December 17, 2018

facebook twitter linkedin tumblr google pinterest

French Soccer Hunts for American Money

French Soccer Hunts for American Money
Spread the love


LONDON — French soccer is on a selling spree.

Still celebrating its triumph in the World Cup, France is on the lookout for buyers for as many as six teams in its top league, Ligue 1, said Didier Quillot, the competition’s chief executive. Playing the role of matchmaker, he has been hunting for investments in a surprising place — the United States.

Armed with a 32-page investor presentation, Quillot has traveled to the United States six times this year. He hosts lunches and addresses meetings. He urges sports bankers, American franchise owners and other entrepreneurs who have been lured by English soccer to take a look at France instead, as the former Los Angeles Dodgers owner Frank McCourt did when he bought Olympique de Marseille in 2016.

“It’s the next big thing,” he tells them.

Quillot, 59, is a former head of one of France’s mobile networks and one of its largest media companies. He believes he has the skills to “energize” what he acknowledges has been a largely pedestrian organization fixated on rules and regulations rather than revenue and reach, even if it is roughly two decades behind the competitive curve in looking outside its borders for growth.

While France’s recent World Cup victory underlined the prodigious talent the nation has on tap, it also highlighted how far the country’s domestic league had fallen behind its rivals: Kylian Mbappé was the only starter in the final in Moscow who plays for a French club.

The French domestic league lags competitors in revenues, so players forged on the French production line are quickly sold to wealthier teams in rival leagues. The league has for sometime been classified as the fifth of the so-called big five of Europe, whose other members are the leagues in England, Spain, Germany and Italy.

To change the dynamic, Ligue 1 hired Quillot in 2016.

After nailing down a record deal for domestic television rights — it will be worth about 1.2 billion euros annually, or about $1.37 billion annually, beginning in 2020 (comparable to Spain, Germany and Italy) — Quillot is now setting his sights overseas.

He wants American investors to bring not only cash but cachet and marketing experience to Ligue 1, even though most of its clubs lose millions of dollars each season and franchise values have been largely stagnant. His urgency for international diversification — from a country that has often had a less than charitable view of outsiders — illustrates how crucial to success international diversification has become in soccer, a sport in which players and clubs rarely looked beyond their own borders a generation ago.

“It’s high time the French started thinking outward as opposed to inward,” said Jérôme de Bontin, a soccer executive with a unique perspective on the league’s plans, having run Major League Soccer’s New York Red Bulls and also Monaco, one of France’s top performing clubs, in recent seasons.

Quillot said he had lined up potential American buyers for two teams, though he declined to name them. Separately, a consortium backed by King Street Capital and Fortress Investment Group is close to completing a $100 million buyout of Bordeaux.

Yet some American bankers who have met Quillot remain skeptical, saying there are few people in America willing to sustain the annual $10 million to $20 million losses that can come with owning a Ligue 1 team, while waiting for franchise values to rise.

American money has come to play an increasingly significant role in European soccer, especially in England. Those behind the bets have endured mixed results. For every Manchester United or Liverpool, there’s an Aston Villa or Sunderland. Outside England, Roma, which is owned by the Boston hedge fund veteran James Pallotta, has lost more than $225 million since he took over in 2012.

Also, French teams still have to gain a toehold in markets in Asia and the United States, where top clubs from other European leagues have marketed themselves for decades, said Edward Blackmore, who runs OGC Capital, a sports consultancy.

“You are competing against guys who’ve been doing it for 20 years and have massive reach,” he said.

There is perhaps no better example of Ligue 1’s visibility problem than the fact that so far it has been unable to sell television rights in Brazil, which is the home of Neymar, its biggest star. The country obsesses over the fate and form of the skillful forward, and his every move is scrutinized in the news media, but not a single second of live domestic soccer from France is currently available. Local broadcasters are unconvinced of the value of French soccer rights.

Brazil is not alone. The French league’s overseas rights are worth 75 million euros, or about $85.5 million, each season, or about a third of the fee Paris St.-Germain paid for Neymar. Rival leagues generate far more, with the Premier League collecting $1.3 billion annually.

“Our No. 1 main task is looking for investors and our No. 2 main task is improving and increasing the value of our TV rights outside of France,” Quillot said.

Indeed, such low fees for international media rights hold the promise of growth, which is attractive to potential owners. But to achieve it the league will have to come to an understanding with Qatar’s beIN Sports, which controls the domestic rights.

The relationship between Ligue 1 and the Qataris is complex. The country’s sovereign wealth fund owns P.S.G., the all-star team that has drawn most of the attention to the league. Quillot refers to it as France’s “tête de gondole,” or display case.

The Qataris have spent more than $1.1 billion since acquiring the team in 2011, building a roster headed by Neymar and Mbappé, two players whose transfers rank as the first and second most expensive in soccer history. BeIN’s spending on domestic rights has fueled income rises for the other 19 teams, too. But the network has struggled to gain distribution in some countries, especially the United States, where it is largely a premium channel that only a fraction of American households receive.

Quillot said he was in regular contact with Yousef al-Obaidly, the network’s deputy chief executive, to improve the agreement.

Quillot points to statistics showing rising attendances and the record-breaking domestic contract as a sign that Paris’s dominance is not hurting local interest in the league. Still, rival clubs, notably Lyon, which was the dominant force in France before P.S.G.’s Qatar takeover, have at times been outspoken in their frustration.

The league’s new motto, “La Ligue des talents,” alludes to its unrivaled ability to develop players. Europe’s top teams usually feature a French-trained player. Seventy-two players in this season’s Champions League started out in France, while 52 players at the World Cup were formed in an academy there.

Often, players are barely out of their teenage years before they are traded to balance the books. Just eight of the 23 players on France’s World Cup roster earned their living there.

Right now, player trading is what is likely to lure potential investors to France, said Blackmore, the financier. That point is made explicitly in a brochure created by the investment bank Lazard to advertise St.-Étienne, one of French soccer’s storied clubs.

Listing 12 profitable player transactions, the team tells prospective investors it can “detect affordable players with high potential” before developing their skills to “finally make a significant gain thanks to a timely resale while not affecting the sporting results.”

Ligue 1 now has a permanent office in China, its only one outside France, and has signed an agreement to host three editions of its curtain-raising Trophée des Champions in Shenzhen. The first edition this season attracted 41,000 fans. It also shifted match times to accommodate viewers in Asia.

Of course, the Premier League made this move more than a decade ago.



Source link

More from my site

About The Author

Related posts

Leave a Reply