- Why and the methodology behind DFL initiating its own television network
We've weathered the toughest times. The marketing of the football league internationally is doing well, but it's not as financially rewarding as the clubs and the Deutsche Fussball Liga (DFL) desire. Earnings from media rights sales outside the German-speaking area aren't meeting expectations. As a result, the league is planning to debut its own TV channel.
The DFL has declared its intention to boost its global presence further. DFL CEO Steffen Merkel stated, "Progress won't be a sprint, but at least a mid-distance dash. At least we've left the starting blocks." A crucial aspect of this strategy is the "establishment of an OTT market offering in international markets", as mentioned by the DFL. This refers to content streamed over the internet, particularly targeted at individual customers.
"A few challenging years"
Without a doubt, the Bundesliga has some catching up to do. It's still recovering from a decline in revenue, primarily due to the downfall of the Chinese market and expiring contracts in the Middle East. In 2021/22, international marketing brought in only 167 million euros. There was a lot of frustration among the clubs. "We've surely experienced a few challenging years," said DFL international marketing director Peer Naubert.
Despite this, revenues have risen to 214 million euros for the current season. However, this is still far from the anticipated revenues that former Bayern CEO Karl-Heinz Rummenigge mentioned at the "SpoBis" congress last year, with 800 million euros per season. Not only Stuttgart's marketing director Rouven Kasper agrees: "There's still a lot of room for improvement internationally."
The Premier League is far ahead
The domestic league is still way behind the English Premier League, which earns around 2.2 billion euros internationally. It's also substantially behind the Spanish La Liga, which brings in more than three times as much. According to Merkel, the aim is to "narrow the gap to La Liga in the medium term." Catching up to the Premier League is considered unachievable.
A prerequisite for launching its own TV channel has been in place for years. The DFL's subsidiary Sportcast already produces the footage that German viewers can see in "Sportschau" or on Sky and DAZN. Bundesliga International already produces pre-made shows. Since 2006, the DFL has also supplied ready-made previews for the world market. Meanwhile, the DFL also operates a conference in the US as "Goal Arena" on ESPN. This has been "a hit," according to international head Naubert.
Lack of investment capital
For its own offering, the league is currently missing only a platform to sell directly to customers without using existing broadcasters. "Fact is, we don't have the necessary investment capital for that," said DFL CEO Marc Lenz. This is due to the twice-failed investor process.
Therefore, a company already active in the market is expected to provide its internet-based platform in exchange for "a kind of revenue share", as Lenz explained. Rumor has it that the partner could be the Berlin-based company OneFootball, which several major football clubs, including Bayern Munich and Borussia Dortmund, as well as the German Football Association (DFB), have invested in - the DFL declined to comment on this.
Offer delayed
Even with its own TV offer in place, the league, according to Lenz, still intends to sell directly to foreign broadcasters. However, there are "media partners who no longer want to pay the rights fees that we deem appropriate." In such cases, the league could "offer its own product directly to consumers and fans on-site abroad," explained the CEO.
The same argument could also apply to the domestic market, for instance, if providers like Sky or DAZN are not willing to pay enough. However, Merkel and Lenz are not yet considering this. "Now is not the right time," Merkel told foreign journalists on the sidelines of the Super Cup.
For the time being, the focus is on expanding overseas. "We are confident that we will be able to present an OTT offer in a few weeks," Lenz said in mid-July. However, it's not happening as quickly as hoped. The project has been delayed to at least the end of September. Initially, the league planned to wait for the arbitration court's ruling in the dispute with DAZN over rights for the German market.
The DFL aims to enhance its global reach further by establishing an OTT market offering in international markets, as mentioned by its CEO Steffen Merkel. Despite the Bundesliga having a decline in revenue due to market downturns, the league is still behind its international rivals like the Premier League and La Liga in terms of international earnings.
