the league for over three decades. However, Mediapro missed payments due to COVID-induced financial difficulties and ended up paying a $108 million severance fee halfway through their contract. 

Now approximately $500 million short of their initial Mediapro deal, Ligue 1 sold off remaining games to Amazon over Canal+ at a reduced price of $280 million. With less than a month until kickoff time for next season’s matches, one option being considered by league officials is accepting DAZN’s offer worth half their previous valuation ($406m). This would provide an opportunity for DAZN to expand throughout Europe after missing out on the domestic rights to the Premier League matches.

Alternatively, Ligue 1 could launch their own over-the-top streaming service in partnership with WarnerBros Discovery. This non-exclusive service would broadcast all Ligue 1 games, allowing the league to generate revenue while reducing their exposure to TV audiences. The proposed monthly subscription fee is $27. Amazon, Molotov TV, and Google TV have also expressed interest in associating with this potential streaming service.

The implications of delayed decisions

The indecisiveness has led to a tense period of negotiations for Ligue 1 officials as the league's value continues to plummet each week. If no decision is reached soon, smaller clubs such as Auxerre and Angers could face bankruptcy. Aside from PSG and Lyon who recently sold over $400 million in assets, most clubs are anxiously awaiting news about negotiations before making any moves in the transfer market. For instance, Lens may be forced to sell Arsenal target Elye Wahi due to its debt exceeding $100 million.

The unresolved broadcasting deal will also significantly impact American viewership of Ligue 1 matches since no broadcaster has acquired American rights after BeIN SPORTS' contract expired. If Ligue 1 launches its own streaming service domestically, it might do likewise in America. 

As it stands now, there are no updates concerning which broadcaster will secure American rights for Ligue 1 matches. However, there have been discussions about marketing their league differently within the United States by potentially hosting some games locally.

With only five weeks left until kickoff time for next season’s matches on August 18th , time is running out for French football officials to resolve these pressing issues surrounding domestic broadcasting rights.

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