Dhe deal worth billions fell through: the controversial investor entry into the German Football League (DFL) failed due to massive resistance from its own ranks. At the meeting of the 36 professional clubs on Wednesday in Frankfurt/Main, the two-thirds majority required to start negotiations with potential donors was missed. This was stated by the meeting participants after the end of the meeting.
The skeptics about the club management of 1. FC Köln and FC St. Pauli have thus prevailed. The critics, which also include numerous fan groups, had denounced the possible influence of a donor and the further cementing of the sporting balance of power. Details of the planned agreement that have recently become known suggested exactly that.
The failed plan looked like this: An investor should have acquired 12.5 percent of the shares in a DFL subsidiary, to which all media rights would have been outsourced, over 20 years. The league hoped for proceeds of two billion euros from the sale. At another meeting in early or mid-July, the selected donor should have been awarded the contract.
model not without risk
The capital should primarily be put into the central marketing of the media rights and the development of a streaming platform. 750 million euros were earmarked for digitization. It should provide the basis for a successful global marketing of the league. 300 million euros should go to the clubs for free use (according to the distribution key currently in force). The rest of the money would have been earmarked for clubs to invest in infrastructure.
The model was not without risk. For the two billion euros, the clubs would have had to forego 12.5 percent of their media revenues in favor of the investor for the duration of the contract. Even with moderate growth in revenue (currently just under 1.3 billion per season from home and abroad), that would have been significantly more than 3 billion over two decades – a loss-making business.
For the DFL leadership around the interim bosses Axel Hellmann and Oliver Leki, the start-up financing was “without alternative” to ensure the competitiveness of the league. In addition, in the best-case scenario, sales should be increased through the investments in such a way that, despite the payments to the financier, there would have been a higher profit than before. So the goal was a win-win deal.
The skeptics saw it differently. They pointed out that the interests of the investor could conflict with those of the league in many areas. They plead for other ways to get fresh money. The anticipation of future income was the wrong way for the critics, which would even have harmed professional football in the long term.
The opponents of the investor’s entry were not even changed their minds by the threat that was recently set up. Leki had warned that if the deal fell through, debate would begin about splitting the Bundesliga off from the rest and bringing the ‘subsidies’ to the smaller clubs to an end.