Asked on June 21, during the board meeting presenting the terms of the future League channel, how the clubs were going to manage their cash flow needs, Vincent Labrune, the president of the LFP, responded in substance that he did not know yet. While officially continuing to repeat “trust Vincent” and hoping that in the end the landing will be as smooth as possible, club leaders are worried and are looking for solutions to avoid running out of cash in the coming weeks.
They may not need it if a broadcaster ends up positioning itself quickly. In the case of the creation of a League channel, their efforts may not be useless. Those who can count on a solid shareholder, such as PSG, Nice, Rennes, Monaco, Strasbourg and Saint-Étienne or funds such as Toulouse and Lille, will be able to hope for an extension to feed their treasury. For the others, those whose president is also the reference shareholder such as in Nantes, Reims, Montpellier, Lens, Brest or those like Le Havre, Auxerre and Angers with limited means, if the owner does not want to or cannot cover, the situation could quickly become perilous and some could risk filing for bankruptcy.
Bank loans, calls for investment funds, factoring…
No collective action has yet been taken, according to our information, but financial specialists are looking at solutions for several of them. Among them, there is the classic bank loan but, without knowing the amount of the rights, the banks, already scalded, are not going to rush. “And their study and response time is much too long compared to the urgency,” says an expert.
Investment funds can also be called upon, and factoring is another possibility. This practice is common during transfers. For example, a club, which must receive €10 million in five installments for the sale of one of its players, is advanced the €10 million immediately by an organization. Others look at contracting financial debt on the markets with funds, insurers or any other financial body. A fairly widespread modus operandi in US sport.
Theoretically, the first payment of TV rights should be made on August 15, the second on October 15 and the third on December 15. “If the TV rights are not paid by December, for average clubs there will be a shortfall of between 8 and 12 million euros in cash,” says a manager. For most of them, the drop in TV rights is compounded by the loss of CVC revenue compared to the previous two years (€16.5 million each time). The first payment is often important for the clubs’ cash flow because the sums of sponsorship contracts are not generally significant at this date, and conversely, transfer deadlines often have to be settled, even old ones.”
These “average” clubs would welcome the fact that the last payment of CVC, some €400 million, is not paid to the top clubs as planned but is used by everyone in this period of crisis. And they may be tempted to accept a firm but low offer from a broadcaster while the big ones might prefer a more attractive one, with bonuses.
