Fu?ball's Coming Home? The Bundesliga's Big Opportunity

Eleven years ago, German football was on a high.

Bayern Munich and Borussia Dortmund had just contested the 2013 UEFA Champions League Final at Wembley. Meanwhile, the Bundesliga was in rude health – a competitive league with cheap tickets, fan ownership and financial sustainability which was viewed by the UK media as a poster child for what the Premier League should be.

Over the following decade, German and English football have taken different paths. The Premier League became the dominant global football brand, while the Bundesliga suffered under ten long years of Bayern Munich dominance.

But hope springs anew. Xabi Alonso’s Bayer Leverkusen side went unbeaten domestically in 2023/24. Borussia Dortmund made another UEFA Champions League Final at Wembley, albeit with the same outcome. And we are just ten days away from UEFA EURO 2024 kicking off in Munich, putting German football culture firmly in the spotlight for a month. ?

It's time for the Bundesliga to make the most of German football being trendy again - but the gap to the Premier League is vast and there is plenty of work to do.

Media Rights - Domestic good, international not so good

The Bundesliga is still an attractive product to domestic fans. The current deal with Sky and DAZN is worth just shy of €1.1bn a year, just behind La Liga and above Serie A and Ligue 1, but lower than the previous deal. Compare that with the Premier League’s €1.9bn a year domestic deal.

The next domestic rights cycle is due in summer 2025. Experts had initially predicted the value to flatline owing to a lack of competition from broadcasters. This will now surely be exacerbated by DAZN’s ongoing legal proceedings against the Deutsche Fu?ball Liga (DFL), alleging anti-competitive behaviour, which have brought the auction to a screeching halt.

The bigger issue is the overseas rights market, where the Bundesliga is lagging behind its peers and has seen its share of the pie shrink since 2020. Its current international TV deal is worth less than €0.2bn a year, trailing La Liga and a country mile behind the Premier League’s bumper €2bn a year overseas arrangement.

Take a glance at the Deloitte Football Money League and the impact is clear. Bayern and Dortmund make the Top 30, mostly on account of UEFA broadcast revenue and strong commercial revenue. Eintracht Frankfurt squeaked into 16th place this year after a two successful European seasons. But beyond that it is a barren field.

The trickledown effect is that, with some notable exceptions, even Germany's bigger clubs are fishing in the same talent pool as some of the Premier League’s smallest, widening the gap in on-field quality.

Build it and they will come?

On the face of it, this lack of international demand is surprising.

German football is generally a good spectacle. Fanbases are passionate and travel to away games, unlike in other parts of Europe. And some of the stadiums are among the most historic in world football.

Trouble is, too many of those famous old grounds are stuck hosting second division football. 50% of this summer’s ten venues are home to teams in the 2. Liga.

It’s a symptom of the decline of several traditional big clubs over the past ten years.

Various forms of on- and off-pitch mismanagement have consigned heritage clubs like Hamburger SV, Schalke 04, Hertha BSC and others into the wilderness of the second division. While there is less of a relegation-induced financial cliff edge than in English football, 2. Liga is a devilishly tricky league to get promoted from.

They have been replaced by smaller, nimbler clubs that are well-run financially and operationally. Some of these are great footballing stories, but Heidenheim vs Hoffenheim in the 15,000-seater Voith Arena is undoubtedly a tougher sell for international viewers and football tourists than a big clash at Schalke’s 63,000-capacity AufSchalke Arena. ?

In other parts of Europe, financial investors would look at these fallen giants and see deep value in bringing them back to the top table and growing their brand internationally.

That’s out of the question in Germany, thanks to the 50+1 rule. Prior to 1998, German clubs were run as non-profit member associations. When this changed, the DFL introduced 50+1 rule, mandating that club members must have full majority control over decision making.

Clearly there are some exceptions to the rule (Bayer’s involvement at Leverkusen, Volkswagen at Wolfsburg, SAP at Hoffenheim and, most controversially, Red Bull at Leipzig), but the door to more exceptions appears shut after the DFL tightened 50+1 last year. ?

Critics of 50+1 say that it negatively impacts everyone. Big clubs are (usually) hampered in Europe as they cannot compete financially against their English and Spanish rivals, while smaller clubs are prevented from putting money into the club to challenge the established hierarchy.

Advocates say it is vital to keeping clubs financially sustainable and grounded within their communities.

Would sovereign wealth fund money make the league more competitive and interesting to international viewers? It’s a moot point, as 50+1 is going nowhere.

Where does the money come from?

The squabble for eyeballs is only going to get tougher as more newcomers barge into the broadcast rights scene. The Bundesliga isn’t just fighting against other European leagues, but against the encroachment of MLS, the Saudi Pro League and others.

That means standing still isn’t an option. Again, not that straightforward.

The DFL has now tried and failed three times to bring onboard private investment to the Bundesliga media rights business. The last attempt, which would have exchanged €1bn for an 8% share in a new media rights vehicle, managed to pass the required two-thirds majority with the 36 Bundesliga and 2. Bundesliga clubs, but was torpedoed by prolonged fan protests.

Speak to people on the ground, and fans accept that investment is required – but there remains an ingrained cultural aversion to private capital and the hardcore, vocal minority has proven impossible to ignore. Either way, this proposal is dead in the water. It might return, but there will need to be a long period of rolling the pitch with fans beforehand.

In the meantime, the Bundesliga needs to think differently and try to find the space not occupied by the Premier League behemoth. Last week’s appointment of a sports marketing agency to sell international rights in Central and Eastern Europe was perhaps a sign of the direction of travel, given the number of players from that part of the world plying their trade in the German leagues.

Looking towards the US, football's current goldmine, Bayern and Dortmund have both made the cut for next year's inaugural 2025 FIFA World Cup. But they already have a fanbase Stateside - it's the rest of the league that needs attention.

Either way, none of this will make a great a dent in the Premier League’s lead. Investment is required, not just in the infrastructure of the league, but in its global marketing footprint and other areas like digitisation.

Deutschland. Ein zweites Sommerm?rchen?

And so, to this summer’s spectacle.

The last international tournament to take place in Germany was the FIFA World Cup in 2006.

It’s difficult to overstate the cultural impact of that tournament, even to this day. Taking place just 16 years after the fall of the Berlin Wall, it’s still regarded as the moment that brought the country together and made flying the flag feel acceptable.

From a football perspective, it also had a major impact. Some of the most recent stadium redevelopments took place prior to the tournament. Average attendances post-2006 grew from the high 30,000s to the low 40,000s. And Germany’s progress to the Semi Finals gave birth to a golden generation culminating in the Wembley Final and World Cup win one year later in Brazil.

That is a tough act to follow - but it's an opportunity to advertise German football culture to the world. The Bundesliga needs to capitalise on it.