May 29, 2017

Dear Bundesliga, Just Say NO (to the EPL Model)

Normally I don’t pay much attention to “talking heads” on bigtime sports talk shows.  Generally, I see them existing to create the controversy to boost ratings and ad revenues, and also generally they too often know less about the teams and individuals that they fulminate about than local writers, broadcasters and fans.  I’d rather actually watch matches than watch people talking about them.

But Craig Burley’s Boiling Point video on ESPN FC caught my attention Tuesday morning.  Burley s topic was the huge domestic TV deal that the English Premier League hads just announced with Sky and BT, a deal that will create 8 billion in revenues through 2019, and the way other leagues’ are getting their “knickers in a twist” because of the EPL’s amazing new TV contract in the UK.

Burnley in particular (after dismissing the Scottish Premier League) cited a banner seen at the Allianz Arena Saturday stating “This ain’t no English league.”  His reply went pretty much like this… “You’re damn right it’s not.  I know everything’s not right in England, fans pay too much, ticket prices, I get that, I know more has to be done for the fans.  But what gall those Germans got, when Bayern Munich have just trounced Hamburg 8-0” … He then went on to Bayern’s penchant for signing their opposition’s best players and finished with  “Yet they’re worried about what’s going on in the Premier League, have you ever heard that saying, get your own house in order……. (Ok, i can’t resist, how exactly would the EPL do more for fans…. lower the price of prawn sandwiches at the concession stand?  Provide free parking for Rolls-Royces and Bentleys?  Offer more varieties of champagne?)

Normally I would dismiss all this as just more sports TV ranting and posturing, but along with the video, ESPN FC in the same piece from the Associated Press quoted some of the top executives associated with the Bundesliga in the aftermath of the EPL’s big TV deal.  (The current Bundesliga deal for domestic TV brings in about a fourth the revenue of what the new EPL deal will furnish, and ends after next season)..Concerning the wide gap in domestic TV revenues, DFL CEO Christian Seifert stated that” we need an honest discussion in the league: Are we ready, looking at the new television contract, to take unpopular measures, if necessary, to be able to keep the best players in the world in the Bundesliga?” while Gladbach Sporting Director Max Eberl mentioned that “traditions may have to be broken” to stay competitive financially.  Finally, Sporting Director Klaus Allofs of 2nd place Wolfsburg added that in future league discussion  “there are no taboo subjects” to stay competitive financially “but there will have to be compromises.”

What seems to be the point of concern in the remarks of the Bundesliga’s executives is the league’s matchday schedule, which is not as staggered as that of the English game, and the monthly German winter break, wherein Bundesliga clubs get some time off for the holidays before training for the second half of the season, a tradition that directly contrasts the EPL’s crowded holiday match schedule.  A matchday schedule more in line with the EPL’s has been tried before by the Bundesliga and found wanting by German fans, who find the 3:30 pm match kickoff time in Germany inviolable — that apparently was what the “This ain’t no English league” banner referred to.  Again, according to the article, “Pro Fans, an umbrella group of supporters, has written an open letter to the league demanding the elimination of Friday matches and rejecting any more staggering of the schedule.”  But it seems the issue will be under scrutiny by league officials again, as unpopular despite German fans’ disdain.

Are Bundesliga executives overreacting to the huge new EPL TV contract?  Yes.

It is probably an understandable initial reaction — wow, the EPL inked this astronomical domestic TV deal, how are we to compete?  But the answers are already there.

The 2015 Bundesliga Report that I recently received in the mail is a well-done 48 page book that highlights the finances of the league (including Bundesliga 2). It glowingly reports the growth in revenues by the 36 professional clubs that comprise the DFL (the governing body of the top two flights on German football), which reached a new high in 2013/2014 as the 36 clubs generated 2.9 billion euros, a figure that keeps increasing year after year.  The average attendance per match for Bundesliga fixtures last year was 42,609, almost 6,000 more per match than EPL contests during the same period (the EPL being second-ranked in attendance),and the second highest in league history, while Bundeliga 2 was seventh in Europe in average attendance (17,853).  According to Liam Smith’s article on the Bundesliga Business Model, the average ticket price in the last Bundesliga season was €23, and “a Bayern Munich season ticket can be bought for as little as €135.”  Despite the reasonable ticket prices, 13 of the 18 clubs in the German first division showed a surplus last season, while, according to Smith, in 2012/2013 17 of the 20 EPL clubs were in the red, with Chelsea alone carrying a debt of £958 million !!!

The EPL’s new domestic deal IS mindboggling, but the Bundesliga isn’t going to get a similarly sized domestic deal in Germany in 2017  by simply changing the kickoff times of league matches, or by shortening (or eliminating) the winter break, anyway.  Generally, new contracts start from the basis of the last contract, so there’s no way the Bundesliga is going to pull anywhere near to equality with the EPL’s UK TV deal anytime soon — the difference is too vast.  So why change things that would alienate at least some Bundesliga fans (in the case of match starting times, and bad German weather during the holidays). So why bother to imitate?

Instead, it would wiser for the Bundesliga to work to its strengths.  The league is very financially healthy, with revenues having grown by one billion euros within seven years, bolstered by the Bundesliga’s outstanding ability to attract corporate and commercial sponsorships.  The emphasis on cost reductions, too, bolsters the league’s bottom line — for example, the Bundesliga clubs’ average cost for players in down to 36% relative to revenues,  a gigantic plus for the Bundesliga as compared to the European average of player costs being 65% of revenues.

The astonishing success of the mandatory Bundesliga clubs’ academy programs are partially responsible for this.  Simply put, young, talented but unproven players earn less than established, talented, older players, generally a fact of life in all professional sports.  Indeed, the academy approach has been so successful at producing talent in numbers that all but two players (elder statesmen Miro Klose and Roman Weidenfeller) on Germany’s World Champion national team were once academy kids, and many of those players are still so young that the German national teams’ outlook for the 2016 Euros and the 2018 World Cup should be as bright as any nation’s.  Bundesliga clubs don’t necessarily have to compete so hard and spend so much in the transfer windows to find talent — the academies, heavily financed by the 36 clubs, produce a great deal of it for them.

There are ways for the Bundesliga to increase revenues, too, such as further raising the league’s profile and creating greater awareness in foreign nations, as evidenced by the increased trend of Bundesliga clubs to tour overseas and the DFL’s much-increased commitment to court foreign fans.  And the Bundesliga does need to get its house in order regarding a much important issue than match starting times  — that of the continued attack by some of the league’s leaders on the 50+1 rule that is to many a crucial factor in differentiating German football culture from the EPL and other leagues worldwide, and a major reason for the Bundesliga’s success..

So, for now and forever, the best thing Bundesliga leadership can do is just say NO to the EPL model.

 

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Gerry Wittmann

Gerry is the founder of the Bundesliga Fanatic. Besides loving German football, he also enjoys the NBA, collecting jerseys and LPs, his pets and wishes he had more time for fishing, bicycling and learning the bass guitar.

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