VIVHY Vivendi SE (PK)

By Nick Kostov 

PARIS--French company Vivendi SA is in talks with beIN Media Group that could lead to the purchase of the Qatari-owned company's channels in France, according to people familiar with the matter.

The companies are discussing a range of options from a full acquisition to an exclusive distribution deal, the people said, cautioning that no agreement was certain.

"We've been competing for years, so the companies know each other perfectly," one of the people said, adding that a deal could be announced in February or early March.

A deal between Vivendi and beIN Sports France would be the latest shake-up over what Cable and satellite-TV providers have complained about for years: the rising cost of sports programming.

BeIN Sports entered the French market in 2012, quickly becoming a formidable competitor to Vivendi's pay-TV unit, Canal Plus. It has spent millions of euros scooping up live sports rights, including UEFA Champions League and French Ligue 1 soccer games.

The channel now counts more than 2.5 million subscribers in France. But turning a profit has proved more difficult. Analysts at Natixis estimate the channel is losing between EUR250 million and EUR300 million ($270 million and $326 million) a year given it charges subscribers just EUR13 a month for expensively acquired sports content. The price of beIN Sports France isn't known, but Natixis estimates it at around EUR500 million.

The battle for sports rights has intensified as big broadcasters try to lure customers, draw advertising revenue and protect other parts of their territory such as broadband packages.

In November, French telecom and media tycoon Patrick Drahi's Altice NV brought the exclusive rights to English Premier League soccer in France, depriving Canal Plus of one of its most lucrative assets. Analysts have said that the loss of the Premier League rights could lead to hundreds of thousands of subscribers leaving Canal Plus.

U.S. rival Discovery Communications Inc. is also bidding aggressively for sports rights in Europe through its purchase of Eurosport.

The talks come as Al Jazeera, of which beIN Media Group is an affiliate, is preparing significant cuts at some of its channels in reaction to economic problems caused by the oil price plunge. This month, Al Jazeera said it would shut its U.S. cable channel by April 30.

For Vivendi, a deal with beIN Sports would replenish Canal Plus's shrinking library of sports rights, helping to lock in fans on its platform and stem customer losses. BeIN Sports said this month it had secured the rights in France to the 2018 and 2022 World Cups.

Any deal would likely face tough antitrust scrutiny given Canal Plus's dominant position in sports broadcasting in France, a person familiar with the talks said.

Write to Nick Kostov at Nick.Kostov@wsj.com

(END) Dow Jones Newswires

January 28, 2016 15:40 ET (20:40 GMT)

Vivendi (PK) (USOTC:VIVHY)
Historical Stock Chart
From Jun 2024 to Jul 2024

Vivendi (PK) (USOTC:VIVHY)
Historical Stock Chart
From Jul 2023 to Jul 2024