Fans in the Bundesliga are protesting against the entry of an investor in the DFL – the process will enter a decisive phase on Tuesday. Many questions are open.
Interested investors have until Monday (April 24, 2023) to submit their offers to the DFL. Six private equitycompanies (holding companies) have been encouraged to do so by the DFL: Advent, Blackstone, Bridgepoint, CVC, EQT and KKR. On Tuesday, the Executive Committee and the Supervisory Board of the DFL meet and, according to information from the sports show, discuss which offers are possible and how the possible proceeds can be distributed.
What is the DFL planning for the investor entry?
The DFL wants to set up a subsidiary and, among other things, bundle the TV rights there, which account for a large part of the income. The core of the DFL plan, which the 36 clubs would have to agree to with a two-thirds majority at a later general meeting, is as follows:
- A strategic partner pays the league two to three billion euros.
- For that he gets 20, 25 to 30 years 12.5 to 20 percent of the proceeds from the sale of the rights of this subsidiary.
- The goal: The proceeds increase overall and, in addition to the high one-off payment, there is a permanent profit for everyone.
What criticism is there of the project?
Eckard Sauren, board member at 1. FC Köln, criticized in the Süddeutsche Zeitung that the DFL wants to spend income from the future. “In the long run, a hundred-euro note becomes an 85-euro note. The one-off payment is offset by the 15 euros that will be lost for decades,” he told the Süddeutsche Zeitung, referring to the 15 percent that are for sale.
There are objections, especially from fan associations. Also with regard to the assertion made by the DFL that the investor did not have a great deal of co-determination, “the sovereign rights and tasks of the DFL are preserved”. An investor expects profit and for that he needs influence on decisions. “The informal power to exert influence would be enormous,” criticized the BVB fanzine schwatzgelb.de.
Oke Göttlich, President of FC St. Pauli, also expressed reservations. For FC St. Pauli, investing in the DFL is only up for debate if “when it is very, very, very clear what will happen to the money. And that it will not continue to be distributed unequally to the same extent as before – and thus destroy competition.”
What happens if the money is approved?
There are three pillars:
- Mainly digitization of the DFL: An online platform for the distribution of content is one topic, for example
- Infrastructure: The clubs should invest in their stadiums, youth academies and offices
- Sport: Here the clubs should be able to invest in new players to increase their attractiveness
While the first pot could benefit everyone and is also recognized as sensible by critics, questions remain unanswered when it comes to infrastructure and sport, especially for the smaller clubs: Does the distribution key apply as with the TV rights, which means that most of the money goes to Bavaria again Munich and Borussia Dortmund pushes? In which season do you have to be in the 2nd Bundesliga to be involved?
According to a report in the sports daily L’Équipe, the money was distributed in France in the classic pecking order: Paris Saint-Germain alone received 200 million euros, Olympique Marseille and Olympique Lyon each 90 million, four other clubs followed with 80 million.
What are the arguments for the deal?
Dortmund’s managing director Hans-Joachim Watzke said that Corona “should not be ignored”. “We at BVB alone lost 151 million euros during the pandemic,” said Watzke. Without the money of an investor, the Bundesliga could fall behind internationally.
The Premier League is currently ahead of all other leagues, the Bundesliga competes primarily with Spain, Italy and France. In these leagues, investments by investors are very much in vogue. This form of participation is called “private equity”. The Spanish league sold 8.25 percent of its TV rights over 50 years to the investor CVC for almost 2 billion euros. CVC also bought into the French Ligue 1 with 1.5 billion euros. Serie A is also looking to Wall Street for financial backing.
How is the mood among the clubs in the DFL?
The topic polarizes the DFL. This was shown most recently when he was elected to one of the positions on the supervisory board. Cologne’s managing director Christian Keller won this election against Bremen’s managing director Klaus Filbry – which was seen as a success for the opponents of the investor deal.
At the same time, representatives from the ranks of supporters are increasingly appearing in public. Dortmund’s managing director Hans-Joachim Watzke, who is also the head of the DFL supervisory board, together with Union Berlin’s president, Dirk Zingler, spoke out in the newspaper “Welt am Sonntag” for the entry of an investor. Darmstadt’s managing director Rüdiger Fritsch or Bochum’s managing director Ilja Kaenzig also expressed their approval.
When and how is the decision made?
Open, but probably before the summer break, a general meeting would be convened to vote on an investor. After a media report caused a stir at the DFL, according to which all 36 clubs had to agree, the league sent out a letter in which they explained the legal assessment that a two-thirds majority was sufficient.
What experience does German football have with investors?
The “Future Scenarios Working Group” in the DFL developed the proposal for the investor entry. It drives the investor scenario alone and is staffed by four people who are exclusively supporters of the entry: Jan-Christian Dreesen (FC Bayern Munich), Rüdiger Fritsch (SV Darmstadt 98) and the DFL managing directors Axel Hellmann (Eintracht Frankfurt). and Oliver Leki (Sport Club Freiburg).
The DFL had already tried a similar approach under managing director Christian Seifert. In May 2021, however, the general meeting decided “not to continue the talks for the time being”. Should the current project fail again in April, a third attempt would remain questionable for the time being.