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Germany's weaker broadcast deals capping Bundesliga growth, says new UEFA report
Published in Daily News Egypt on 10 - 11 - 2015

The Bundesliga may make more money than its counterparts in Italy and Spain, but the league will languish in the wake of the English Premier League improve until it changes how it sells its broadcasting deals.
The Union of European Football Associations (UEFA) ranked the German Bundesliga second behind the English Premier League in total revenue in the 2014/15 season. That is great news for the league, but the report also suggested the league's broadcasting deal is not allowing the German top flight to breaking away from its competitors in financial terms.
The Bundesliga outdid the Spanish Primera Division, French Ligue 1 and Italian Serie A in total revenue from the likes of gate receipts and sponsorship deals. However, when it came to revenue generated through broadcasting deals over the past year, the Bundesliga slumped to fourth place, behind England, Italy and Spain.
Indeed, among the top 30 clubs in Europe based on total revenue the Bundesliga had no less than six clubs – yet when it came to money made from broadcasting there wasn't a single German representative within the top 20.
Lack of broadcast competition
So why is the Bundesliga's TV deal so poor compared to leagues in England and elsewhere in Europe?
The first problem is simple: England has two pay-tv companies battling for the domestic TV rights for the Premier League: BT Sport and Sky Sports. In Spain, Telefonica and beIN Media Group battle over the privilege to showcase Real Madrid and Barcelona, while Sky Italia and Mediaset go head to head for Italian football each season. In Germany, the Bundesliga has just one bidder in Sky Deutschland.
Like any market, demand from two bidders for a product pushes the price beyond the previous value. This was most evident earlier this year when the renewed broadcasting deal for the English top division saw both Sky and BT pay 70 percent more than they had for the previous one.
Through a bidding war that saw Sky outbid BT for five of the seven packages, the EPL was able to profit to an astronomical scale. Although Sky Deutschland did increase the value of their current Bundesliga deal in 2012 for fear of an opposing offer from Deutsche Telekom, such opposition isn't nearly as consistent or thorough as that in England, Spain and Italy.
Yet the will of the market is not the only factor dictating the difference between the value England and Germany put on their football. Fan culture throughout the Bundesliga also plays a huge part too.
While the DFL and Bundesliga may receive plenty of praise for the clubs keeping ticket prices reasonably low and the fact the fans still holding a stake in their football clubs, such fan power can get in the way of the league's growth.
As Uli Hesse, author of ‘Tor!: The Story of German Football', told DW, this is not a new issue, but has in fact characterized the manner in which the Bundesliga operates for quite some time.
"In Germany, football is not considered a part of the entertainment industry but is widely understood as a communal experience," Hesse said. "Travelling with your team is still an important part of our fan culture and there are fan pressure groups that fight staging games at very early (or late) hours.
"The idea of paying money to watch football (on television) still has not taken root in Germany. You can't force Germans into paying money for football, as they did in England."
Indeed, football fans in England have to wait until 10:30 p.m. on a Saturday to watch the highlights of the Premier League on free-to-air television, while fans in Germany can catch all of the action as early as 6 p.m. Although this may be fan-friendlier, it limits the window in which Sky Deutschland can offer exclusive highlights and therefore the value of such deals to the Bundesliga.
All past attempts to alter this arrangement – such as the Sirius Group's bid to buy the Bundesliga's rights and show games and highlights on pay-TV in 2008 – has faced strict opposition not only from fan groups, but also the national authorities. There was also the collapse of the Kirch media group in 2002 which effectively handed the initiative back to free-to-air television over a decade ago.
Tradition vs. Business
Austin Houlihan, a director at the Sports Business Group and a contributor to Deloitte's Football Money League report each year, believes the Bundesliga is missing out because of this more traditional fan base.
"The pay-TV market in Germany hasn't developed at the same rate as that of the UK, Italy, etc., in part due to the proliferation of free-to-air (or low cost) channels available to the public," he said. "The Bundesliga still generates the second-highest cumulative revenues after the EPL. However, the DFL/Bundesliga's challenge is that increasing broadcast revenue is driving overall growth for other leagues, and it is increasingly tough for the Bundesliga to keep pace."
According to Houlihan, the Bundesliga already has the core components for a successful league in place – strong attendance, commercial support, governance & integrity, youth development, and a competitive league. What's missing is a lucrative international broadcasting deal.
"It's not just from domestic broadcast deals that the likes of the EPL and La Liga are achieving strong growth," Houlihan said. "Both these leagues have also recently secured substantial uplifts in the value of international broadcast deals."
Although the Bundesliga has already had relative success in marketing itself in the US and Asia, the league can (and may have to) gain ground on the likes of Spain and Italy.
"The international rights are still sold fairly cheaply because the Bundesliga has so much catching up to do," Hesse said.
A combination of factors caused the Bundesliga to fall far behind. The language plays a role, as English and Spanish clubs will always be more popular in the US. Then there's the fact that German football as a whole was not very attractive around the turn of the century, when the foreign markets exploded.
"Many men in power just neglected to think globally and it remains to be seen whether the Bundesliga can make up lost ground," Hesse concluded.
At the moment German football remains comfortable in second placein total revenue, far behind England but notably ahead of the other big three leagues. Nonetheless, with no more stadiums to fill or any substantial increases in sponsorship on the horizon, the Bundesliga must now turn its full attention to how it broadcasts itself to its own fans at home and across the world if it hopes to continue growing quicker than its competitors.


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