Examining the benefits and pitfalls of a new Bundesliga TV deal

The bidding war has officially started: In 2017, the Bundesliga’s current TV deal runs out and a new one will take its place. DFL boss Christian Seifert plans to have everyone’s signatures on the new contracts before this summer’s European Championships in France. What will change from the current system and what are the problems and opportunities?

Power, influence, money

The DFL’s target is as simple as it gets: Generate as much money as possible for the league and each club. In general, the idea is to get up to €1.5 billion to move closer to the much talked about Premier League deal and keep the league competitive internationally. All interested companies can currently register to submit their bids. While TV money is the biggest source of income for the Bundesliga, it remains a two-way street. In times of Netflix and Youtube, football is one of the few television crowd magnets left in Germany.

This is why so many companies are interested in the rights. Seifert knows: “We are giving away one of the ten most valuable media rights in the world.”

It is quite certain that the respective bidders reach the highest sums yet in German football history. ARD sport coordinator Axel Balkausky agrees on that assessment: “It will be the biggest battle one has ever experienced.”

Doubling the status quo?

Currently, TV money is responsible for €663 million (national) plus €154 million (international). These add up to over €800 million per year, a sum that is supposed to be nearly doubled.

About 80% of the current income is coming directly from Sky (4.3 million paying subscribers across the country), owned by Rupert Murdoch. Their idea was to keep showing “all games, all goals”. However, that is very unlikely at this point.

As the German cartel office is investigating the offered rights packages, it is safe to assume they will introduce a No-Single-Buyer rule, making it impossible for Sky to keep the exclusive rights. DFL officials were against such clauses from the beginning, but will have to deal with it in their endless pursuit of more bills and coins.

Who will take the second position next to Sky? Interest is there from plenty of companies. Aside from the public service broadcasting authorities, telecommunication enterprises such as Telekom and Vodafone have shown ambitions, as did Dieter Hahn (Constantin Medien/Sport 1), US investor John Malone (Discovery/Eurosport) and Amazon.

Consequences for the fans

Two providers means nothing good for the fans. Even if Sky has not always lived up to people’s expectations, having everything in one place is a lot more convenient than the current British model with Sky and BT. The bottom line is likely going to mean that football fans who want to see every game have to pay for at least two Pay-TV subscriptions.

“When you scream for competition, meaning a second provider, this can lead to the fact that you cannot view every game with one subscription.” – Christian Seifert

In 2017-18, the Bundesliga schedule will include five games on Monday to officially give Europa League teams a longer rest if necessary. Additionally, Sunday lunchtime kick-offs are possible as well. Aside from those two by supporter groups heavily criticised changes, the football weekend will look the same.

Not only the live broadcasting rights are being advertised. Germany’s traditional Saturday evening Sportschau in the ARD is in doubt once again, as RTL have shown themselves increasingly interested in producing an own highlight show. In the recent past, they already took over Germany’s World Cup and Euro qualification matches from their competitors.

Clubs argue

Bundesliga clubs are not agreeing on a way to move forward yet and probably never will as their interests and motivations are too different. Bayern Munich’s chairman Karl-Heinz Rummenigge talked to DFL and cartel office already, trying to improve the position of Germany’s market leader. On multiple occasions, Rummenigge criticised Sky‘s captive market. He would like more competition to maximize the amount of income which makes it possible to keep competing with Europe’s elite.

In the meantime, six traditional Bundesliga clubs have formed an interest group related to the money distribution aspect. Eintracht Frankfurt, Werder Bremen, Hamburger SV, VfB Stuttgart, 1. FC Köln and Hertha BSC have all banded together to reform TV money distribution.

Their issue with the current model is the non-existent third pillar in the sharing process. At the moment, 65% of the €800 mil are shared equally between all clubs, the other 35% are distributed with reference to a five-year points table.

The clubs’ idea is to introduce a third number, based on the actual market value of the clubs, as in their meaning for the Bundesliga. Important statistics for that pillar could be the following: fan base size, popularity, high profile, TV coverage range, social media interactions. Stuttgart’s president Bernd Wahler demands: “We need the third pillar.”

Germany is currently the only big league in Europe to not include a third way of TV money distribution based on marketing aspects.

What should we hope for?

It will be inevitable that the DFL and its clubs search for new ways to make more money. It is justified for them. The fans will feel the impracticability as soon as they will be asked to buy further products to watch the sport they love. To me, it is very doubtful how people will react to the new system. However, it is just as clear that the clubs will not care about it, as long as they get what they wanted all the way.

All of the suggested options have their pros and cons and we will have to wait until at least June to see what actually happens and how much football we still get to see when and how. At the end of the day, it is all business, but a certain amount of quality Free-TV coverage, as well as affordable Pay-TV, should always be guaranteed.

[su_label] Post editor: Ryan[/su_label]