There’s been a fair amount of hand-wringing in France this week over Canal Plus’ loss of the rights to Ligue 1 soccer to Spain’s Chinese-backed Mediapro for the 2020-2024 seasons. Why? Because Canal Plus has traditionally been the biggest financier of local cinema under an obligation it has to invest 12.5% of its annual revenues into pre-buying French and European movies. With football a key element for the pay-TV company’s subscribers, the fear is that a loss of key football rights will result in a loss of subs, which will then result in lower revenues and thus lower investment. But while Canal has been riding choppy waters for a while, and while the industry needs reform in general, is this all just a storm in a TV cup?

One French industry source told me this week that Canal parent Vivendi’s chief Vincent Bolloré may have wanted the bidding to go this way. Canal has been the home of Ligue 1 football since its creation in 1984, but the bidding escalated wildly in this round. Canal’s Chairman of the Managing Board Maxime Saada told Europe 1, “I’m disappointed not to have won the rights. But at these prices, it’s completely unreasonable. It was impossible for us to wager such sums and I think it’s impossible for anyone.”

Enders’ Analysis François Godard agrees, “They were right to not be bulldozed into overbidding,” he told Deadline.

It also remains unclear if Mediapro will be able to make its play work. Saada noted, “I estimate Mediapro paid between €800M-850M for the rights they acquired. To turn a profit on that, you need about 7M subscribers at €15 a month. BeIn Sports has been around for six years and they have about 3.5M, even though they have rights to the World Cup, the European Cup, basketball… People are asking a lot of questions about Canal’s survival. I question the survival of Mediapro because I’m sure Canal Plus will survive.”

This isn’t the first sports blow for Canal of late. It has faced increasing competition from other players like BeIn and Altice.

Industry insiders say it’s too early to tell what will happen. Wild Bunch co-founder Vincent Maraval tells me, “We have to wait to see the consequences of the manouver. What will the political response be? Will they renegotiate their obligation?”

Another source says Canal “may end up striking a deal with Mediapro to broadcast some of the games. Mediapro does not have a channel yet and if it does it will have to strike a deal with numerous operators, including Canal, to make sure the channel is distributed – so who knows how it will end?”

Godard adds, “Mediapro is making a one-way bet: They don’t have to pay the league anything until 2020. If they manage to sign up Canal Plus, Orange or SFR and the maths add up, they will make money. If they don’t, they can withdraw like they have just done in Italy, by failing to produce the bank guarantees required by their contract. My expectation is that Mediapro will never pay the league the money they promised.”

He suggests the industry takes a deep breath. “This Spanish company, which is in the process of being sold to Chinese investors,” a deal which has not closed, he notes, and “without any track record in the football and pay-TV field, has made multi-year commitments of about €10B to the Italian and French leagues. The leagues are so addicted to inflation that they will accept IOUs blindly.”

Godard allows that Canal “is deep in the moving sands, but whatever actually happens in 2020, the bad news of this week will weaken them further in consumer appreciation for the next two years. It is an opportunity to seek a complete review of their regulatory framework.”

In April 2016, Bolloré told Canal’s general assembly he was not above shutting down the company if a turnaround did not take place immediately. Its fortunes had suffered due to increased competition in the lucrative sports-rights sphere, losing subscribers and undergoing executive shifts. Although in early 2017, it was thought the company was moving in a more positive direction, sorting out bundling and subscription sales to put it in a better position.

In February this year, the Canal Plus Group said it was reorganizing itself around three axes: France (pay and free TV), international (TV outside France) and cinema (Studiocanal and French/European film acquisitions).

Amid the current situation, one industry source suggests Canal may be forced to invest more in premium original content including films and series to maintain its competitiveness with other globalized providers of content. This person cautions, “I do not see how they can survive and spend less and less on content and leave football completely aside.”

The source continues, “I think that most players in the industry have been anticipating this and started changing the way they have been producing content. I do not see one player taking Canal’s place, but the place being taken by numerous smaller entities offering a variety of different solutions.”

Canal would be expected to continue its investment obligations even if the percentage changes. It gets a bone from the government owing to its investments and benefits from a special 10-month window after theatrical to put movies onto its channel. That’s far more attractive than what other players receive, even though they too make investments. And, it beats the current hotly-debated 36-month window that Netflix has to abide by. The entire windows system is still under review.

Maraval, in his typically forthright way, perhaps summed it up best this week. He wrote on Twitter, “French cinema, which has given itself body and soul to Canal Plus and forgotten to reform (private financing, media chronology) is collapsing. What a joyous band of visionaries.”