The two main divisions of the Bundesliga have halted talks with private equity firms about a stake in DFL, which is the new broadcast rights entity for the German Football League.
According to Reuters, a meeting was scheduled for May 19 to discuss the sale of a minority stake, but the clubs have stopped talks for now with equity partners KKR, Bridgepoint and CVC who were on the short list.
A 25% stake in the sale was proposed in the two new subsidiaries: Media Co and Digital Co. These two firms would have bought around 500 million euros for the Bundesliga, which would have valued the league’s international rights at around 2,000 million euros in total.
The latter would have been beneficial for the German League as they could have made a good fortune even after stadium tickets were not sold as fans were not allowed due to the pandemic.
It was revealed in a statement: “In order to carefully assess the opportunities and risks of an investment in the interests of the 36 professional clubs, the DFL spent the last few months examining specific offers from private equity firms and presented them to the Extraordinary Membership Meeting today.
“Having weighed the facts, the Bundesliga and Bundesliga 2 clubs decided not to continue the talks at this time. Regardless of this, there was agreement that it is essential that the clubs and DFL work together on concepts to accelerate international marketing. “
The Bundesliga had sent a prospectus in March to potential investors and earlier, in February, it was reported that private equity firms were invited to bid for a stake in new subsidiaries.
Executive Director of DFL, Christian seifert, mentioned it to the Frankfurter Allgemeine Zeitung newspaper in March: “The structure basically foresees a new company that will receive the license to exploit international media rights and global marketing rights for 25 years.
“This underlines the strong long-term investment approach, which offers security to both clubs and investors when entering and also exiting. Private equity firms are usually temporary partners and, according to our model, an exit is possible after a few years without any problems. “
Meanwhile, the MediaCo unit is expected to absorb the existing Bundesliga International. The company is also expected to create divisions to handle the international rights of the Bundesliga and also create a new OTT platform. DFL also revealed that DigitalCo will have rights to e-sports and the management of Bundesliga activities.
Even the seven top-notch Serie A clubs made a move to block the € 1.7 billion deal for a 10% stake in the division’s new media rights business and the deal has yet to be canceled.