French anti-trust authorities have rejected Canal Plus’ proposed sports right distribution deal with beIN Sports. The official decision was delivered today. The mooted Canal Plus-beIN deal, first announced in February this year, would have seen the pay TV giant gain exclusive distribution rights to beIN’s bouquet of sports rights for five years. The deal had been touted by Canal parent Vivendi as essential to stemming the tide of losses as high as €400 million in 2016 alone, according to Vivendi chairman Vincent Bollore. Bollore and his team have been lobbying for months now on the existential importance of the beIN tie-up, which would have cost Vivendi around €1.5 billion over five years as a minimum guarantee, and given Canal the exclusive right to distribute beIN Sports channels on its platform.

However, anti-trust authorities stated Thursday that the deal would have left 80% of sports broadcasting rights in the hands of Canal and beIN. With a number of new entrants expecting to enter the marketplace, including Numericable and SFR, that was a bridge too far for French officials.

Canal Plus execs had been pushing hard for the deal to give a much-needed revenue boost while also giving beIN Sports better carriage in France. The two companies had up until this point been competitors. By aggressively snapping up major soccer, tennis and rugby rights from 2012 onwards, beIN had positioned itself as a big rival to the French pay-TV giant, potentially even an existential one, as sliding Canal Plus subscriber numbers were behind an exec cull at the company last summer. By offering exclusive sports rights, Canal execs could have hoped to start building up its faltering subscriber base by giving it direct access to beIN’s 2.5 million subscribers.

Bollore has been forthright in his assessment of the consequences of the deal being blocked. In April he told the channel’s general assembly he was not above shutting down the company if a turnaround did not take place immediately.  “If the losses continue, there is a moment where you have to close the tap, because Vivendi will not bring money indefinitely to Canal Plus,” said Bolloré, with a bluntness as associated to him as it is uncharacteristic for the French business scene.

Canal Plus has, however, a chequered history with anti-trust authorities in France. In 2012, the anti-trust board suspended its approval of Canal Plus’ pay TV operator TPS and. In addition to fining Canal 30 million Euros, Canal Plus was banned from exclusively distributing premium channels such as beIN Sports for five years. That, in turn, led to beIN handling its own channels in 2012, and acquiring four of the five UEFA Champions League soccer packages,  exactly the same time that Canal began to suffer its calamitious losses. Canal execs had hoped that with the end of the ban approaching in 2017, they would have been able to revisit the exclusive arrangement with beIN. Thursday’s ruling, however, shows that is not the case.

For now, at least, it appears Bollore and his team will re-submit a modified proposal with beIN for consideration by the anti-trust next summer, in time for the rescinding of the current ban. One nuclear option remains for Bollore to shut Canal Plus altogether. That appears unlikely, at least for now and more a case of public posturing. However, it is an idea that has been thrown around French media circles for weeks now with growing readiness.

If Canal Plus were to shut down as a French channel, ironically it would not dramatically impact the long-term ambitions for Vivendi to become Europe’s leading content hub for film and TV. If anything, the move might free up Vivendi’s strategy to build a dominant OTT platform to rival Netflix across southern and western Europe in France, Germany, Spain, Italy and potentially the UK as well. What’s more, freed from the bureaucratic hurdles of French legislation, which precludes Canal from actually producing its own content, any future incarnation of Canal, when tied with StudioCanal – its successful film and TV distribution and production arm- t0 become a dynamic engine of content generation, ownership and exploitation.

A major caveat of any attempt to shut down Canal Plus would be its catastrophic impact on the French film biz. Canal Plus accounts for some 15% of France’s annual film production spend between $230m to $300m, repping a major pillar of the filmmaking community.