How are you?

After an investor’s entry into German professional football failed in May, causing major upheaval, a second attempt is being made. On Monday, the heads of 36 first and second division clubs will meet in Frankfurt am Main to vote again on the deal with the lender.

How did this happen?

The presidium and supervisory board of the DFL by majority (not unanimously) decided that it was necessary to make a new attempt to find a donor. If the vote is positive, DFL’s two managing directors, Mark Lenz and Steffen Merkel, will be given the mandate to complete the deal.

What’s the new plan?

Six to nine percent of the shares of the DFL subsidiary, to which all media rights are transferred, will be sold for a period of 20 years. This should cost between 800 million and one billion euros. Ideally, 600 million will go to the central administration of the DFL to further develop the business model (digitization, streaming platform, etc.). According to the current distribution key, clubs will receive 300 million to compensate for the initial shortfall in media revenue. The remaining 100 million will be used to create a system of rewards for clubs traveling abroad for promotional purposes.

Who are the possible donors?

There are reportedly four interested parties from the so-called “private equity sector”. These are investment companies that specialize in types of investments. Assets under management in private equity worldwide amount to several trillion euros.

What’s the story?

The first attempt to attract an investor failed. At the time, the required two-thirds majority was missed. The plan called for the sale of 12.5 percent of the subsidiary’s shares over 20 years. Two billion euros need to be raised. The model was risky because even with moderate revenue growth (currently just under 1.3 billion per season), 12.5 percent over two decades would be significantly more than three billion – in short, a huge unprofitable business.

Why then did the deal fall through?

Many clubs did not agree with the distribution of money. “Only” 750 million of the two billion euros should be invested in central marketing and development of the streaming platform. The rest should go to the clubs through various pots. Opponents feared that the sporting balance of power would be further strengthened and that the financier would exert influence.

So what did the process look like?

Lenz and Merkel informed the clubs of the plans during several rounds of discussions. “Red lines” were drawn. Sovereign rights must not be ceded. There should be no “partner co-determination rights in relation to competitive play abroad, kick-off times or in the area of ​​game planning.” And: “After the expiration of the temporary minority shareholding, the licensing rights will automatically revert to DFL eV.”

What are the plan’s weaknesses?

The planned buffer of €300 million will compensate for the shortfall in revenue through interest payments to the investor over approximately three seasons. Income over this period must increase sharply – otherwise there is a risk of another unprofitable business, at least temporarily. The question also arises as to why the clubs cannot independently secure the required investment amount of 600 million euros. If the amount were invested over three years, it would amount to €200 million per year – an average of €5.55 million per club per year. It seems possible. Moreover, the money will not be collected at a time, but on the basis of a distribution key. Then the large ones will have to provide more, and the small ones less.

Why don’t the DFL bosses want this “internal funding”?

Merkel does not believe that this path can secure a majority. “Internal financing will mean significantly higher taxes from clubs in favor of the DFL,” Merkel said. “This will reduce the financial resources of all clubs, thereby limiting individual design options and ultimately possibly also reducing competitiveness.” Simply put, this means that budgets are so tight that they cannot afford to pay even small millions in taxes.

What are the fans saying?

The majority of organized fans are clearly against investor participation. The Our Curve fan group “completely rejects this attempt to attract investors to the DFL,” Jost Peter, the first chairman of Our Curve, told the German press agency. “On current calculations, the model is strengthening the top third of DFL leagues, while two thirds of clubs can expect only minimal improvements. Due to the already inequitable distribution of television money, small additional revenues eventually develop into increasingly distorted competition.”

How does it end?

This time things are better in terms of the required two-thirds majority, as the new plan does not involve any distribution of new money to clubs. There can be no criticism regarding the further strengthening of the balance of power. According to the kicker poll, voting is still open. Only twelve clubs announced their consent. 16 clubs did not provide any information, two clubs (Cologne, Freiburg) refused, and one club (Osnabrück) wished to abstain.

What happens if the deal falls through again?

If the deal fails in Monday’s vote due to second division clubs, there will have to be “serious thinking about the future management of the DFL”, Bayer Leverkusen managing director Fernando Carro told FAZ, creating a threat scenario ahead of the vote. He “would love” to have all 36 first and second division teams there, “but if interests become so divergent and we further jeopardize our global position – then we have to look ourselves in the eye and ask: can this continue together in Is this the form?

If you fail, you will waste valuable time competing with other major leagues. “They don’t sleep,” Carro explained. “We also have to be careful not to end up in a situation where the second division dictates what the DFL does.” (sid/dpa/ska)


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