Dhe representatives of the Presidium and Supervisory Board of the German Football League (DFL) took the next step towards a revolution and on Tuesday discussed the offers of several private equity companies interested in investing billions in German club football. It was “unanimously decided that the process regarding a strategic partnership at league level will be continued and that the cornerstones of a partnership will be presented to the 36 professional clubs for decision at an extraordinary DFL general meeting on May 24, 2023,” as the DFL announced.
At first glance, it sounds as if the business will continue to be successful, especially since everyone actually agrees that the DFL’s business model needs to be developed further. Among other things, there should be its own streaming platform, via which the games and other Bundesliga content could initially be sold directly to the public on international markets and in a further step possibly in Germany.
The investor is to make more than two billion euros available in exchange for 12.5 percent of the income from national and international media marketing for a period of 20 to 30 years. These framework data can be the subject of further negotiations. For the time being, “criteria for the detailed evaluation and selection of a strategic partner were adopted in order to reduce the group of interested parties to three in a next step,” writes the league association.
How is the money used?
According to information from the FAZ, there can be no question of a harmonious process, because not all clubs are convinced of the procedure. At several Bundesliga locations, it can be heard that clubs do not feel well informed by the “Future Scenarios” working group, which designed the process together with Deutsche Bank and Bankhaus Nomura. On the one hand, the project is being pushed forward, but at the same time fundamental questions remain unresolved, without the answers to which it is impossible for many clubs to take a well-founded position on the project, say those involved.
DFL interim managing director Axel Hellmann, who is considered one of the main drivers of the project, was also viewed increasingly critically, because so far it has not been possible to give an answer to the main question that everyone is asking: How exactly will the money be used? Some officials believe that this must be clarified before the next steps follow and concrete negotiations are started with the investor.
In addition to the amount of just under one billion euros that is needed for the development of the streaming platform and some other internationalization projects, an even larger sum is to flow to the clubs. This is where interests diverge. Industry giants like FC Bayern, who play internationally and don’t need money to advance their infrastructure and digitization, want to put the funds into their team to remain successful in the Champions League.
And they demand a large proportion of the fresh funds with good arguments. But if the big ones get a lot and the small ones less, the national competition, which is already suffering from the enormous inequality of the 36 clubs, suffers. The business plan must therefore contain a coherent concept that makes the competition in the first and second Bundesliga so attractive that people in Germany and around the world buy even more Bundesliga content; For many of those responsible, the fact that Americans, Indians or Chinese would watch when big stars were lured in with fresh money is not enough as an answer.
Exactly such aspects are at stake when the DFL announces that “numerous suggestions have been taken up and detailed questions discussed” that “should be included in the overall concept”. A concept for a sensible distribution of money and a convincing business plan that brings in more money for the leagues than the investor keeps for himself are mentioned as the sticking points.
In two further information meetings, the clubs will now be presented with an updated concept, taking into account the many concerns, before a decision is made at an extraordinary general meeting on May 24th “whether, based on the concept and the selected indicative offers, entry into the next phase of the process and further Negotiations with individual interested parties should take place”, explained the DFL. In the end, at least two-thirds of the clubs have to agree.