Bundesliga Set To Break €1B Mark With New Domestic Broadcast Rights Deals

The German Football League (DFL) is set to generate at least €1B ($1.1B) annually from its Bundesliga broadcast rights starting in '17-18. "And they will easily make that," said industry insider Scott Roxborough. The Hollywood Reporter's European news editor is confident the Bundesliga will see a substantial increase over the next four-year rights period which runs through '20-21. During the upcoming season, the DFL will receive €835M ($932M) from domestic and int'l broadcast rights. The majority of that amount, €673M ($751M), will come from domestic deals. While the Bundesliga is "not nearly at the level of the Premier League," which will generate £1.7B ($2.5B) annually from its domestic TV rights, Roxborough said, it is important for Germany's top flight to "build up its brand." The Bundesliga's domestic rights tender, which was launched in April, for the first time features a no-single-buyer rule that prohibits individual bidders from obtaining all live broadcast rights. “The no-single-buyer rule will lead to more competition, which likely means more money, more revenue from the whole rights process,” Infront Germany Associate Dir Stephanus Tekle said. Pay-TV operator Sky, part of Rupert Murdoch's media empire, currently holds all domestic live pay-TV broadcast rights across all platforms. This will not be possible anymore due to the new rule.

IN WITH THE NEW: Sky along with other current domestic rights holders including German public broadcasters ARD and ZDF, Constantin Medien (Sport1) and Axel Springer (Bild) are again expected to be in the hunt for rights. The importance of Bundesliga rights in the market has also attracted other media outlets such as Eurosport, Deutsche Telekom, RTL, Perform Group and Amazon. Those entities, should they secure rights, could shake up the traditional viewing habits of German football fans. “The biggest challenge for the DFL and CEO Christian Seifert is keeping the tradition of the product,” Tekle said. “Germany is a traditional media market, where people are used to getting the content in a highlight format on free-to-air after the games’ final whistle … but [the league] also has to make a step toward innovation and opening the product to new players in order to appeal to a younger audience and their media habits.” The media companies are bidding on eight live rights packages and nine highlight rights options in the current tender. Experts believe the league could generate as much as €1.5B ($1.7B) annually from domestic rights over the next rights period. The DFL is expected to announce the winners of the bid process ahead of Euro 2016.



SBD Global took a look at the potential bidders and their chances.

SKY: The pay-TV network currently holds all live pay-TV broadcast rights to the Bundesliga and the 2nd Bundesliga. The no-single-buyer rule, however, prohibits Sky from again obtaining all live rights. Roxborough: “They would love to gobble up everything. The problem with Sky [in Germany] as opposed to the U.K. is they only have 4.3 million subscribers.” Though Sky might have the financial might to buy all live rights, the new rule and Bundesliga’s intention to maximize exposure seem to limit Sky’s chances.

EUROSPORT: The pan-European sports network already has a number of int’l Bundesliga rights in its name. Eurosport, which is part of Discovery Communications, operates a free-to-air channel and pay-TV channels in Germany and could be in the hunt for both types of rights, Roxborough said. “The Bundesliga would love [the increased exposure],” he added. Eurosport’s coup of securing the Olympic broadcast rights across Europe has shown the channel’s appetite for premium content.

SPORT1: German sports TV network Sport1, which is part of media conglomerate Constantin Medien, owns highlight rights to Bundesliga and 2nd Bundesliga games. It also airs a weekly 2nd Bundesliga match live on Mondays. “They don’t have the cash to make a bid for live rights,” Roxborough said. “They might make a bid to get pieces and hold on to what they got.” However, should it get live rights, he said, Sport1 is expected to put them on its pay-TV channel Sport1+ to attract new subscribers.

RTL: The Cologne-based free-to-air TV channel for years has been the home of F1 and boxing in Germany. More recently, however, RTL secured football rights to Euro and World Cup qualifiers of the German national team. Despite the channel's newfound interest in football, the Bundesliga is a different category of commitment, Roxborough said. “Theoretically yes, but I don’t actually see it in the practical sense just because of the financing,” he said. “They haven’t really put sports as a main focus. They are very financially careful. They are focusing more on in-house drama than sports. I don’t expect it because I don’t think it relates to their strategy at the moment.”

PROSIEBENSAT.1: The Munich-based media corporation is not a big player in terms of sports rights. It used to own Bundesliga highlight rights in the ‘90s, but currently has only tennis and the NFL in its program. It also spent a lot of money on Champions League rights a few years ago. The result was a ratings disaster because of how its programming is designed, Roxborough said. “They are heavily dominated by U.S. drama,” he said. “The NFL fits quite nicely into their brand and the Bundesliga doesn’t. The NFL fits more into the idea of having more American stuff. I don’t see them making a big bid.”

ARD/ZDF: German public broadcasters ARD and ZDF have been part of the Bundesliga fabric since the league’s inaugural season in ’63. ARD’s Bundesliga “Sportschau” highlights program draws an average of 5 million viewers. The channel also live broadcasts the opening games of the fall and spring halves of the season. As government-owned services, which are financed by taxpayer money, ARD and ZDF do not have the deep pockets to compete with Sky or Eurosport for live broadcast rights. “[ARD and ZDF] are looking to hold on to what they have,” Roxborough said. He added the channels’ large exposure makes them a highly desirable partner for the league and its sponsors.

DEUTSCHE TELEKOM: German telecom giant Deutsche Telekom has put an increased emphasis on sports rights to promote its Entertain IPTV offering. Similar to BT in the U.K., Deutsche Telekom’s main revenue stream is its broadband Internet service. The company held the Bundesliga’s live mobile and IPTV rights from ’09-13 before losing them to Sky. “Telekom is focused on online rights as they want to drive their Internet service,” Roxborough said. “It is not interested in over the air rights at all.” Deutsche Telekom recently secured the rights to Germany’s top-tier basketball and hockey leagues. The main goal is to drive customers to its bundle offerings consisting of phone, Internet and TV, Roxborough added.

AXEL SPRINGER: German media company Axel Springer, owner of the country’s largest daily newspaper BILD, currently has online Bundesliga highlight rights. It uses those rights to promote its paid content service called BILDplus, which launched in ’13. Axel Springer is looking to hold on to its streaming rights and maybe even increase its offering, Roxborough said. “They are not as interested in full games as they are in highlights,” he said. “Online rights is somewhat the most interesting place where the bidding will happen because there are several potential partners like Amazon.”

AMAZON: The Seattle-based e-commerce company has been rumored to make a bid for Bundesliga rights. It only recently secured video-on-demand rights to show historic Bundesliga content on its Amazon Video and Amazon Prime services in Germany. Other online services such Google’s YouTube, Yahoo or Netflix have long been thought to look at sports rights to attract customers. Roxborough: “If Amazon does secure rights it would be a huge move because it would be the first time a big SVOD player has bought some sort of major sports rights.”

PERFORM GROUP: The U.K.-based sports media company operates a number of online properties in Germany. The company is also on the verge of launching an OTT service in select countries this year and is therefore on the prowl for content. In Germany, Perform has secured broadcast rights for the EPL, La Liga, NBA and NFL. However, the Bundesliga’s high price point might be an obstacle. “The Bundesliga is a much more valuable set of rights in Germany than the EPL, so Perform will have to put a lot more money on the table if they hope to win any tenders,” Roxborough said. “A number of new players, including Perform, could have a shot, but they will face an uphill battle for eyeballs going up against Sky/Telekom/Discovery etc., which have established brands and a customer base [in Germany].”