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- DFL’s previous proposal to bring in private investment was rejected by clubs back in May
- Funds raised would be used for digitisation projects and enhanced marketing
The German Football League (DFL) is preparing a new attempt to sell a stake in the Bundesliga’s media rights business to private equity investors, with a possible deal to be reportedly worth as much as €1 billion (US$1.08 billion).
The DFL said it plans to hold a vote for all 36 clubs in the country’s top two divisions in December, asking whether an auction should be staged for the right to invest in the Bundesliga’s media rights unit. A deal could potentially be finalised as soon as next April, ahead of the league’s rights sale process for the next cycle between 2025 and 2029.
This marks the Bundesliga’s latest attempt to bring in private equity investment. A previous proposal to sell a reported 12.5 per cent stake in its media rights subsidiary was rejected by teams in May, with bids from firms such as CVC Capital Partners, Advent International and Blackstone thought to be worth as much as €1.85 billion (US$2 billion), according to Bloomberg. The issue has proved a thorny one, Donata Hopfen resigned as DFL chief executive in December last year after her attempt to bring in outside investment hit the buffers.
German outlet Sportchau reports that DFL plans to sell a stake worth between six to nine per cent in the media rights business for a 20-year period. It would in return gain a payment of between €800 million (US$868.2 million) and €1 billion (US$1.08 billion) from investors.
Meanwhile Bloomberg adds that a reverse auction is likely to take place, with interested private equity firms to be asked how large a stake they would be willing to pay up to €1 billion (US$1.08 billion) for in the entity.
The DFL’s new plan involves distributing 60 per cent of the money raised to joint digitalisation projects, including the creation of a digital video platform, according to Sportchau. The outlet adds that 30 per cent of revenue will be put aside to offset payments due to the investor after completion for at least five years.
It is said that the remaining ten per cent will be put into a pot the DFL will use to promote the league internationally, such as staging club friendly matches to raise revenue from overseas sources.
A previous proposal put forward by the DFL set out one provision that set out how special payments would be made directly to clubs, with the amount for each team determined by a model.
According to Bloomberg, this is now thought to be off the table, given it was one of the clauses some clubs were opposed to. Teams are however still in line to receive money for giving up a small proportion of the broadcast rights.
In its statement, the DFL added that the majority of funds raised would be used to increase ‘long-term revenues from central marketing’, while denying it would result in selling shares in the organisation itself.
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