DFL plan failed: no investor in the Bundesliga

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The planned billion-dollar deal for investors to enter the German Football League (DFL) has failed. The professional club assembly lacks the necessary majority for negotiations with potential donors.

Investors' entry into the Bundesliga is off the table for the time being

The German Football League (DFL) has had to give up its plan to generate fresh capital through an investor. At an extraordinary general meeting, the corresponding, already revised application did not receive the required two-thirds majority among the 36 first and second division clubs.

The voting result of eleven no votes and five abstentions means a clear defeat for the DFL leadership – and also a confirmation of the resistance from the football fan scene. A two-thirds majority would have required 24 out of 36 yes votes. At another meeting in early or mid-July, the selected donor should have been awarded the contract. However, the plan did not receive enough support at the Frankfurt meeting, which means the end of the project.

“For us, the derivation is that the process is over today. That is democracy,” commented DFL supervisory board chairman Hans-Joachim Watzke. “We set the hurdle ourselves. There was a clear majority, but not as we had imagined. As of today, the issue is over.”

The deal should bring in two billion euros

The planned deal should bring fresh capital of around two billion euros to the DFL. A large part of this should flow into strengthening the overall marketing of the Bundesliga, especially abroad. In addition, part of the money was intended to finance local infrastructure projects for the professional clubs, as well as a freely available sum of around 300 million euros.

The plan envisaged that the media rights, both national and international, be transferred to a subsidiary should be spun off. A potential investor should then acquire 12.5 percent of this company for a term of 20 years.

Long faces at the DFL managers: Axel Hellmann, Hans-Joachim Watzke and Oliver Leki (from left to right)

This model was not without risk. For the duration of the contract, the clubs would have had to forego 12.5 percent of their media revenues in favor of the investor. Even with moderate revenue growth (currently just under 1.3 billion per season from Germany and abroad), this would have resulted in a loss of well over three billion euros over a period of more than two decades.

Resistance of the fan scene and the clubs 

For the DFL leadership under the interim bosses Axel Hellmann and Oliver Leki, this start-up financing was “without alternative” to ensure the competitiveness of the league. In addition, the investments should ideally increase sales in such a way that, despite the taxes paid to the financier, a higher profit than before would have been achieved in the end. So the goal was a win-win deal. “I found absolute consensus that there is a need for investment,” said Hellmann, expressing his surprise at the result of the vote. “You can't say there's a need and then end the process. With every year that goes by, with every investment that other leagues make, it's getting harder and harder for us. Those who have been vocal against it now have to ask the question answer where security and stability for the Bundesliga will come from in the future.”

The skeptics, led by the club management of Bundesliga club 1. FC Köln and second division club FC St. Pauli, pointed out that the interests of the investor could conflict with those of the league in many areas. They advocated other ways of getting fresh capital. Anticipating future revenue was viewed by critics as the wrong approach, one that would actually harm professional football in the long run. 

Oke Göttlich, President of FC St. Pauli, believes that the clubs need more time

“The result and the controversial debates show that there was still a lot that needed to be clarified and that there were too many unanswered questions,” said St. Pauli President Oke Göttlich, who is also a member of the DFL Executive Committee. “It is of central importance to enable all clubs to understand the scope of such a deal. The previous approach has lacked the time and space for this. We must first develop a clear strategy, together and constructively – and then we can finance them in a targeted manner in order to achieve our clearly defined goals.”

Criticism from the fans

The opponents of the investor's entry were not swayed by the threat that was recently built up. Leki had warned that if the deal failed, the debate would begin about splitting off the Bundesliga from the rest and the associated end of “subsidies” for the smaller clubs.

Numerous fan groups were also among the critics, who have denounced the possible influence of a donor and the further consolidation of the sporting hierarchy. The rejection of the investor plan is a setback for DFL management, which had hoped for approval to improve the league's financial prospects. Now the DFL has to develop alternative strategies to achieve its goals.

og/sn (sid, dpa)