Bundesliga before renaming – clubs versus DFL because of investor deal

The DFL failed miserably in May, but is now making a second attempt at getting investors. Against an opposition for which compromises are not enough.

Frankfurt – An external investor is supposed to pour fresh money into the coffers of the German Football League (DFL). To this end, managing directors Marc Lenz and Steffen Merkel are prepared to make compromises that they did not yet make at the first vote in May. This is not enough for some clubs in the 1st and 2nd Bundesliga; they are already publicly taking a stand against the entry of an investor.

The clubs are also concerned about their own wallets. If the DFL partnered with an external donor, the clubs would initially receive less money from marketing. Planned compensation payments by the DFL are viewed as insufficiently future-oriented.

DFL is looking for partners for marketing in the second attempt

The topic of investors is a polarizing one in German football. This is linked to the 50+1 rule for organized fans, which guarantees the parent clubs continued sovereignty even if external investors get involved. Softened by models like those in Wolfsburg, Leverkusen and Leipzig and, in the case of the third division club TSV 1860 Munich, repeatedly reduced to absurdity in a variety of ways, fans are fighting ever more loudly for the preservation of the rule that is so sacred to them.

The DFL’s plans envisage the entry of a partner into the marketing, which is far from a 50% participation, but which nevertheless causes a similar level of excitement. The league wants to sell eight percent to a strategic partner for a maximum term of 20 years. Part of this eight percent should include national and international marketing and media rights.

Investor entry into the Bundesliga? DFL needs a two-thirds majority

In order to enable investors to get involved, the league needs a two-thirds majority among its members, i.e. 24 of all first and second division teams. This was already up for vote at a meeting on May 24th; at that time, there was still 12.5 percent to be sold. The necessary majority was not achieved in the secret vote.

The no was made public by VfB Stuttgart, Schalke 04 and FC St. Pauli, among others. Bayern Munich, Borussia Dortmund and Eintracht Frankfurt were considered to be supporters of entry.

DFL compromises do not convince all clubs

Now the DFL has made improvements again and not only reduced the participation volume. With one of the Bild The DFL tried to refute criticism with leaked letters to the clubs to “protect sporting sovereignty”.

She assured the clubs that a possible investor would not have any influence on the competition mode, licensing or the number of league participants. Likewise, the design of the game plan and the scheduling of individual games remain in the hands of the DFL.

Will the Bundesliga get an investor? Vote on December 11th

It is questionable whether this will persuade the necessary shaky candidates among the clubs to say yes on December 11th. Two clubs, SC Freiburg and 1. FC Köln, have already made it public that they will continue to vote against an investor deal. St. Pauli and Fortuna from Düsseldorf are also expected to say no.

At the general meeting of both clubs there was a clear vote against making a DFL deal possible. Not a binding vote, but an order that the club representatives will probably take seriously.

Billion dollar deal initially robs clubs of money

If a two-thirds majority is found, the DFL plans to generate revenue of up to one billion euros. The majority of the money will be invested in building a platform for the league that will enable the digital distribution of content. The remaining 200 to 300 million should go to the clubs in order to close a financial gap.

By selling the marketing rights to an investor, it would initially no longer be selling the rights itself. The DFL is currently passing on part of the money generated through marketing to the clubs. In the future, this could remain with the new owner of the marketing rights, i.e. the investor.

Money for the DFL? Criticism from the clubs: “Not a brave and convenient solution”

This also brings us to a point of criticism from the clubs: The DFL gives up the marketing rights for up to 20 years, but the up to 300 million in income that is supposed to go to the clubs only compensates for the shortfall in income for four years.

Eckhard Sauren, Vice President of 1. FC Köln, addressed this point HE DOES in his criticism: “We consider the solution presented with the payment of compensation payments for investment-related shortfalls in income to be a rather courageous and convenient solution that simply postpones many problems for four years.”

DFL alternatives to the major investor deal called for

Opposite the Sports show Sauren criticized the DFL for “unfortunately still not sufficiently examining whether there are more sensible alternatives to a private equity investor.” But what are sensible alternatives? Because everyone is certain of one thing: the DFL needs more money to keep up internationally. Internal financing, i.e. financing by the clubs themselves, or borrowing as suggested by Freiburg and Cologne, is rejected by the DFL.

Which, according to information from the HE DOES with or without investor involvement is the prompt sale of the Bundesliga naming rights. This means that a name addition will soon adorn the logo of the highest German league. There is still speculation as to which name, whether that of an automobile manufacturer or a brewery, would best fit “Bundesliga”.

One thing is certain: the maximum amount that can be generated is a mid-double-digit million amount. Not to be compared with the income from a possible deal on marketing rights. (sch)