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Bundesliga clubs break off private equity investment talks

DFL had been looking to sell 25% stake in international broadcast rights business.

20 May 2021 Ed Dixon
  • Deal was expected to value Bundesliga’s overseas broadcast rights at €2bn
  • KKR, Bridgepoint and CVC were reportedly among private equity firms in running
  • DFL says talks have ended ‘for now’ but vows to work with clubs on ‘accelerating international marketing’

Clubs in German soccer’s top two divisions have opted to cease talks with private equity firms seeking to buy a stake in the German Football League’s (DFL) international broadcast rights business.

Earlier this month, Reuters reported the DFL, which oversees the Bundesliga and Bundesliga 2, had drawn up its shortlist of investors. KKR, Bridgepoint and CVC Capital were all purportedly in the running for a 25 per cent stake in the business, in a deal that was expected to value the Bundesliga’s overseas broadcast rights at roughly €2 billion (US$2.4 billion).

That would mean the proposed sale would have brought in approximately €500 million (US$610 million), which would have been a timely boost for German soccer clubs after a full season playing in stadiums unable to operate at 100 per cent capacity.

However, after clubs met on 19th May to vote on the minority shareholding, the DFL announced in a statement that talks would end ‘for now’.

The statement read: ‘In order to carefully assess the opportunities and risks of an investment in the interests of the 36 professional clubs, the DFL spent the last few months examining specific offers from private equity firms and presented them to the Extraordinary Members Assembly today.

‘Having weighed up the facts, the Bundesliga and Bundesliga 2 clubs decided not to continue the talks at the present time. Independent of this, there was agreement that it is essential that clubs and DFL work together on concepts for accelerating international marketing.’

Reports that the Bundesliga’s overseas media rights were attracting interest from private equity investors first emerged last November before the DFL confirmed in March that it was looking to create two new subsidiaries. A new MediaCo division would market the Bundesliga’s media rights overseas, while DigitalCo would be responsible for the DFL’s esports competitions.

The DFL said that the new MediaCo division would absorb the existing Bundesliga International unit and look to build out a new over-the-top (OTT) streaming platform.

Speaking to the Frankfurter Allgemeine newspaper in March, DFL chief executive Christian Seifert said that the proposal “essentially envisages a new company that will receive the licence to exploit international media rights and global marketing rights for 25 years”.

He added: “This underlines the solid long-term investment approach, which offers both clubs and investors security when entering and also when exiting. Private equity firms are usually partners on a temporary basis, and under our model an exit is possible after a few years without any problems.”

The DFL has given no indication of when, or if, talks with private equity suitors will be revisited. Investment bank Nomura had been charged with organising and guiding the initial bidding process.

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