The German Football League (DFL) hopes to raise two billion euros through the entry of an investor.
In return, the DFL wants to sell 12.5 per cent of the shares in a subsidiary yet to be founded (MediaCo), to which the media rights will be outsourced, to an investor (private equity company) over 20 years. These details of the planned business model were announced by DFL interim bosses Axel Hellmann and Oliver Leki in Frankfurt/Main on Thursday.
Of the two billion, 300 million euros are to go to the 36 first and second division clubs for free use. 750 million euros will go to the DFL to set up its own streaming platform. The rest of the revenue is earmarked for the clubs to invest in infrastructure.
The clubs’ representatives will decide at a meeting on 24 May whether the project will be realised. There are four serious investors to choose from, and a two-thirds majority among the professional clubs is required for the deal to go ahead. At a further meeting in early or mid-July, the green light will be given for the selected investor.
The business model has a catch: for the hoped-for two billion euros, the clubs would have to give up 12.5 per cent of their media revenues for the duration of the contract in favour of the investor. Even with moderate growth in revenues (currently just under 1.3 billion per season from home and abroad), this would be well over three billion over two decades – in other words, a loss-making business.
For the DFL leadership, the model is nevertheless “without alternative” in order to guarantee the competitiveness of the Bundesliga. Financing through a loan is not the right way. “We can’t overdraw the DFL with a billion-dollar loan,” said Leki: “The vast majority of clubs see the need for change.”
To convince the undecided clubs, there will be further rounds of talks on 12 and 15 May. Leki hopes for a vote beyond the two-thirds mark at the meeting: “We must succeed in making it clearer. The league has to be very united behind it.”
Since, according to Leki, nothing is to be changed in the existing revenue distribution key (“There must be no winners and losers”), the chances of broad approval are apparently very good, despite the critical voices from some quarters.
*** Translated with www.DeepL.com/Translator (free version) ***