France’s Autorité de la concurrence (Competition Authority) has relaxed certain obligations imposed on the Canal+ Group which will allow it to distribute a ‘premium’ channel such as beIN Sports, exclusively in its bundles. The Authority also lifted existing restrictions on the purchase of rights to American films, while maintaining the constraints imposed on Canal+ for the retransmission of French films. The restrictions were variously imposed following its merger with TPS in 2006 and the acquisition of Direct 8 and Direct Star in 2011
Canal+ said it noted the Authority’s decision to relax its restrictions, suggesting that it reflected a partial recognition of past and future upheavals in the free and pay-TV markets, marked by the rapid emergence of powerful competitors, particularly active in the acquisition of audiovisual content.
Deutsche Bank’s media analysts published, in a note to clients, a summary of the changes, reports Chris Forrester. They are:
Laurie Davison, media analyst at Deutsche Bank, in his comments on the changes, said the granting of exclusivity over third party premium channels (possibly Disney, Discovery, or HBO from 2019), a stronger CanalPlay service and potentially broader US content deals should benefit churn and additional subs.
“Every 1% of [reduced] churn is worth €50m to EBITA. We have incorporated a decline in churn from 15% in ’16 to 13% by 2019, worth 3-5% to the market’s consensus Vivendi earnings. While discussions with Vivendi suggest no resumption of the beIN deal is imminent, we note there is now scope for this deal in the medium term, or a joint bidding strategy for the next Ligue 1 rights round. We have estimated a resumption of the C+- beIN deal, allowing C+ to exclusively sell beIN channels, could be worth €60m to EBITA by 2020E; 6% of C+ EBITA and 2% of Group revenues. The ability to offer more content exclusively & CanalPlay to key telco partners boosts prospects for deeper wholesale deals. Press reports of a deeper deal with Orange have suggested €150m-€200m pa in payments; which would be worth 11-15% to consensus Vivendi’s earnings.