The French antitrust watchdog has rejected an alliance between Vivendi' SA's pay-TV Canal Plus and Qatar-controlled beIN Sports, dealing a major blow to the French media company.

Thursday's verdict is a setback for Vivendi, which has described the deal as an essential part of its strategy to stem losses at its struggling French pay TV channels which have been losing money for the last four years.

"This project to ally, of which we don't know everything, contained a risk of collusion in sports rights, as the two actors would have held 80% of sports right, and the football league was worried," antitrust chief Bruno Lasserre said.

The deal involved Canal Plus paying to distribute channels from the Qatari group exclusively for a number of years.

BeIN Sports entered the French market in 2012, spending millions of euros scooping up live sports rights including the UEFA Champions League and French Ligue 1 soccer games and quickly becoming a formidable competitor to Canal Plus.

Although the channel now counts more than 2.5 million subscribers in France, turning a profit has proved more difficult. Analysts at Natixis estimate the channel is losing between €250 million ($282 million) and €300 million a year, partly because it charges subscribers just €13 a month for expensively acquired sports content.

For Vivendi, a lot is at stake in returning Canal Plus to financial health. The pay-TV group is currently Vivendi's largest business, accounting for more than half of its sales, and is a key cornerstone of the group's plans to build a media empire focused on southern Europe.

"An agreement couldn't be found for concessions that would have limited competition risks," Mr. Lasserre said. "We preferred to say no."

A spokesman for Vivendi couldn't immediately be reached for comment.

Write to Nick Kostov at Nick.Kostov@wsj.com

(END) Dow Jones Newswires

June 09, 2016 11:05 ET (15:05 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
Vivendi (PK) (USOTC:VIVHY)
Historical Stock Chart
From Jun 2024 to Jul 2024 Click Here for more Vivendi (PK) Charts.
Vivendi (PK) (USOTC:VIVHY)
Historical Stock Chart
From Jul 2023 to Jul 2024 Click Here for more Vivendi (PK) Charts.