Bundesliga seeks private equity investors for €1bn media rights deal

GERMAN professional football’s governing body is launching a third attempt to sell a stake in the league’s media rights worth as much as one billion euro (S$1.5 billion) to private equity investors, according to people familiar with the matter.

The 36 clubs in the top two divisions will vote in mid-December on whether to hold an auction, DFL Deutsche Fussball Liga said late on Tuesday (Nov 14), confirming an earlier report by Bloomberg News.

A previous proposal in May failed to win the necessary two thirds majority from the clubs. In that attempt, buyout firms CVC Capital Partners, Blackstone and Advent International were among suitors that bid as much as 1.85bn euros for a 12.5 per cent stake in the subsidiary housing Bundesliga broadcasting rights.

This time around, the league is likely to use a reverse auction, asking private equity firms how big a stake they would seek for an investment of up to one billion euro in the entity, people familiar with the matter said, declining to be identified because the information is private. They added such a stake will likely have to be below 10 per cent.

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A stake sale, if agreed on, would bolster the league’s finances as well as its visibility among viewers. The renewed effort will primarily be used by the league to boost revenues from broadcasting and marketing instead of “flooding the market with money,” the DFL said.

Using the proceeds to pay a special dividend to clubs, a feature of the last auction, is off the table this time around. The step addresses previous criticism from smaller, mainly second-league clubs that were concerned it would disproportionately benefit the bigger teams. The clubs will still receive financial compensation for giving up a small percentage of the broadcasting rights.

Source: The Business Times

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