Canal+ mulls options as competition watchdog rejects BeIN Sports deal

France’s competition watchdog has rejected Vivendi-owned Canal+’s plan to become exclusive distributor of the BeIN Sports channels in the country, enabling it market a full complement of French football rights and other sports rights.

The pay TV broadcaster said that it would have to “work on other solutions to arrest the losses of the French Canal+ channels”.

Canal+ has suffered a sharp decline in subscribers and is, according to its management, on course to lose over €400 million this year unless radical action is taken.

The French competition authority ruled plainly that it considered “that the conditions are not currently satisfied to lift the ban on exclusive broadcasting of premium sports” imposed on Canal+ four years ago, which is not due to expire until 2017.

The ban was imposed as a result of a review of whether Canal+ had fulfilled earlier obligations imposed on it at the time of its 2006 merger with TPS.

The regulator said that, in relation to football rights in particular, the market structure, “close to a duopoly between Canal Plus Group and BeIN Sports, is still characterised by Canal Plus Group’s dominance”. It said that Altice-owned SFR’s acquisition of English Premier League rights “remains to date an isolated experience, thus not proving the emergence of a sufficient and sustainable competition on the market”.

The Autorité de la Concurrence added that Canal+ continued to hold a dominant market share in pay TV with between 70-80% of the market.

The watchdog cited the negative verdict of media regulator the CSA in relation to the Canal+ plan, and highlighted the CSA’s view that the the “isolated revamping” of the premium sports non-exclusivity rule would jeopardise the “clear game rules” governing channel providers’ distribution deals with Canal+ and the ability of rival service provders to compete by gaining access to appealing content.

The decision leaves Canal+ with the option of cutting costs further, and in the longer term the possibility of reviving a deal with BeIN Sports in 2017. However, this may be subject to a further review by the Autorité de la Concurrence. Canal+ can also continue to cooperate with BeIN Sports on a non-exclusive basis, but this carries the risk of building up a rival.

Vivendi chairman Vincent Bolloré has threatened that Canal+ could shut down entirely if it fails to stem its losses.