Plan capitalizes on German league's popularity
The Deutsche Football League (DFL) looks set to shake up the status quo in German sports with an ambitious plan that not only challenges the country’s all-powerful pubcasters but also offers greater choice to commercial channels and ensures higher revenue from media rights to top league Bundesliga soccer.
The DFL opened bidding on Bundesliga rights Oct. 31, registering 39 interested buyers, and unveiled a strategy that includes far-reaching changes in rights distribution.
The plan underscores an intense battle with federal regulatory watchdogs earlier this year over a previous rights marketing scheme the DFL was forced to abandon.
At that time, Germany’s Cartel Office was widely criticized for blocking a E3 billion ($3.8 billion), six-year deal between the DFL and media mogul Leo Kirch earlier this year that would have allowed Kirch’s Sirius SportMedia to produce and market Bundesliga programming packages. It was a blow to the DFL and Sirius, but that decision may come back to haunt pubcaster ARD.
The DFL’s agreement with Sirius called for ARD to push back its Saturday evening sports-wrap show to a later timeslot, allowing Sirius to offer pay TV more exclusivity and charge higher prices.
In rejecting the deal, the watchdog said viewers had the right to an early evening free TV summary.
Sirius execs, commercial broadcasters and cable reps were united in their condemnation of the decision, accusing the Cartel Office of blatant favoritism toward ARD and meddling in the country’s media industry to the point of dictating sports programming timeslots.
For the DFL, it looks like payback time. The league’s new plan for the upcoming Bundesliga season could mean the end of ARD’s all-important “Sportschau” program as it includes a Saturday evening match at 6:30, effectively making the ARD show irrelevant, as well as more flexible free TV offers, allowing commercial channels the opportunity to bid against the pubcasters for individual games.
DFL chairman Christian Seifert says the new schedule would not devalue ARD’s sports show, adding that the games on offerwon’t always be top matches.
The DFL is making the Saturday evening games available to both pay and free TV broadcasters. If a match is particularly interesting, ARD can also bid for it, Seifert adds.
Nevertheless, the new setup appears likely to benefit pay TV. Of the $522 million in revenue the DFL makes from domestic rights sales, Premiere accounts for more than half — $281 million. ARD pays $124 million.
While ARD reps have remained mum about the league’s plans, DFL president Reinhard Rauball has sought to justify the strategy.
“Compared to other television content, we offer a premium product in which some 33 million German soccer fans are interested,” Rauball says. “The public broadcasters have financial resources of $10.2 billion. They can certainly decide what exactly they want to offer your viewers.”
Potential buyers will be bidding for 37 different Bundesliga rights packages, including 27 bundles for TV (including cable, satellite and cable-and-satellite combinations), three for IPTV, four for web TV and three for mobile services.
While the DFL declined to name any of the bidders, Rupert Murdoch’s News Corp., which controls Germany pay TV operator Premiere, Disney’s ESPN and ARD are said to be in the mix.
Murdoch is expected to make an offer for pay and free TV rights and possibly seek to sub-license the latter to a commercial web like Sat.1. Such a scenario could derail ARD’s chances of landing free TV rights.
ARD chairman Fritz Raff has warned that it’s becoming increasingly difficult for pubcasters to keep up in the bidding for sports rights, especially in view of greater competition from major players.
Raff says ARD remains interested in acquiring free TV rights for its Saturday evening sports summary show.
“We mustn’t fool ourselves,” he adds. “When the big players come, there will also be limits for license-fee-financed broadcasters.”