Bundesliga hits €3.4bn in revenues; Seifert defends Premier League's rights deal
By Martin Ross
Revenues from German soccer’s Bundesliga reached €3.375 billion ($4.211 billion) in 2016-17, a 4-per-cent year-on-year rise, while combined turnover from the top flight and second-tier 2. Bundesliga exceeded €4 billion for the first time.
A 10.5-per-cent jump in advertising and sponsorship revenue – to €854 million - contributed to the increased revenue total for Germany’s top division.
The Bundesliga revenues are over three times higher than the €1.09 billion recorded in 2003-04, with the league’s fiscal growth 10 times faster than that of the German economy over the same time frame, according to Christian Seifert, the Bundesliga’s chief executive.
The combined (Bundesliga and 2. Bundesliga) revenue figure of €4.01 billion represents a 4.2-per-cent uplift on the 2015-16 period, and the 13th consecutive increase.
Financial figures released today in the Bundesliga’s 2018 report showed improved results in four of the league’s six income-generating categories as media rights and transfer revenues both increased.
Media rights generated €960.6 million and remained the largest single item (see table below), up nearly 3 per cent on the previous 12 months. That figure will jump significantly in 2017-18, the first season of lucrative domestic deals. The German top flight is bringing in an average of €1.16 billion per year in domestic rights income from 2017-18 to 2020-21, an 85-per-cent uplift.
The media rights revenue figure cited in the Bundesliga’s report includes not only Bundesliga rights deals, but also money received by the clubs for taking part in the domestic DFB Pokal and European competitions.
Revenues from match-day takings and merchandising both dipped in 2016-17 given the involvement of Darmstadt and Ingolstadt in that season at the expense of relegated (larger clubs) Hannover and VfB Stuttgart. Darmstadt and Ingolstadt both have smaller fan bases and stadiums with capacities of well below 20,000.
A total of €503.8 million was brought in from match-day revenues in 2016-17, compared to €527.6 million in 2015-16, while merchandising revenue fell to €191.8 million, from €201.8 million.
The DFL, the German professional league, highlighted that 14 of the 18 Bundesliga clubs posted revenues in excess of €100 million last season, and that a cumulative total of €150 million of profit after tax was recorded after 16 of the sides returned positive figures.
Clubs from the second-tier 2. Bundesliga reported record revenues of €635.2 million in 2016-17, a 4.4-per-cent increase on 2015-16. Media rights accounted for 25.3 per cent (€160.6 million) of the 2. Bundesliga’s revenue total, ahead of advertising and sponsorship with 21.4 per cent (€135.7 million)
Premier League rights Speaking to international journalists during a conference call today, Seifert said that he believed the Premier League had “made the best out of a given situation” as the English top flight faces a drop on the £5.14 billion ($7.22 billion) over three years that it currently brings in from domestic broadcast deals with Sky and BT Sport, the pay-TV duo.
Earlier this week, the Premier League announced the sale of four rights packages to Sky for £3.58 billion and one to BT for £885 million in deals totalling £4.46 billion from 2019-20 to 2021-22, and with two smaller packages still to sell.
That news has prompted global headlines about the Premier League’s “bubble bursting” but Seifert appeared unsurprised by the results (so far) of the tender process.
He said: “Each media market is individual and has its own rules. We’ve already seen [with Serie A rights] in Italy, that maybe the time of enormous increases on a national level may come to an end, which seems to be only natural.
“At the end there are a certain amount of people living in a country and someone has to pay in the end. If you look at the valuation of each game right now for [Spain’s] LaLiga, in Italy or in England, then the valuation of the Premier League games is still great and on a very high level.”
He added: “In Germany we see some potential for the pay-TV landscape. The German TV market is increasing, [but] we are probably five to 10 years behind other pay-TV markets.”
Long-term international growth An area of major focus for Bundesliga International, the league’s worldwide rights sales arm, will be its broadcast rights in the Americas, with its wide-ranging deal with 21st Century Fox, an agreement that spans major territories in North and Latin America (and parts of Asia), expiring at the end of the 2019-20 season.
Seifert said that the Bundesliga is now examining the details of the proposed acquisition of key parts of Fox, by Walt Disney, the US media and entertainment giant, in a $66-billion deal and if it will have a knock-on effect on the Bundesliga coverage in Fox’s territories.
He remarked: “Of course we’re following the developments regarding the Fox-Disney talks in the US and how that may or may not affect the talks [we have there]. For sure the Bundesliga rights are not the most crucial point in their talks but nevertheless we have to see if that can affect us.”
The Bundesliga currently brings in over €220 million per year from its international media rights sales, and is on course to secure at least €280 million in 2019-20.
Bundesliga International last year agreed a five-year, $250-million rights deal in China with PPTV, the Suning-owned streaming service, an agreement that followed on from an accord between the German and Chinese governments to help develop soccer in the world’s most populous country.
Seifert today suggested that the DFL could look to follow a similar path in other countries in order to enhance its development (and media rights fees) worldwide.
He noted: “We differentiate between international sales and international development. To run a league means long-term reliability and responsibility. Other leagues tend to boost short-term sales. Sometimes they use third parties, sometimes they use agencies. We try to develop the Bundesliga step by step.
“We think about whether there can be other opportunities and other co-operations like that [agreement in China] because we see that ‘Football Made in Germany’, which is football as it’s meant to be is seen, is a blueprint in a lot of countries.”
He insisted that their development plans in different countries would not constitute merely a “marketing gag to send a few coaches to a country where we want to make a big TV contract.”
Given its full control of broadcast production and the provision of “tailor-made content solutions” for broadcasters in different markets (such as data and graphics provided by Sportec Solutions, the league’s new in-house data venture with Deltatre), Seifert feels that the Bundesliga is in a strong position.
He stated: “We think that this will be the future to develop long-term media relations and not squeeze out our media partners every three years.”