Billion deal: debate about a fundamental question: does the DFL need an investor?

Billion deal: debate about a fundamental question: does the DFL need an investor?

The German Football League wants to generate fresh capital through an investor. The plan is controversial. The decision will be made on Wednesday.

The heated debate about an investor joining the German Football League is about to end.

The representatives of the 36 first and second division clubs will vote at an extraordinary general meeting in Frankfurt am Main from 11.30 a.m. on whether the DFL should work with a strategic partner in the future or not. The German Press Agency answers the most important questions about the planned billion-dollar deal.

What does the DFL expect from an investor?

Primarily fresh capital. According to the ideas of the DFL management, the deal should bring at least two billion euros into the coffers. In particular, the overall marketing of the Bundesliga, primarily abroad, is to be strengthened with the money. Germany lags far behind the competition from England, Spain and Italy.

A fixed amount is also earmarked to finance local infrastructure projects for the 36 first and second division clubs. In addition, the clubs are to receive around 300 million euros at their free disposal.

How is the deal supposed to go?

In order for the negotiations to start, a two-thirds majority – i.e. at least 24 clubs – must vote for it. With a corresponding vote, the national and international media rights would be outsourced to a subsidiary called “DFL MediaCo GmbH & Co. KGaA” in the next step.

The investor is then to acquire 12.5 percent of the new company for a term of 20 years.

Could the strategic partner also influence the design of the game schedule or even club politics in the future?

No – say the current DFL managing directors Axel Hellmann and Oliver Leki. “An investor will not have any influence on sovereign rights. This red line will not be crossed,” Hellmann affirmed in the run-up to the vote. And Leki asserted: “We are not selling any shares in the Bundesliga.”

However, critics assume that a possible partner will not be satisfied with the role of spectator. “A private equity investor will always demand certain co-determination rights in order to protect and actively increase the return on his investment.

A share of the income always means that the investor has a say, regardless of the contractual arrangement,” warned the board of directors of 1. FC Köln in an open letter.

Who are the candidates?

Of the original six applicants, only three remain: Advent, Blackstone and CVC. The trio are exclusively investment companies. CVC has already acquired stakes in Spain’s La Liga and France’s Ligue 1, giving it experience in the football business.

How is the mood in the clubs?

split. Some are opposed to investor entry, others are in favour, and a third camp has kept a low profile leading up to the vote. On the one hand, the critics warn against accessing future revenues that the clubs will lack in ten to 20 years and also complain about the self-imposed time pressure.

The proponents see the deal as an opportunity to compete more internationally with clubs from England, Spain and Italy.

What do the fans say about the plans?

In the past few weeks, many supporters at Bundesliga games have made it clear that they don’t believe in a possible entry by an investor. The clubs in the 3rd division also have major reservations. They fear a closed society in professional football in the future, because the gap between the second and third division teams will increase due to the additional income.

Source: Stern

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