During a panel discussion, two powerful men from the DFL tried to allay fans’ fears of an investor getting involved. Doubts remained, also because a lot still remains vague – sometimes inevitably.
Time is of the essence, although this is a very long-term project. On May 24, a general meeting of the German Football League will decide whether an investor should be brought on board.
A few days later, sporting decisions will be made, and those in the 2nd Bundesliga and 3rd League in particular will have a direct impact on the process. At least two of the clubs that are still under the umbrella of the DFL will no longer be there because they have been relegated from the 2nd division, but at least two that have been promoted from the 3rd division will be. The newcomers would then – assuming at least a two-thirds majority among 36 clubs on May 24th – probably decide in July which private equity company to choose.
Why this rush when it is about an investment that should run for at least 20 years?
That was one of the many questions that were asked on Monday evening at a high-calibre panel discussion in Dortmund. Axel Hellmann, who was still Managing Director of the DFL until the end of the investor process, sat on the podium together with Hans-Joachim Watzke. Watzke is the chairman of the supervisory board of the DFL, but he mainly answered the questions as managing director of Borussia Dortmund, because the event was organized by the club’s fan department and the “Südtribüne Dortmund” alliance. Three representatives of the fan scene also sat on the podium, and several others mingled with the approximately 300 guests.
Dortmund’s fans are allergic to such transactions
Many Borussia Dortmund fans have an allergic reaction to transactions in which future proceeds are paid out early. That’s what the DFL’s planned deal is about. According to the current status, the investor should pay around two billion euros in one fell swoop so that he receives 12.5 percent of the proceeds from a DFL subsidiary for the future “20 to 22 years” (Hellmann), which sells the media rights as the most expensive product.
When Borussia Dortmund, which was already listed on the stock exchange at the time, got into financial difficulties at the beginning of the millennium, early payments were the norm for the management at the time. The club was saved from bankruptcy primarily by a US investment bank.
Watzke wants to take away the fear of “locusts”.
“Morgan Stanley was also a grasshopper. Let me remind you of that”, said Watzke to allay fears of private equity firms being dubbed the “locust.”
However, it is less the greed for high returns that deters fans than the fear that an investment company will exert influence and continue to change football.
No further fragmentation of matchdays
Hellman calmed down. There will be no further dismemberment of the game day nor games in Saudi Arabia. Watzke said: “I haven’t been fighting for 20 years to get 50+1 just to let a Trojan horse into the Bundesliga through the back door, which counteracts everything I’ve stood for up until now.”
The fans were less reassured because many other people are likely to lead the clubs and also the DFL over such a long period. They also complained that only a small group made such an important decision. They demanded that the members of the clubs should also debate and vote on it. Hellmann replied that the clubs send elected representatives to the DFL and that co-determination is thus satisfied.
The fans are still skeptical
There was a factual discussion in Dortmund for about two hours. Hellmann and Watzke explained that the DFL urgently needed the money in order to significantly increase revenues, especially on international markets, and that the clubs needed the money to offset the losses from the pandemic period.
The fans remained skeptical because Corona has shown that football clubs think very short-term and put the money at their disposal mainly in transfers and salaries.
Axel Hellmann, CEO of Eintracht Frankfurt with a past in the curve, agreed with him to a certain extent. He pleaded for the cost side to be given more attention and for the DFL to monitor it more closely. Hellmann spoke for one “Salary Cap” out, i.e. a capped salary budget.
phase of concrete negotiations is still to come
This has often been brought up without discussing concrete proposals. A lot remained vague, and that was the case on Monday evening in Dortmund. Hellmann asked for understanding. On the one hand, he could not reveal everything in order to have a better basis for negotiations with the four investors who were still in the running, on the other hand, the phase of concrete negotiations would not begin until after May 24th.
Until then, the critical clubs in the DFL should be convinced of Hellmann’s point of view: “I can’t find anything dramatic in an investor.”