The DFL is hoping for two billion euros through the entry of an investor. To this end, the DFL wants to sell 12.5 percent of the shares in a subsidiary (MediaCo), which has yet to be founded, to which the media rights will be outsourced, to an investor (private equity company) over a period of 20 years. The DFL interim bosses Axel Hellmann and Oliver Leki announced these details of the planned business model on Thursday in Frankfurt/Main.
Of the two billion, 300 million euros are to go to the 36 first and second division clubs for free use. The DFL will receive 750 million euros to set up its own streaming platform. The rest of the income is earmarked for the clubs to invest in infrastructure.
Club representatives will decide whether to go ahead with the project at a meeting on May 24th. There are four serious investors to choose from, and a two-thirds majority among professional clubs is required for the deal to go through. At another meeting in early or mid-July, the selected investor should be given the go-ahead.
The business model has a catch: for the hoped-for two billion euros, the club would have 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 be significantly more than 3 billion over two decades – a loss-making business.
For the DFL leadership, the model is still “without alternative” to ensure the competitiveness of the Bundesliga. Financing via a loan is not the right way. “We cannot overrun the DFL with a billion-dollar loan,” said Leki: “The vast majority of clubs see the need for change.”
DFL: Further rounds of talks in May
In order to convince the undecided clubs, there will be further rounds of talks on May 12th and 15th. Leki hopes for a vote beyond the two-thirds mark at the meeting: “We must succeed in making it clearer. The league must be very united behind it.”
Since, according to Leki, nothing should be changed in the existing distribution key for income (“There must be no winners and losers”), the chances of broad approval are apparently very good, despite the critical voices from some quarters.
