UPDATE 1-Second round set for French soccer TV rights
(Adds stock reaction, analysts comments, details)
By Dominique Vidalon
PARIS, Feb 1 (Reuters) - France's professional soccer league (LFP) has extended the bidding process for rights to broadcast top-flight soccer matches over the next four seasons.
The surprise news was seen on Friday as a setback for the money-hungry League which did not get high enough bids.
The terms of the second round of bidding were still unclear but pay-TV group Canal Plus (VIV.PA), who vowed not to overpay, emerged as the winner of the first phase, analysts said.
Shares in media group Vivendi (VIV.PA), the parent of Canal Plus, gained more than 4 percent on Friday.
In a statement on Thursday night, the league announced no packages had been awarded despite the fact that nine contenders submitted 31 financial offers.
It gave no reasons for this but analysts said this meant none of the packages up for grabs in the complex auction found buyers at the minimum price sought by the league.
Another unknown is whether the second round will be an open bidding process or a direct negotiation between the league and the key bidders, analysts said.
The two main contenders in the auction - Canal Plus and France Telecom's mobile unit Orange (FTE.PA) - were now in a stronger bargaining position and a bidding war between the two groups in the second round was unlikely, several analysts said.
"Overall, this so far validates our scenario of stability in prices and sensible bidding," Exane BNP Paribas analysts said in a note.
"This should be taken positively for Canal as investors had been anticipating a worse outcome...This is also reassuring on France Telecom," they said.
VIVENDI SHARES GAIN
By 1150 GMT, Vivendi shares were up 4.36 percent at 28.02 euros and France Telecom shares rose 1.82 percent to 24.06 euros.
"Canal Plus is in a strong bargaining position and Orange has not proven to be too aggressive," Societe Generale analysts said in a note.
For Canal Plus, "Yesterday's non-announcement means that Orange's ambitions are not excessive... even if nothing is certain at this stage, the probability of a favourable outcome is higher than ever," Natixis analysts said in a note.
The league, which launched the tender in November, had set up a complex packages system in order to attract a large number of bidders as it wanted, at least, to match the 600 million euros ($882 million) a year it currently receives from Canal Plus for the exclusive rights from 2005 to 2008.
The minimal prices offered in the second round have not been disclosed but according to French newspaper Liberation total offers for 12 packages did not exceed 400 million euros.
The League would not comment. It only said in its Thursday statement the first round showed "real competition" between two major players and it had decided to "open a second phase of the process in coming days that will cover all the lots".
ORANGE BIDS
The French league only disclosed that Orange had bid on several TV rights packages "including the premium lots".
It did not say who the second major player was but according to media reports, Orange bid for all of the 12 packages on offer and Canal Plus for 10.
Canal Plus declined to comment.
An Orange spokesman tied the group's participation in the auction to its "content strategy", saying its mobile and triple play subscriber base wanted "premium content".
According to media reports other contenders for some of the lots on offer included mobile operator SFR (VIV.PA), commercial television groups TF1 (TFFP.PA) and M6 (MMTP.PA), state-owed television group France Televisions.
Others were digital terrestrial channel Direct8 which belongs to financier Vincent Bollore and online video sharing group DailyMotion.
In November, the Ligue de Football Professionnel sought bids for the rights to the seasons between 2008 and 2012, breaking the rights into 12 packages instead of the four used in the previous auction.
The new structure includes three premium packages for prime-time matches as well as three "fan" packages covering the fixtures of specific clubs. There is also a mobile phone package.
Many uncertainties remain, including regarding the process itself which has been challenged by Canal Plus in courts.
The Paris Tribunal de Grande Instance (TGI) is slated to rule on Feb. 19 on Canal Plus's latest challenge to the tender. (Additional reporting by Benjamin Mallet) (Reporting by Dominique Vidalon; Editing by David Cowell)
