This case study has been published in:

Pillot J. (2009), «La valeur marchande du produit ‘Ligue 1’ risque-t-elle de se déprécier? », Revue Lamy Droit de l’Immatériel, 48(4), 46-50

Pillot J. (2009), « Should we Expect a Drop of the “Ligue 1” Value? », Revue Lamy Droit de l’Immatériel, 48(4), 46-50

This work is cited in the Marie-Dominique Hagelsteen report on “the distribution and transport exclusive agreements in the pay TV sector” commissioned by the French Prime Minister  (final report, January 2010).

 
Judgments & Legal References : Judgment n°J2008006957 of the Tribunal de Commerce de Paris (February 2009, 23rd).

 
Overview
: With a new design of the “Ligue 1” TV broadcast rights in several batches, the French Ligue de Football Professionnel have preserved the value of its flagship product despite an unfavourable competition framework. As a new player on the “Ligue 1” diffusion market, Orange launched a new football-dedicated channel which access is exclusively reserved to its own triple-play subscribers. The efficiency of such strategy needs, however, further inquiry. First of all, from a dynamic perspective, one may fear the Professional Football Clubs competitiveness to be dramatically spoiled. As for the consumers, they suffers additional costs which could, ultimately, diverting them to foreign competitions. In a context where Orange’s commercial behaviour seems to be challenged by antitrust authorities, I balance the needs for ‘Ligue1’ future developments and growth with the competition framework on this side of the market. 


Main Results :

  • The lack of competition on the downstream side of the “Ligue 1” market, in which the leadership of the traditional broadcast operator (Canal +) sounds very difficult to contest in the short term, leads the rights’ supplier (LFP) to design its product in several batches in order to avoid monopoly capture.
  • From a static standpoint, such strategy is mutually profitable in making possible the introduction of a new competitor (Orange) into the upstream side of the market and preserving the product’s value at an artificially high level.
  • From a dynamic point of view, this strategy might be proven inefficient yet, especially because of the “pay more for see less” phenomenon on the consumers’ side of the market.
  • There must be causation – or at least correlation – between the “Ligue 1” brand new lack of visibility and the drop of both live audience and TV rates.
  • Present Football Clubs profit-sharing schemes, partly based on prime-time broadcast, might prove ineffective if the product segmentation is likely to lead operators to mainly focus on top teams.
  • In the meantime, the traditional operator offset its lack of national football broadcast opportunities by a very attractive offer of European football. Partners and sponsors may be likely to follow the same path.
  • Under certain circumstances, exclusive rights likely to grant the opportunity of a single firm to serve all the market might turn out efficient in the long term.