UPDATE 1-Canal Plus loses in French soccer rights ruling

(adds Canal Plus reaction)

By Dominique Vidalon

PARIS, Jan 11 (Reuters) - France's State Council on Friday rejected an attempt by pay-TV group Canal Plus (VIV.PA) to scrap a controversial condition set by the country's professional football league in a tender for soccer rights.

Canal Plus challenged the league's right to exclusively produce the images that broadcasters transmit under the deal for top-flight matches over the next four seasons,.

France's highest administrative court ruled that the matter did not come under its jurisdiction.

If the court had backed Canal Plus, which is part of media group Vivendi, the league would have had to launch a new tender that dropped this production clause.

The television group, which wants to video the sports events itself, said in a statement the State Council had only declared the matter out of its jurisdiction and had not ruled on the validity of the football League's decision.

"Canal Plus will examine all legal ways to overturn the (football) league's unilateral choice to give itself the monopoly on filming matches," Canal Plus said.

The league said the court ruling put an end to "the first step of a legal marathon decided by Canal Plus alone, with the sole purpose of preventing or delaying as much as possible the regular tender process for the football rights."

CIVIL COURT APPEAL

Canal Plus has also filed an appeal with a French civil court to halt the tender.

The Tribunal de Grande Instance (TGI) is to rule on that appeal on Feb. 19, and Canal Plus has asked for an accelerated legal procedure to suspend the soccer rights auction until that date.

In the case with the State Council, Canal Plus argued that under French law, the league can sell the rights to broadcast the matches but cannot also claim the right to produce the images of these matches.

The league has contended that producing the images of the games is a way to introduce fresh competition into a market dominated by Canal Plus since its merger with France's other pay-TV operator TPS, because it can sub-contract to other production firms.

In November, the Ligue de Football Professionnel (LFP) began seeking 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.

It announced a complex new structure that includes three premium packages for prime-time games as well as three 'fan' packages comprising the rights to games of particular clubs. There is also a mobile phone package.

Bidders for the different packages must submit proposals by Jan. 22, with the bidding process to be completed by Jan. 31.

The league is seeking to attract a large number of bidders so that it at least can match the 600 million euros ($882 million) a year it currently receives from Canal Plus for the the exclusive rights to three seasons from 2005 to 2008.

Canal Plus has already said it is keen to cut the amount it pays, citing the poor entertainment value of French teams recently. (Additional reporting by Marie Maitre, Editing by Quentin Bryar and David Cowell)