DFL allows clubs to vote again on investors

As of: November 14, 2023 9:26 p.m.

DFL clubs will vote again on December 11 on whether to bring in an investor. The DFL wants to convince critical clubs with a simplified version of the agreement.

Chaled Nahar

The Presidium and the DFL Supervisory Board decided at a joint meeting on Tuesday (November 14, 2023) that the general meeting of the 36 Bundesliga and 2nd Bundesliga clubs in December will vote a “strategic marketing partnership” 11. The DFL confirmed this.

In the last attempt, on May 24, the necessary two-thirds majority was not found among the 36 clubs. At that time, 20 clubs voted in favor, eleven against and five abstained. Marc Lenz and Steffen Merkel, who have headed the umbrella organization since July 1, once again need a two-thirds majority of at least 24 votes to receive the mandate to close a deal with an investor. “The DFL’s business model must continue to develop to ensure a positive long-term future for the Bundesliga and the 2nd Bundesliga.”he said in a statement.

Marc Lenz (left) and Steffen Merkel, the two general directors of the DFL

Hope for a billion euros

According to Sportschau, the league plans approved by the sector giants FC Bayern and Borussia Dortmund still foresee the creation of a subsidiary. This is intended to commercialize the rights, including audiovisual media rights, the DFL’s main source of income. According to the new plan, the potential investor should receive between six and nine percent of the company’s income annually. As in May, the term is 20 years and there should be no permanent sale of shares. The sports program learned about this in club circles. In return, the DFL expects a payment of between 800 and one billion euros.

The attempt, which failed in May, involved a deal with a 12.5 percent profit share over 20 years. An investor would have to pay up to two billion euros for this.

A failed attempt in May divided the league

After the May vote, the league seemed divided: at the time only a third of the money was to go to projects that benefit the community. According to the then model, several hundred million euros would have gone directly to the clubs, although not in equal parts, but according to the current distribution key. After that, Bayern would receive a multiple of what, for example, Holstein Kiel would receive. Some clubs opposed this, as did the investor’s right to veto certain decisions, as Sportschau revealed.

Most of it for digitization the DFL, no longer for the day-to-day life of the clubs

Plans for the new agreement stipulate that around 60 percent of the money raised will go towards joint digitization projects, such as the development of a digital video platform. Around 30 percent is intended to offset payments due to the investor upon completion for at least five years. Otherwise, the clubs would initially be short of this money. The remaining 10 percent is intended to fill a fund with which the DFL wants to promote activities abroad, such as friendly club matches, to increase the hitherto relatively low foreign income.

The broadcast rights for all four seasons starting with the 2025/26 season are expected to be awarded in the first half of 2024. At least a slight drop in media revenue is expected. The participation of an investor is also considered a signal from the DFL of his willingness to explore new avenues. Recently, several media partners have publicly requested, for example, videos from the locker room or the team bus.

However, in May there was already a broad consensus among clubs on the need to invest in digitalization and internationalization and, therefore, in further development of the business model defended by the DFL. In its statement, the DFL addressed young people’s media use behavior as well as competition in new and expanded competitions, such as the 32-team FIFA Club World Cup and the expanded Champions League. In recent weeks, the DFL has also addressed criticism from previous opponents in talks with clubs, for example that hardly any money from potential investors is funneled into the clubs’ daily business.

First protests from the fans: “We are watching you”

The first weekend of November saw the first protests in the fan corners of numerous German professional football stadiums over the possible entry of a new investor, which could be a private equity company (holding). When the deal fell through in May, the company CVC, which participates in the most important leagues in Spain and France, but also participates in other sports such as Formula 1 and rugby, was considered the favorite.

A concern of many fans is that potential investors will exert influence. The DFL currently insists, as it did in May, that all decisions regarding the operation of the game remain within its competence. The investor should not be able to change the schedule or move matches abroad against the wishes of the clubs.

According to Sportschau, some clubs are also concerned about the new investment model, for example about the timing of the transaction in a phase of high inflation and rising interest rates. Some clubs should continue to prefer the option of borrowing for necessary investments. Above all, Borussia Dortmund CEO Hans-Joachim Watzke, head of the DFL supervisory board, has always spoken publicly in the past.

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