The framework of the discussions is clear between Orange and Canal +
The operator and the encrypted channel seek to align their interests. The alliance will have to go beyond a mere commercial rapprochement.
In December, Stéphane Richard, CEO of Orange, declared his flame to Canal + : "If Canal + was for sale, surely Orange would be interested," he said, during a trip to Morocco. Two months later, no marriage was concluded: "Canal + is not for sale," his mother, Vivendi, regularly says. This does not prevent the teams of the encrypted channel and the operator from having multiplied the discussions to see how they could strengthen their collaboration by imagining a form of rapprochement.
In an ideal world, each camp might lead its own boat, but both Vivendi and Orange are interested in joining forces today. The first because the revival of Canal + remains fragile. The second because it needs a Canal + in form to be able to propose to its subscribers a rich offer of audiovisual programs. Orange and Vivendi are facing an increasingly aggressive SFR in the purchase of content, which will force Canal + to spend more and Orange to resign itself to not being able to offer so much content to its customers.
Orange, ready to invest with Canal + in sports rights
And the situation is likely to worsen because after chipping the encrypted channel the rights of the prestigious Premier League football, the operator controlled by tycoon Patrick Drahi hopes to rise in sports rights and will begin to finance Series and films . And, if Canal + is weakened, Orange is likely to become less attractive, in the face of SFR, its main rival in telecoms in France.
The two groups know each other well: Orange is the first distributor of Canal + and both have enriched their partnership in the fall by offering Orange fiber subscribers a bunch of channels, "Famille by Canal". But now we have to go further. First, by helping Canal trade rebound, and then helping the channel to invest in its programs. "Today we have discussions with Canal + on sports tenders, to see how we could help them, including financially," reveals a source close to Orange.
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SFR puts the pressure
There is no time to lose: the TV rights of the Formula 1 and the Champions League, two competitions that diffuse Canal +, will be put back into play before the summer. Not to mention the Ligue 1 football, whose rights expire in 2019. SFR will certainly apply . "It is clear that we will continue to study all the sports rights available," said Michel Combes, CEO of Altice, the parent company of SFR, on Friday at a lunch with the Association of Media Journalists. "We are in the sport to build, not to make a round trip. "
No question, however, for Orange to help Canal + without being associated with creating value . Difficult therefore to be a simple minority shareholder of Canal or Vivendi. Unlikely, on the other hand, Vincent Bollor , who is trying to revive Vivendi as a major actor in the media since he took control of it, agrees to sell the entire Canal + to Orange.
Blocking points
To align the interests of the two groups, one of the avenues would be to create a new marketing company for Canal + in France. A company of which Orange would be the majority shareholder. At the same time, the two groups that are present in Poland as in Africa could imagine other collaborations.
If the framework of the discussions, more or less formal, is defined no capitalist schema would for the moment be stopped. More than the presidential election, which according to several actors of this file, would not prevent an alliance between the two groups, some points of potential blockages remain. Such a reconciliation would initially raise questions on a competitive level. The Autorité de la concurrence would require counterparties to ensure that Free, Bouygues and SFR have access to the content of Canal and Orange, which could lose some of its interest in such an alliance.
Vivendi could invite itself to the capital of Orange
Most notably, Orange as the shareholder state , do not seem to want an alliance with Vivendi to allow Vincent Bolloré to invite himself to the capital of the incumbent operator, which he could then seek to take control rampant. Paying an entry into the capital or a buy-back of Canal shares and cash would open the door of Orange to Vincent Bolloré who could thus acquire directly or indirectly shares of the operator.
Asked at the end of January when his wishes were expressed by his employees, who were worried about such a hypothesis, Stéphane Richard replied: "It is wrong to make the shortcut between the industrial interest that could be Canal + and the arrival of Vivendi in the capital or Vincent Bolloré. We can very well acquire Canal +, I say right away that it is not the project, by paying it in cash. "And to add, without mentioning a name:" I have some ideas on the typology of shareholders that could be brought to welcome within the capital of Orange. Some seem to me to fit into the values of the company more than others. ".
An agreement between Orange and Vivendi-Canal + does not appear to be imminent, but all parties are now familiar with the framework of discussions and the loss of certain major rights - such as F1 or others - may well lead to faster processing of this file.