The DFL also sold international rights to bwin for €20m a season. This money is only spread out among the 18 teams from the first Bundesliga. In addition the distribution key is very top heavy and uses the final table position of the last season as a ranking. The top five receive the majority of the money (€4m, €3m, €2m, €1m, €1m).

The current deal is valid for this and next season.

Maybe even English-speakers could understand the explanation or derive it from the presented numbers, calulcations and examples, it is the second post in the thread. If there is interest I could explain the essence of the distribution system here in English.

Sorry, but I dont know too many English soccer sites, especially ones who would report in detail about the antitrust problems of the Bundesliga.
As far as I know the antitrust authority sent an enquiry about the current TV deal, decentralised TV deals and their financial impact to all Bundesliga clubs, who had to send back the answer at the 19th of March. Obviously it is to short to survey all the answers and publish any information or conclusions.

Their main beef is the distribution of the money and the new publishing company, owned by Kirch and the DFL. The company would (only) give the pay tv broadcasters a prefabricated product which they would have to distribute via their channels. The idea is to lower the entrance barriers for new pay tv broadcasters, who would no longer need to build up a whole sport section from scratch.

The journalistic independence would obviously be compromised as the host (the DFL) would also do all the press work surrounding the games.

could you tell me a little more about what’s going on at the moment with the german cartel investigation inot kirch? what’s the latest? how is the tv money currently split? can you recommend a good website for this info? many thanks

some interesting stuff, but a point that should be mentioned is that the german population is 82.5m (and declining) and the uk is 60m with england’s at 50m. therefore, assuming shirts cost the same - £45, then the gap would be about £1.5bn . but point taken about sales.

The size of the home market isnt the deciding factor in the merchandising income. Real, ManU, Liverpool, Barca, Bayern etc aren’t makein so much more money than everbody else because the plaster everyone in they home countries with their products. They have a global market and teams like Schalke, Hamburg or Bremen simply can’t compete there, no extravagant marketing will help there, only long sustained success at the international and national level does. Even then they will have a hard time closing the gap.

Similar things are true for the gate receipts. Most clubs, especially the bigger ones, make the most money from business seats and luxury boxes not from the 10€ stand tickets they are only some kind of additional pocket money. I pretty much doubt that the high prices there differ that much from the English one. It even is a reasonable policy to sell a bunch of tickets at cheap prices to guarantee the appropriate athmosphere the high price spectators expect of a football match.

The biggest problem in terms of revenue for the German teams is the TV market. There is no viable competition between paytv channels to drive up the prize into crazy regions like in the PL. On top of that come home made issues f.e. repeated absolutely amateurish negotiations nd contracts by the league officials, the fans don’t wanting a split up game day, because of various reasons, competition for amateur clubs, overmarketing, away games can only planned on short notice, myth “Sportschau”, high marketing income because of the high range in public TV etc. Frankly as long as the officials are botching the TV deals as much as they constantly have for the last 7-8 years, there is no reason for the fans to step down.

The next biggest challenge will be the decision of the German cartel bureau concerning the central TV marketing. They are extremely unsatisfied with the revenue distribution (best teams get ca 25m /y, worst in 1. Bundesliga around 12m/y, teams in the 2. Bundesliga somewhere between 4-5m to 8-10m). If the central TV market goes all the mid level teams like Hannover can forget about getting good investors, because their TV deals will be too small.

Even if the Bundesliga opens itself up to investors, it wouldn’t change much in terms of internal competitiveness, as the rich clubs would get more potent investors than the smaller clubs. It would only tighten the grip of the richest clubs on the top denying the small teams the much needed income and marketing boost of the CL.

ANY model is vulnerable. There is no 100% safe business venture. The question is: ‘do you want to get the biggest bang for the buck or not?’
The semi-pro model that Euro leagues had up until the 70’s was safer but as a fan of those leagues would you want to see that? NASL was on the verge of becoming the world’s top league back in the day because they actually paid people top dollar. That was in the early 80’s. As you can see, Europe is still kinda new to making the game a self sustaining prospect.
It will be interesting to see what happens with the marketing case, but I don’t see it being as much of a target as 50+1 which violates free trade laws (see Jan’s excellent point re: Bayer & VW) that the EU seems so intent on upholding (in theory anyway) Your point on possible implications is a very valid one though.

Daniel”I don`t see any need for a sugar daddy in the Bundesliga. The financial situation is excellent. The Bundesliga grew 15% within a year and although it is not a global brand like the PL, its revenues from merchandising and sponsorship deals are much higher than in the PL. The Bundesliga might look non-commercial from the outside, but reality is different.”

Of course Bundesliga makes a great deal of money. Not including Russia, it’s nearly twice the size of any other country in Europe and the football pyramid is much shorter than any other country of ‘large’ size in Europe which means people have fewer choices of clubs to support (that’s to say nothing of the fact that Germany is the richest nation in Europe). The Bundesliga should be killing the rest of Europe in revenue. Built in competitive imbalances stifle what should be much greater growth.
Sponsorship money will always be greater in Germany because of said massive population and wealth. Germans are also more consumer oriented than most countries in Europe which makes them even more attractive to Sponsors. The same holds true for merchandising. Germany has 90 million potential people buying shirts, England has 60 million. At $100 per shirt it’s nearly a $9 BILLION potential revenue difference.

Sure there is commercialism in Bundesliga, there is in every league in Europe that is big. But the utilization of it is simplistic to say the least. I mean, 2 years ago Bundesliga formed an agreement with MLS to learn business practices in terms of marketing and liscensing in exchange for information on how to produce a match for TV. If Bundesliga seeking the advice of a league that is less than 15 years old for how to maximize revenues isn’t telling enough of how far Bundesliga needs to go despite how far it has come, I don’t know what is.
I’ve been a Bundesliga fan my whole life and just wish it would reassert itself and make the strides it could.

To answer the Serie A question, yes, the model here has always been for the owner to absorb and fund the club’s losses (when they can’t be forgiven by legislative action or absorbed by municipal authorities); Moratti has just been the most benevolent in recent years (but then, he has significantly more money than any of the others except Sivio). It fits nicely into the highly paternalistic structure of Italian football (and much of Italian society). The “Anglo-Saxon” idea that clubs can actually be run as profit-making enterprises hasn’t really caught on here (though the new group at Juve is trying, and Berlusconi has made noises about wanting Milan to break even), which may be one reason why there hasn’t been as much interest on the part of foreign investors. It will be interesting to see if the latest rumours of serious interest by the Gap/Banana Republic heir in Roma turn into something tangible, as I would imagine that he and his group have other ideas about a club should be run.

A few conclusions:
As of now only the EPL, Bundesliga and recently Ligue 1 are profitable leagues. There is no worrying revenue gap between the Bundesliga and any other league except for the EPL. With a hypothetical 20 club format the Bundesliga would have been sole second behind the EPL. The problem is just, that this doesn’t translate to the Champions League performance of Bundesliga clubs. Which probably lead to the suggestions, that the Bundesliga is falling behind Spain and Italy. Some reasons for this could be:

1. The Champions League floods Bundesliga clubs with at least €20m - €30m a year. Only Bayern Munich managed to work this to their advantage, as they competed in 9 consecutive Champions League seasons (only Real Madrid have a better record) and earned more money than any other European club in this competition during this time period. The fluctuation on the other places has been too high for any club to gain a similar monetary advantage. Ligue 1 clubs have the same problem. A similar rich elite as in other leagues would go a long way, to regain competitiveness. A big amount of the revenue of the Spanish and Italian league is generated by the 2-4 biggest clubs. It’s spread out more evenly in the Bundesliga.
2. Taxes. There are ways for clubs in Spain and England to save a lot of tax payments for their foreign superstars. In Italy clubs have exploited loopholes and it remains to be seen how rigidly the government deals with this. It’s more difficult for Bundesliga clubs to maintain expensive squads and it will stay this way, unless a European wide salary cap or something like this is introduced.
3. Bundesliga clubs are still servicing a debt of €600m which reduces spending power. A lot of it is for stadiums and infrastructure, so you can argue that it’s worth it. The rest are leftovers from the KirchMedia bankruptcy or plain financial mismanagement, as was the case with Borussia Dortmund. They recently announced that they’ll have an extra €20m per season available to them by 2010, when signing fee deals expire, which the club needed to avoid bankruptcy.
4. Since neither La Liga nor Serie A turned a profit recently, they are paying a price for their competitiveness. Real Madrid is a very profitable club, so I guess smaller clubs are responsible for La Liga’s negative result. In Serie A a club like Inter generates huge losses each season, but Moratti is willing to deal with this. I don’t know what happens elsewhere. How these clubs deal with rising debts. Or whether there are rich benefactors involved there as well, who keep it all from collapsing.

Turning the attention to the EPL: There are rich owners who are investing heavily in clubs there as well, but matchday and TV money are the two main factors for the revenue gap. Clubs in the EPL generate 2-3 times as much money in both areas than their Bundesliga counterparts. The question is how investors fit into this image. They want to make money, so they must bank on, at the very least, rising TV money, if not rising ticket costs as well. They might look to accelerate this development by investing in clubs, bring in better players and increase fan interest in the league. Which wouldn’t be such a bad thing, but you might wonder, whether it’s also possible to increase available income sources without third party involvement. Even if it’ll take a couple of years longer.

The problem is, as papa bear pointed out, that the 50+1 rule might not stand a chance in court. Hanover’s president already said, that he’ll go to court, should the clubs vote to keep the 50+1 rule. There’s another problem here as well, since the Bundesliga is operating with double standards in this regard. Hanover aren’t aiming to become a top 3 club actually. They want to be upper midtable and play in the UEFA Cup. One of the clubs playing there is Bayer Leverkusen and another club who is working hard to get there is VfL Wolfsburg. Both are an anomaly in German football as Bayer and Volkswagen are majority shareholders here. When the DFL changed the rules in the Bundesliga in the late 90s to account for the economic factors involved in football - where effectively you no longer had a 19th century model as papa bear suggested - they introduced the 50+1 rule. But they made an exception. Wolfsburg and Leverkusen were clubs founded and funded by companies and the DFL decided not to close the door on the two. Leverkusen and Wolfsburg wouldn’t be able to compete financially with a club like Hanover if it wasn’t for Bayer and VW. So you can argue, that they make it difficult for other clubs to grow and compete, when they take up the lucrative UEFA Cup or even CL spots. In a way, Hanover’s president is just asking for a level playing field. It’s a complex issue.;-)

The numbers in brackets are operating profits of the league, with the other leagues generating losses or +/- 0.

Preliminary numbers for 2006/2007
1) EPL €2,2bn
2) Bundesliga and La Liga €1,39bn
3) Serie A €1,14bn
4) Ligue 1 €1bn

So basically if BL wants to remain competitive and gain back the ground its lost then this should happen. If it’s happy with the idea of someday becoming a sub-Championship level league it should stay the same. They are running on a 19th century model in the 21st and it simply can’t compete with the model England is running on.”

The 50+1 law might violate European law, but so does the “model England is running on”. A few days ago, Murdoch filed a lawsuit in Italy against the planned introduction of “central marketing”, which is also practized in Germany and England. Should the EC of Justice deem it in violation of European law, it will have a direct legal effect upon the Premier League ( and also the Bundesliga). Bundesliga clubs will get into serious financial troubles, but the Premier League will be dead. The superior model you are referring to is extremely vulnerable…

I don`t see any need for a sugar daddy in the Bundesliga. The financial situation is excellent. The Bundesliga grew 15% within a year and although it is not a global brand like the PL, its revenues from merchandising and sponsorship deals are much higher than in the PL. The Bundesliga might look non-commercial from the outside, but reality is different.

I don`t doubt that the PL is by far richer than the Bundesliga, but the Bundesliga is the 2nd richest league in Europe. I don`t see any reason to panic. In fact, the outlook of the Bundesliga looks fantastic.