Leila Abboud is a Bloomberg Gadfly columnist covering technology. She previously worked for Reuters and the Wall Street Journal.

Patrick Drahi doesn’t usually do half measures -- just look at the way he built Altice into a telecoms empire through more than 50 billion euros ($57 billion) of acquisitions in two years.

But his latest deal in French media looks just that.

On its own, Drahi's embryonic content strategy won't be enough to revive the performance of Altice's biggest unit, France's Numericable SFR -- unless the billionaire is prepared to spend much more on exclusive sports rights to really differentiate his pay-TV services from rivals.

Mobile Exodus
Since Numericable-SFR was created in late 2014 merger, it has lost mobile contract customers to rivals
Source: Arcep, company data, Jefferies estimates

Altice said on Wednesday that it would sell its stake in Next Radio TV, French newspaper Liberation as well as a string of magazines to Numericable-SFR for about 900 million euros ($1 billion).

To some extent, this is an exercise in house-cleaning. Altice is shifting to its biggest subsidiary a grab-bag of media assets it bought last year for about the same price it paid for them.

Telephone Television
BT and Telefonica are outspending Altice subsidiaries on TV content
Source: Company releases
Telefonica bought Spain's leading pay-TV provider Digital Plus. Numerricable-SFR bought NextTV.

But there is also a strategy behind it -- to make Numericable-SFR a major force in content in France, all with the aim of helping it sell more mobile and broadband packages and keep customers loyal therefore reducing marketing costs.

It's a convergence play inspired by BT Group, which spent 2 billion pounds ($2.9 billion) since 2012 snapping up exclusive rights to sports events like the English Premiere League and Champions League. That helped BT to fend off a challenge from Sky to its lucrative broadband business. After starting its sports channels in May 2013, revenue at BT's consumer unit rose 11 percent in two years and Ebitda rose 13 percent.

But expanding into pay-TV is still risky for telecoms carriers and can take time to pay off. Telefonica bought Digital Plus, Spain's leading pay-TV operator, for 750 million euros last year, and then spent 2.6 billion euros on soccer rights. That investment is yet to produce a sustainable rebound in revenue.

Meanwhile, Drahi's approach to content is a bit more muddled. Wednesday's deal at least gives Numericable-SFR the employees and a platform to produce TV content, and could evolve into something more ambitious. But Next TV's channels in TV and radio don’t really feature content that will really motivate people to choose Numericable-SFR over its competitors. That's where the exclusive sports content really helps even if it's expensive.

For Drahi, the problem is that Vivendi's Canal Plus and Qatar-backed BeIn Sport, have major sports rights tied up for the next few years. Those two are in the midst of seeking regulatory approval for a deal that would see Vivendi exclusively distribute BeIn Sport. Altice is pushing regulators hard to get the rights to distribute BeIN Sport to its own customers.

Numericable-SFR's own sporting assets are still modest by comparison: it has the English Premiere League, for which it pays 100 million euros annually over three years, as well as rights to some basketball, English rugby and handball matches. It's likely to bid in the next round of rights for the French rugby and German soccer leagues.

Nevertheless, Numericable-SFR said it will start five new sports channels and two new news channels. It will include them in its high-end triple play packages later this year and will charge consumers an additional 1 or 2 euros a month for the privilege. The price rise will apply to 6 million subscribers, and could generate as much as 288 million euros of additional revenue annually, a 2.6 percent increase.

Numericable-SFR hopes its sports plans will differentiate its bundles of TV, broadband and telephone services from those of Orange, Bouygues and Iliad. It's also betting they will stem the rate of customer defections -- which at 25 percent is higher than the 15 percent average of its competitors.

It's not clear the additional TV content will be enough of a lure for customers, but it may just be the beginning of a more ambitious plan. Even BT started with smaller batches of soccer rights before it went all in to spend billions on the Premier League. For now though Drahi, a renowned cost-cutter, may need to learn that playing in the big leagues of TV doesn't come cheap.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Leila Abboud in Paris at

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