A year and a half of discussions that shaped the French audiovisual sector. The project to merge TF1 and M6 – the country’s first and third largest networks – lasted eighteen months before demands from the French Competition Authority (ADLC) forced them to abandon the operation. In a report submitted to the parties in the summer, the regulatory body has already identified the risks inherent in the merger of two large groups: a dominant position in the advertising market (which accounted for 70%) and in broadcasting as well. Possible conflicts in the acquisition of copyright.
Risks that ultimately outweighed the arguments of both sides that supported the creation of a French giant in the audiovisual sector that would compete with American content platforms. The project began to take shape in May 2021, when Bertelsmann (the German owner of the RTL group, which in turn owns the M6 channels) announced exclusive negotiations with the first French private television group, TF1. National interest, which M6 claimed was a key factor in the election; The only way to challenge the dominance that selective advertising gives to Disney, Netflix or Amazon, as well as their dominance in the copyright market, which allows them to monopolize the best works and creators.
“It is true that today the audiovisual sector is undergoing a very strong change, advertising-based national televisions have to reinvent themselves if they want to survive,” explains Valerie Michaud, Professor of Strategy, Foresight and Economic Intelligence at Neoma Business School. Paris. “Some, like Amazon, for example, pose even more serious long-term threats; It has adopted a hybrid model of SVOD (video on demand) and TVOD (television on demand) meta-platform, which provides access to paid TV channels. In France, he has already acquired football league, Roland Garros, etc.
The question is what form these changes will take. TF1 and M6 have defended the interest of creating a French champion that can compete with American operators. An argument that critics of the merger ostensibly noted: TF1’s programming in 2021 cost €981 million, M6’s €516 million. A far cry from the $17,000 million Netflix is investing in content for its platform. “An alliance between television actors does not seem to me the best solution to resist disruptions in the sector,” says Michaud. “Each company should think about its positioning, its added value and consider its intersection with other sectors of activity. Technology, for example. Because finding the right partner, in the right sector, to create additional synergies is a matter of innovation.”
Despite criticism of the announcement, the merger idea was welcomed by the French government. “We need strong groups in the private audiovisual sector that offer quality programs for free,” said Roselyn Bachelet, then head of the culture portfolio. The President of the Audiovisual and Digital Communications Regulatory Authority also spoke favorably. More cautiously, Economy Minister Bruno Le Maire considered the merger project “legitimate”.
But despite the government’s goodwill, a report sent to the parties by the Competition Authority (ADLC) in July drew a red line: for the merger to go ahead, either TF1 or M6 would have to divest from one of them. Two large channels. Drawing a parallel with the Spanish market, the request is equivalent to the fact that the national markets and the competition commission ordered Atresmedia to divest La Sexta or Antena 3 as a condition of their merger, or that Mediaset divest Telecinco or Cuatro. .
During this year, both groups presented arguments to overcome the ADLC’s reluctance. For example, in order to avoid the problems that would be caused by a group dominating 70% of the advertising market, TF1 and M6 initially requested that the competition authority expand the analysis of the “reference market” to include not only advertising on television, but Also online advertising, which will significantly reduce the interest.
Thus, in August, TF1 and M6 sent the ADLC a series of measures to overcome the objections: it proposed the separation of the advertising departments for three years and raised the possibility of selling some of the group’s smaller channels. At the beginning of the month, final hearings were organized with the most responsible persons: Thomas Rabe, for Bertelsmann, and Martin Bouyges, for TF1, who came to present their case to those responsible.
But after hearing them, members of the ADLC’s decision committee reaffirmed the report’s conclusions: to qualify, the future entity had to separate from one of its flagships. After a while, the end of the negotiations was announced. “The parties conclude that the project no longer has any industrial logic,” they said in a statement, regretting that “the competition authority did not take into account the breadth and speed of change in the French audiovisual sector.”
At the beginning of the year, a commission was created in the Senate to discuss the issue of media concentration in France. A possible TF1-M6 merger, along with Vincent Bolloré’s absorption of the Lagardere group, prompted a parliamentary initiative. The big owners paraded in front of him, including many opponents of the merger, who took the opportunity to denounce the threat it posed to the sector and accused TF1 and M6 of hiding the main reasons for the merger: cost reduction and a position of strength in the market. .
One of the most critical was Xavier Niel, president of the telecommunications group (Iliad), shareholder of the publisher of the newspapers Le Monde and L’obs, and owner of one of the main European audiovisual production groups, Mediawan. According to Les Echos newspaper, Niel is in talks with MediaForEurope – formerly Mediaset – to submit a joint bid for the M6 now that the road has been cleared.
He is not the only plaintiff. According to the Wall Street Journal, several French businessmen, such as shipping magnate Rodolphe Saade, Stéphane Curbit of the Banijay TV production group or investor Marc Ladritte de Lacharière, are considering entering the bid. Also Patrick Drah, head of the Altice/SFR telecoms empire, and Vincent Bolloré, the head of Vivendi, who actively opposed the merger and who is now evaluating whether to resubmit the offer, as he did last year. However, according to Le Monde newspaper, Czech businessman Daniel Kretynsky, Czech Media Invest (CMI, which already owns several print media titles in France), has taken the top spot in the new race to buy the French channel.
Source: El Diario