Clubs from German soccer’s top two divisions have voted to withdraw from talks with private equity firms that were looking to take a 25 per cent stake in the international media rights.
The DFL, which oversees the top-tier Bundesliga and the second-tier 2.Bundesliga, said yesterday that at an extraordinary members meeting, the 36 clubs had rejected the proposals.
The withdrawal from talks comes at an advanced stage in proceedings, with the Bundesliga having drawn up a shortlist of four firms – CVC Capital Partners, Bridgepoint, Intermediate Capital Group and KKR – which were being assessed to take a stake in a new entity which would have managed the international rights, in a deal potentially lasting up to 25 years and worth around €500 million ($609 million).
The DFL said: “Having weighed up the facts, the Bundesliga and Bundesliga 2 clubs decided not to continue the talks at the present time. Independent of this, there was agreement that it is essential that clubs and DFL work together on concepts for accelerating international marketing.”
It had been reported that as many as 85 separate investment groups initially looked at the opportunity of taking a slice of the Bundesliga’s international rights, which were being valued throughout the process at close to €2 billion.
The UK's Financial Times newspaper has reported that the proposal was voted down because around two-thirds of the 36 clubs feel they are in a strong enough position financially to be secure without the injection of extra funds.
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Spectators are set to return to matches next season having been absent throughout the 2020-21 campaign as a result of coronavirus-related restrictions.
Japanese financial services company Nomura was advising the DFL on the proposed sale of the stake.
The DFL’s overseas rights revenue is expected to come to €230 million for the 2020-21 season, but hit €480 million by the 2029-30 campaign, calculated as a rise of 8 per cent each year.
The original proposal reported in March indicated that the DFL was seeking to create two new arms to market its rights – MediaCo and DigiCo.
Under the plans, Bundesliga International, the league’s existing worldwide commercial sales arm which has been marketing global rights since 2008, would have merged with the new MediaCo entity.
MediaCo would have marketed the Bundesliga’s international media rights and developed a new over-the-top streaming platform for the competition (the Bundesliga Pass concept was first mooted in 2019), while DigiCo would have marketed the rights to the DFL's esports tournaments.
Christian Seifert, chief executive of the DFL, who will step down next year, said in March: “The construction essentially envisages a new company that will receive the licence to exploit international media rights and global marketing rights for 25 years.
“This underlines the solid long-term investment approach, which offers both clubs and investors security when entering and also when exiting. Private equity firms are usually partners on a temporary basis, and under our model an exit is possible after a few years without any problems.”
However, the offers for private equity investment into the Bundesliga have now gone the same way as similar proposals for Italian soccer’s top-tier Serie A.
In November 2020, Serie A clubs voted unanimously for the creation of a media rights company in partnership with a consortium led by CVC only for the plan to hit obstacles.
A group of seven Serie A clubs performed a u-turn earlier this year and came out against the investment, which required the support of 14 of the 20 top-flight teams.
Under the agreement, CVC would have held 50 per cent of the consortium’s stake in the media business, Advent International 40 per cent and Italian state-backed fund FSI 10 per cent.
Meanwhile, it has been claimed that an in-house channel being considered by the LFP, the French professional league, would be priced at between €10 and €11 per month.
The figure is considered affordable as the league mulls an alternative to a new tender for available rights for the 2021-22 season onwards.
It is envisaged that the channel would offer live coverage of 80 per cent of Ligue 1 fixtures and all Ligue 2 games.
The LFP is seeking a long-term broadcasting solution after the collapse last December of a four-year, €820 million rights deal with Mediapro, the Spanish media company, for Ligue 1 and Ligue 2.
Canal Plus, the French pay-television broadcaster, agreed a short-term deal to show the eight Ligue 1 matches per week relinquished by Mediapro, on top of the two it already sub-licenses from counterpart BeIN Sports, in the 2020-21 season.
However, Canal Plus has indicated that it is not interested in retaining all 10 games per round for the next three years, while BeIN, which now focuses on Ligue 2, is also said to be reticent, albeit conversations have been taking place with the Qatar-based broadcaster in recent weeks.
It was reported that the LFP has also sought discussions with DAZN over a potential deal although the OTT subscription sports platform does not have a dedicated offering in France
It was reported that the LFP had also sought discussions with international OTT subscription sports platform DAZN over a potential deal.