Bundesliga in talks with Private Equity firms regarding the sale of its media rights
By Andreas Gossmann
Representatives of Germany’s football governing body “Deutsche Fussball Liga” (“DFL”) have met with a first set of buyout firms including CVC Capital Partners, KKR, EQT, Blackstone, and others in mid-September to discuss the launch of the sale of a stake in the Bundesliga’s media rights.
Given the increasing gap to wealthier football leagues, the DFL is looking for new ways to receive additional funds which would be allocated to the football clubs in order for them to be in a position to keep up with the bidding war for new players as well as to cover the increasing salaries of the players. Thus, their resistance to outside investors such as private equity firms is currently under review.
According to the Financial Times, one option is the creation of an entity that could control the media rights of the Bundesliga, which are valued at up to EUR 18bn. By selling a 25 percent stake to the private equity investors, Bundesliga could raise around EUR 4.5bn subject to the approval of the football clubs including Bayern Munich, RB Leipzig, Borussia Dortmund, etc.
A year ago, France’s Ligue 1 and Spain’s La Liga signed deals with the private equity firm CVC Capital Partners regarding the sale of media rights, while the member clubs of the Bundesliga were not open to pursuing such a sale.
Given the current structure with the club’s members controlling the different football clubs and the unpopularity of investors entering the football market in Germany, it will be interesting to see whether the DFL will go down the route of bringing in new investors such as private equity firms.
However, there is a clear opportunity for clubs to be more successful in the long term by using the new funds to invest in new players by matching the rising transfer prices to then attract a larger audience, which will in turn lead to an increase in the clubs’ revenue in the future.
According to Reuters, the DFL is expected to send out confidential information packages and collect the first tranche of non-binding offers in December. Nomura and Deutsche Bank are acting as advisors on the potential transaction.
The sale of the media rights will be subject to the approval of the commission of DFL’s top management, as well as representatives of the Bundesliga and Germany’s second-tier league. Then, the DFL will be seeking binding bids at the start of 2023 and will be selecting a winner before the end of the first quarter, according to Reuters.
This newsletter is fully independently produced by the members of the Nova Venture Capital and Private Equity Club. This club is run by students of the Nova School of Business and Economics.
You can directly access the sources we used:
Hübner, A., Barbaglia, P. & Gonzalez, A. (2022). Soccer: Germany’s DFL to kick off Bundesliga media rights sale in October. Available at: https://www.reuters.com/markets/europe/soccer-germanys-dfl-kick-off-bundesliga-media-rights-sale-october-sources-2022-09-16/
PitchBook. (2022). Bundesliga reopens talks with PE. Available at: https://pitchbook.com/newsletter/bundesliga-reopens-talks-with-pe
Noble, J. & Wiggins, K. (2022). German football reopens its door to private equity. Available at: https://www.ft.com/content/1a31cd50-1abe-4e3b-b5b7-a576d0639edc
Moore, C. (2022). Bundesliga in talks with private equity firms to sell media rights. Available at: https://worldsoccertalk.com/2022/10/01/bundesliga-in-talks-with-private-equity-firms-to-sell-media-rights/
Archysport. (2022). Bundesliga: DFL is holding preliminary talks with investors about media rights. Available at: https://www.archysport.com/2022/09/bundesliga-dfl-is-holding-preliminary-talks-with-investors-about-media-rights/
