The DFL (Deutsche Fussball Liga), the governing body of the 36 clubs comprising Germany’s top two professional divisions, announced the winners of the bidding for the domestic television rights for Bundesliga and Bundesliga 2 matches. The winners, newcomer Eurosport and current licensee Sky Germany, will create revenues of over 4.64 billion euros for Germany’s top two divisions over the four-year contract, which begins with the 2017/2018 season. Sky won six of the eight broadcasting packages up for bid, while Deutsche Telekom was shut out.
The new deal will put the Bundesliga second only to the English Premier League in the amount of monies received from domestic TV, and represents an 85% increase in revenue from the previous Sky-only contract, which began with the 2013/2014 season and ends after the upcoming campaign, paying 2.52 million euros. The new contracts also mark the first time that the Bundesliga will surpass the one billion euro mark (1.16 billion) per season for TV rights in Germany.
Eurosport will hold the rights to exclusively broadcast 43 Bundesliga matches a season in Germany, featuring mostly Friday night and the new Monday night matches, the DFL SuperCup and the promotion/relegation playoff matches. Sky, meanwhile, will air live the other 93% of league matches, including for the first time the rights to all of Bundesliga 2 contests. Despite Sky paying 80% more for TV rights than it did in the last contract with the DFL, its stock shares immediately increased by 4% after the announcement was made.
Sky also has a deep relationship with Discovery, the owners of Eurosport. A German court recently ruled that two entities should carry Bundesliga matches, not just one, and thus the awarding of rights to Sky and Eurosport.
Analyst Tom Singlehurst of CITI commented
Our conclusion is that the landscape is, remarkably perhaps, broadly unchanged. It is also noteworthy that none of the ‘big beasts’ investors might have worried about – incumbent telecoms companies like Deutsche Telekom or online companies like Amazon – have bought rights. Eurosport/Discovery is a new competitor but one that is likely to be less disruptive to the pay TV ecosystem.
The Bundesliga is in the second year of a foreign rights deal with FOX, which licenses matches for broadcast in North and South America and parts of Asia and Europe. That deal, though a big increase from previous foreign TV rights contracts, still is a fraction (1/8th to be exact) of what the EPL currently earns in foreign TV revenue, and the Bundesliga’s new agreement with Sky and Eurosport provides much less revenue than the EPL derives from its domestic contract. The DFL’s new domestic contracts, however, do exceed the amount just agreed upon for La Liga domestic TV rights, which will bring Spanish clubs 2.65 billion euros.
DFL CEO Christian Siefert noted
The result of the tender is an important step in light of the future viability of top-level German football. The Bundesliga now has established the best foundation for belonging to the three strongest football leagues in the world in terms of revenues, and will accordingly be able to present top-level sports at the highest level
Michael Schade, Bayer Leverkusen CEO, described the new TV deal as “outstanding, exceeding all our expectations.” Bayern Munich’s chairman, Karl-Heinz Rummenigge, added that “it’s an excellent, I’d even say an outstanding result. My wishes have come true. The top clubs are internationally under great pressure. That’s why it’s important that the income grows. It will help us to stay alive in international competitions.”
Additionally, Reuters reports that “German public-service broadcaster ZDF also won some live rights. Fellow public broadcast group ARD kept the rights to be the first to broadcast highlights of games, securing the future of its flagship “Sportschau” Saturday night show.
Amazon.com Inc (AMZN.O) dipped its toe into the German soccer world for the first time, winning the audio rights for Internet and mobile in Germany. Britain’s Perform Group, an online sports specialist, secured a highlights package for streaming.”
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