Bordeaux's Bankruptcy: A Lesson In Adapting to the Evolving Sports Media Landscape

Word that the historic French franchise Girondins de Bordeaux filed for bankruptcy recently rocked European football. Bordeaux, which began in the early 1880s as a sports club, previously competed in the first tier Ligue 1, winning six titles. But two seasons ago, Bordeaux was relegated to the country's second-tier league, Ligue 2. Various factors led to the team's downfall. But one force in particular poses an even broader threat to the sustainability of the elite level of French soccer: media rights.
The club's attendance remained reasonably strong despite relegation. On the other hand, a key source of income — sponsorships — suffered. Even before the club's demotion, that revenue source for Bordeaux paled in comparison to that of Ligue 1's top club, Paris Saint-Germain (PSG), by a factor of 12. But the larger consequence of demotion is a significant reduction in media rights revenue.
Yet English clubs relegated from the English Premier League, who suffer the same loss of media-related income, do not usually proceed to insolvency. English club owners are incentivized to "retool" and invest to be promoted back into the top tier to recapture that revenue source. Why the difference? The answer lies in the fact that Ligue 1 as a league is facing a devaluation of its overall media rights. So, investing to climb back to the top has decreasing rewards.
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Importance of An International Following

Ligue 1 began the most recent broadcast contract renewal process by pursuing an auction with a goal of realizing a total of $1 billion annually. However, a lack of interested parties led to the auction's cancellation. Eventually, the league announced broadcast deals with DAZN and BeIN through the 2028-29 season for approximately $524 million per season, half of its stated goal and reportedly the lowest level in 20 years. Among the reasons cited for this devaluation are the recent departures of superstars Kylian Mbappé, Neymar and Lionel Messi to other leagues, increased violence at matches and a lack of success in European competitions by the country's clubs.
This devaluation of the league's media rights is believed to have precipitated Bordeaux's bankruptcy. This should be a wakeup call for the sport in France as there are more signs of financial distress among French clubs, with nearly half of the 18 teams in Ligue 1 rumored to be struggling. To reverse this trend, a more interesting and competitive sporting product should be created to boost viewership not only within the French market but also internationally.
In examining trends in European soccer, cultivating a global audience is key. The European Premier League is the best example. The most recent domestic media rights deal for that league increased only modestly by 4% per annum to around $2 billion (still almost four times more per annum than Ligue 1). However, the value of European Premier League's international rights increased by an impressive 20%. It is believed the European Premier League is now the only major sports league where revenue from international media rights exceeds domestic broadcast income. Spain's La Liga is the only European league that is currently generating a significant portion of its broadcast revenue from international viewers.
Media rights revenue for Italy's Series A and Germany's Bundesliga are mainly sourced domestically, and, like other leagues on the continent, have flattened — the exception being France, which has dropped significantly. Compared with the National Football League (NFL) — the most profitable U.S. sports league — around 98% of the media rights income is from the domestic market, albeit the most lucrative in the world.
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Competitive Balance

In addition to reversing factors cited above, it is vitally important that the lack of competitive balance in Ligue 1 be addressed. Since the 2014-15 season, PSG has ruled the league, winning eight out of 10 titles and finishing second the other two seasons. Last season, the club lost only twice in 38 matches, outscoring their opponents by nearly 50 goals. That dominance has continued this season, even without Mbappé.
It is true that competitive balance has been lacking in other European leagues. Bayern Munich has dominated Bundesliga over an even longer period than PSG. La Liga is only slightly more competitive with Barcelona and Real Madrid, which are perennially competing for the title. But Ligue1 has fallen further behind economically to the point of reaching a crisis. Change is urgently needed.
U.S. professional sports are largely designed with the objective of competitive balance. That business model has proven profitable. The NFL's revenue-sharing system and long-held "any given Sunday" philosophy is perhaps the best example. Its tremendous economic success is driven by ever-increasing media rights values.
Similarly, Major League Soccer (MLS) in the United States was designed under a "single entity" framework to promote competitive balance and avoid what led to the failure of its predecessor league. MLS has had slow but steady success, to the point where Inter Miami could recruit a player of Messi's stature. Competitive balance appeals to U.S. audiences. Following this model would boost French soccer's economic state by creating a sports product that the U.S. and other global audiences will follow. That is the path to increasing media revenue.
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Other Reforms

How French soccer is regulated could also improve. In the weeks before the bankruptcy filing, the Fenway Sports Group — owner of the English Premier League's Liverpool Football Club and the Boston Red Sox — negotiated to buy a majority stake in Bordeaux. However, longstanding debt became an obstacle and the "financial police" of French soccer decided to provisionally demote Bordeaux to the third tier. Negotiations ended after the Bordeaux Council demanded that the debt be written off in exchange for new ownership's use of the team's publicly owned stadium. The entry of a wealthy, successful ownership in the French market could have prevented Bordeaux's bankruptcy and encouraged more outside investment.
Finally, increased violence at matches has negatively impacted Ligue 1. When a league earns a reputation for bad fan behavior, it tarnishes its product. Other countries and leagues have adopted various approaches to address crowd control through partnerships between the league, clubs and public authorities. Addressing this issue improves the game experience not only for those in attendance but also for broadcast viewers.

While France's bankruptcy process is beyond the scope of this article, it is worth noting that while a receiver was appointed, the court has allowed the Bordeaux club to continue competing this season in National 2, or the fourth tier, through January 21. The alternative was liquidation. Whatever relief bankruptcy might offer, the long-term survival of Bordeaux and other French clubs struggling financially will depend on the above-mentioned measures and, particularly, boosting the broadcast value of French professional football internationally.