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DFL investor deal: Critics and fans distrust the propagated “red lines”

Bundesliga Bundesliga investor deal

Critics and fans distrust the “red lines”

As of: 2:37 p.m. | Reading time: 5 minutes

The management of the German Football League would like to conclude the billion-dollar deal with an external investor by the end of March next year

Source: dpa/Frank Rumpenhorst

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The German Football League wants to conclude the billion-dollar contract with an investor in the first quarter of 2024. Several companies have expressed interest. The controversial decision raises many questions.

An investor is expected to help improve the marketing of the Bundesliga with up to one billion euros. The 36 first and second division clubs decided this with a two-thirds majority. It was a close vote, only the exact 24 clubs needed voted for it. In addition, there is still criticism. Above all, it is doubtful whether the German Football League (DFL) can actually defend itself from the investor’s influence in the 20-year cooperation.

WELT answers the most important questions about the investor deal.

With whom is the DFL negotiating a strategic marketing partnership?

A total of six companies expressed their interest and five submitted offers. The discussions are already underway and should now be intensified. According to Marc Lenz, one of the two managing directors of the DFL, all potential partners have accepted the guidelines set by the DFL. “We will discuss joint business planning within the key points in detail with the bidders and examine the desired added value of a partner,” said Lenz and announced: “We will continue the process with several interested parties.” According to ARD information, three offers are considered particularly promising . According to a BILD report, the DFL has received five offers from the investor giants CVC, Advent, EQT, Blackstone and Bridgepoint. Two offers amount to one billion euros each. A third offer is 950 million, the fourth 800 million. The fifth therefore did not meet the requirements.

What does the DFL plan to do with the money?

600 million euros are to flow into a package of various measures for digitalization and internationalization. These include, among other things, setting up our own streaming platform in order to create competition for bidders, especially abroad, expanding foreign marketing and legal protection against piracy. 100 million euros are earmarked for funding foreign trips for Bundesliga clubs. The remaining 300 million euros serve as reserves for paying off the investor shares in the first six to seven years. The investor entry is intended to prevent the Bundesliga from falling even further behind the English Premier League and the Spanish La Liga, especially when it comes to foreign marketing. The aim is also to prevent financially strong and internationally popular clubs such as Bayern Munich from opting out of solidarity marketing.

How high are the fees for a future investor?

It is envisaged that the 36 professional clubs will have to forego a maximum of eight percent of the income from media rights for 20 years upon conclusion of the contract. These will be reassigned next year for the 2025/26 to 2028/29 seasons. Steffen Merkel announced that new formats, offers and perspectives will be developed “in order to support our media partners even more in making the right offer for fans of all generations.” For the future, the DFL hopes for increasing revenues to offset the obligation to the investor. “We will be able to offer a significantly improved media product in 2024,” said Merkel. “We will go into the tender with confidence.”

How do the fans feel about the billion dollar deal?

The majority reject the entry of an investor. “Money is above everything. The uniqueness of German football is being thrown overboard in a hopeless rat race with the Premier League,” criticized the “Our Curve” alliance. Most supporters fear that the investor will exert intensive influence and thus distort competition. Above all, because so-called private equity investors are difficult to control over the intended cooperation period of 20 years. However, Merkel promised to handle the mandate she received from the General Assembly “very responsibly”. And Lenz assured: “There are red lines that will not be crossed.”

What do the “red lines” actually look like and how effective are they?

The DFL cites as examples the influence on match day organization, the mode and the kick-off times. In addition, there should be no debt for the league and “no flooding of the market with money”. It is contractually stipulated that the decision on the design of the schedule rests exclusively with the DFL. Individual games or competitions cannot be relocated abroad, as is done, for example, by the Spanish or Italian leagues, without the consent of the DFL. However, critics doubt whether this will remain the case even if clubs get into financial difficulties.

Which clubs voted against it?

From the Bundesliga, Cologne, Freiburg and Union voted against the investor entry. From the 2nd league it was St. Pauli, Braunschweig, Düsseldorf, Magdeburg, Nuremberg, Hertha and Kaiserslautern that rejected the application.

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There were also two abstentions from Osnabrück and Augsburg.

This would mean that Hanover boss Martin Kind would have voted yes. He had received instructions from the parent club to vote against the deal. It is not yet clear whether this could lead to a challenge to the result. “As managing director, Mr. Kind is initially authorized to represent the DFL at general meetings. As far as any internal instructions are concerned, if they exist, from our point of view that concerns the internal relationship of a club,” said DFL managing director Steffen Merkel.

Would there have been alternatives to the investor model?

Critics have, among other things, brought up so-called internal financing. Instead of opening itself up to investors, the league could have looked for a title sponsor. This would have eliminated the risk of influence from the outset. However, the traditionalists among the fans also resisted this marketing option.

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