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Investor in the DFL: Questions and answers about the Bundesliga billion-dollar deal


Highlights: Investor in the DFL: Questions and answers about the Bundesliga billion-dollar deal. As of: February 20, 2024, 7:05 p.m By: Stefan Schmid CommentsPressSplit Rejected by the fans, touted by the DFO as an opportunity with no alternative. The investor receives a share in MediaCo GmbH & Co. KGaA, through which the D FL's media and TV rights are run. There is currently only one possible investor in the race for a DFL stake.

As of: February 20, 2024, 7:05 p.m

By: Stefan Schmid




Rejected by the fans, touted by the DFL as an opportunity with no alternative.

The upcoming investor deal is polarizing.

These are the facts.

Frankfurt am Main – players, officials, coaches, fan representatives and TV commentators.

The list of those who comment in one direction or another on the impending entry of an investor into the DFL can still be expanded.

But what are the backgrounds?

How does the DFL want to use the money raised?

And what exactly are the reasons for the fan protests that seem to be getting people so heated?

Because these questions are so urgent, the DFL published a question and answer catalog before the vote in December.

But not everyone sees the relevant questions answered and taken seriously.

The fact that Martin Kind, of all people, played a leading role in the vote, which was successful from the DFL's perspective, further fueled the fans' protests.

What does the investor deal mean for the Bundesliga?

At the DFL general meeting on December 11, 2023, the necessary two-thirds of the 36 Bundesliga clubs gave the DFL management the mandate to negotiate an investor deal.

As can be seen from the DFL FAQ (as of February 18, 2024), “a sale of shares in the DFL ... is excluded.”

It should only be a “temporary minority investment by a partner over 20 years amounting to a maximum of eight percent of the license revenue from the exploitation of the DFL’s commercial rights”.

Specifically, this means: The investor receives a share in MediaCo GmbH & Co. KGaA, through which the DFL's media and TV rights are run, and their income.

DFL uses investor money for various purposes - only one candidate left in the race

In return for the maximum 20-year minority stake, the DFL ideally plans to generate revenue of one billion euros, which will be invested in the “further development of the DFL business model”.

Assuming the optimum of one billion euros, the DFL would use the money as follows: 600 million euros for the expansion of central marketing (including for the development of a streaming platform), 300 million euros directly to the clubs to cover shortfalls in TV funding compensate and 100 million euros for clubs that travel to other countries for advertising purposes.

There is currently only one possible investor in the race for the DFL stake.

After Blackstone announced that it was withdrawing from the negotiations, only CVC remained as a possible investor.

Following the logic of the market, the DFL is likely to be in a significantly worse negotiating position.

However, DFL managing director Steffen Merkel denied this; in his opinion, a sole negotiating partner would not represent a disadvantage.

The equity group CVC is probably the last remaining possible investor that the DFL could bring on board.

© IMAGO / Sven Simon

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Criticism of investors' entry into the DFL

The basic numbers alone give cause for criticism.

The 300 million euros to compensate for the loss of TV money over 20 years are only enough for three to four seasons, then there is a risk of losing business with the status quo.

In addition, internal financing, i.e. the 36 Bundesliga clubs paying for the 600 million euros to expand marketing through staggered taxes, was never put to the vote.

The DFL managing directors Marc Lenz and Steffen Merkel rejected this in advance, citing an alleged lack of a majority.

There is also criticism of the investor's uncertain length of stay in the contract.

The lender can resell his shares after a minimum holding period of “probably eight years”.

Although the DFL has “the right to make an initial offer for a repurchase” and there are exclusion criteria for a partner in the event of a resale, a less loved partner could still come on board.

It is considered unlikely that the DFL will be able to raise the financial resources for an adequate initial offer and the “fair value” after nine or 15 years, when a buyback would be contractually possible.

DFL managing directors Marc Lenz (left) and Steffen Merkel, who are supporting the investor deal.

© IMAGO / Nico Herbertz

How did the Bundesliga clubs vote on the investor deal?

The fans' criticisms go beyond the economic aspects.

The key points are the dubious communication and especially the vote on December 11th.

In the second vote on the investor deal, which was held in secret, the necessary two-thirds majority was achieved by a slim margin.

24 yes votes, two abstentions and ten no votes.

The second vote was necessary because only 20 yes votes were cast at the first DFL general meeting on the topic (May 24, 2023).

The two DFL managing directors Marc Lenz and Steffen Merkel then changed their approach.

Among other things, the volume of the proposed minority shareholding was reduced from 12.5 to a maximum of eight percent and communication was made more transparent - at least towards club representatives.

Modifications that were enough to achieve a two-thirds majority in December.

The DFL's question and answer catalog (as of February 18, 2024) states that voting took place in secret.

“Even when explicitly asked before the vote was held,” no club representative present raised any objections.

While the DFL FAQ does not mention which distribution of votes actually leads to the acceptance of the application, the picture became increasingly clear through club statements afterwards.

All representatives who voted no or abstained confirmed this directly or, as in the case of 1. FC Kaiserslautern, indirectly.

The voting behavior of the Bundesliga clubs towards the DFL investor

  • No votes

    : 1. FC Magdeburg, SC Freiburg, 1. FC Köln, Hertha BSC, FC St. Pauli, 1. FC Kaiserslautern, 1. FC Nürnberg, Fortuna Düsseldorf, 1. FC Union Berlin and Eintracht Braunschweig

  • Abstentions

    : VfL Osnabrück and FC Augsburg

Accordingly, all other clubs must have voted yes.

These included public supporters of investor entry such as FC Bayern Munich and Borussia Dortmund, but also Hannover 96, which was represented by managing director Martin Kind.

The voting behavior of Hanover managing director Martin Kind

And it is precisely because of his probable voting behavior that some of the fan anger is unleashed on Martin Kind.

The fans accuse the 96er manager - which is obvious given his well-known voting behavior - of disregarding the 50+1 rule.

The 50+1 rule anchored in the DFL statutes ensures that the parent clubs have the unrestricted right to give instructions and the majority of votes in the partially outsourced “football companies”.

This also applies if an investor, like Martin Kind, has more shares in the “football company”.

Only 49 percent are entitled to vote.

Hannover 96 club representatives revealed early on that they had instructed Martin Kind to vote no at the DFL general meeting.

On February 15th, this became even clearer through a statement from the association.

In addition, reference was made to further violations of the 50+1 rule by Kind, which the club had already reported to the DFL.

The DFL rejected the harsh criticism and allegations in the statement.

Hannover 96 fans attack managing director Martin Kind.

© Christian Charisius/dpa

Martin Kind becomes the target of fan criticism – DFL vote invalid?

The statement from the Hannover 96 club confirmed the assumption that had been circulating among fans for a long time.

Especially among active fans, whose choreos are only too happy to be used by streaming services in their trailers, the 50+1 rule is considered a valuable asset, which has now been actively undermined.

Personal attacks towards Martin Kind followed, especially from the Hanover fans.

However, even far away from the curves, Kind's behavior could lead to the investor's entry being aborted.

Since the voting behavior, assuming the child voted yes, came about in blatant contradiction to the DFL rule 50+1, the result should actually not count.

So far, the DFL has hidden behind the argument of secret voting, even if the exclusion process should make it crystal clear how Martin Kind voted.

He himself said on NDR Info: “Only I know how I voted.”

Given the questionable nature of the result, some clubs are now calling for a new vote.

VfB Stuttgart, 1. FC Köln, Borussia Mönchengladbach, SV Darmstadt 98 and Schalke 04 sent signals in this direction.

Criticism from fans is also directed against DFL communication

In addition to the fans' criticism of the outcome of the vote, this is also directed at the DFL and its unbelievable offers of talks.

On February 8th, the DFL invited fan representatives to a dialogue - probably in the hope that they would scale back their protests in the stadiums.

In a joint statement, the fan alliances criticized “baff – Alliance of Active Football Fans”, “F_in – Women in Football”, “FC PlayFair!”, “Queer Football Fan Clubs” and “ Unser Kurve e.

V.” the offer to talk: “It seems as if they (note: the DFL) want to wait out the conflict.

The current dialogue offer is not a rethink.

It's a fig leaf.

Because it contains no offer for negotiations.”

But the fans don't want to completely refuse to talk.

“If there are sensible proposals for talks, these protests will stop,” explained Jost Peter, board member of “ Unser Kurve e.

V.”, during a TV appearance.


Source: merkur

All sports articles on 2024-02-20

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