PARIS: France's competition watchdog has blocked a distribution rights deal between Vivendi's Canal Plus and Qatar-controlled beIN Sports, delivering a blow to billionaire businessman Vincent Bollore's efforts to revive the French pay-TV channel.
Media and shipping tycoon Bollore had bet heavily on the exclusive 1.7 billion euro ($1.93 billion) five-year deal for sports content to stem a subscriber exodus that has accelerated since he took the helm of Vivendi's board in 2014 with a vow to cut costs and reshape Canal Plus.
"The duopoly that would have represented Canal Plus and beIN Sports would have controlled 80 percent of sports rights" in France, the competition authority's president, Bruno Lasserre, said after announcing the veto.
Such market dominance was considered potentially detrimental to consumers and internet providers that distribute beIN Sports channels.
"Bollore will have to work on other options to restore Canal Plus' profitability: increase subscription prices, acquire companies to improve content offerings, keep on cutting costs," said Stephane Beyazian, an analyst at Raymond James.
Vivendi's shares were down 1.38 percent at 16.40 euros by 1451 GMT, against a 0.77 percent decline for France's CAC 40 blue-chip index.
Bollore has pledged to turn around the pay-TV channel, which was founded 32 years ago and has let slip a commanding market position that was forged by offering coded movies, soccer and other popular sports and late-night pornography.
His first decisions to fire the channel's top management, cut free content and put cult satirical puppet show "Les Guignols" behind a pay wall, reduced to a weekly edition, came in for fierce criticism in the media and on social media. Bollore maintained that his priority was to stem losses at Canal Plus' French channels.
The losses totalled 264 million euros in 2015 and could reach 400 million euros this year, Vivendi has said.
Asked whether Canal Plus could be at risk of bankruptcy, Lasserre said: "We don't think so.
Is it a tragedy? I can't imagine that the concerned actors haven't thought about alternative strategies Canal Plus needs to reinvent itself." Canal Plus had 5.5 million French subscribers in March 2016, down 469,000 from the same month last year.
Its audience has shrunk since the Qatari group syphoned off much of its flagship European soccer content.
Facing heavy competition from original content producers such as Netflix and sport rights distributors such as beIN Sports, Canal Plus needed to cut costs and reposition itself, Bollore said.
It also faces new competition from telecoms groups such as SFR, which controlled by Franco-Israeli tycoon Patrick Drahi, who has acquired English Premier League soccer rights for France and US-based Discovery, owner of Eurosport.
French daily L'Opinion was first to report the veto.
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