DAZN and Sky with problems Bundesliga looks nervously at TV contract haggling
07/11/2023, 11:30 am
DAZN and Sky are still broadcasting the Bundesliga in Germany. But the preparations for the new TV rights sale have long been underway. This could mean losses for the Bundesliga. Bad example is Italy.
The Bundesliga’s most important source of income is worrying. While the preparation of the new TV contracts is already going on in the background, the two most important media partners are struggling with profitability and other problems. “We don’t find the simplest market environment for the tender, I don’t want to hide that at all,” says the new DFL managing director Steffen Merkel.
The sale of the media rights “is so important because the results of this tender are of course so incredibly far-reaching,” said Merkel. They “set the economic framework almost into the next decade”. That’s why the league managers are looking forward to the situation at DAZN and Sky, which are currently paying around 80 percent of the 4.4 billion euros that have been agreed for the four seasons up to 2024/25.
Preparations for the contracts from 2025 to 2029 are currently in full swing, and coordination with the Federal Cartel Office is particularly important. The actual auction is planned for the middle of next year, “before the European Championships,” says Merkel. The rights specialist is reluctant to make a forecast. But the DFL managing director says at least: “It’s not a realistic goal for us to achieve growth rates like in 2016, when we were able to increase by 85 percent.” Four years later, in the middle of the corona pandemic, there was a drop in TV revenue for the first time.
Own league TV channel as an alternative?
So the days of exuberant growth are over, and not just in the Bundesliga. “Word has now gotten around that other leagues are reaching their limits in their home markets, such as in Italy,” says Merkel, who forms the new DFL management board together with Marc Lenz.
Serie A is currently trying to sell the TV rights, but the offer from Sky, DAZN and Mediaset is said to be more than 30 percent below the current contract of 927.25 million, according to Italian media reports. Now it has to be renegotiated – or the league’s own TV channel must be founded. “It’s a realistic alternative,” said league boss Lorenzo Casini recently.
Sky and DAZN are also the contractual partners for pay TV in Germany. And both struggle with problems. The streaming service DAZN, which has been active in Germany since 2016, is still in the red. “We continue to work on being profitable,” said Germany boss Alice Mascia a few weeks ago at the SpoBis congress in Düsseldorf. “The money you invest in rights doesn’t come back quickly.” With several price increases and new price models, the global media company is trying to get into the black on the German market – so far in vain.
Red numbers at DAZN
It is not known whether the competitor Sky, which has been in deficit for decades, is currently in the black. The company is no longer public and does not have to publish any figures. However, the German subsidiary belonging to the US group Comcast is on an austerity course, has lost the competition for the Champions League and recently confirmed the end of the self-produced series and films. According to media reports, Sky Germany is to be sold, as is the Italian branch. The company does not want to comment “on speculation”.
Sports director Charly Classen is still optimistic and combative. “Sport is and will remain the heart of Sky,” he had recently emphasized several times. Classen said: “The tender of the DFL is absolutely important for us.” The Bundesliga is a “core right”.
How does it continue and end? The TV specialist Merkel, who for the first time was primarily responsible for organizing the sale of rights for the league after the departure of Christian Seifert, is observing the difficult market environment closely and is holding talks with the important TV companies. The DFL managing director says: “Some partners have had to make personnel, organizational and structural changes that we cannot fully foresee a year before the call for tenders.”
2023-07-11 21:42:36
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