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Bundesliga and DFL end talks for private investment

Top two divisions of Bundesliga have stopped the talks with private equity firms about a stake in DFL, which is German Football League’s new broadcast rights entity.

According to Reuters, a meeting was set on 19th May to discuss about selling a minority stake but the clubs have stopped the talks for now with KKR, Bridgepoint and CVC capital partners which were on the short list. 

25% stake was proposed in sale in the two new subsidiaries- Media Co and Digital Co. These two firms would have bought in around €500 million for Bundesliga which would have valued the league’s international rights at around €2 billion in total. 

The latter would have been beneficial for the German League as they could have made a good fortune even after no sale for tickets in stadiums 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 Members Assembly today.

“Having weighed up the facts, the Bundesliga and Bundesliga 2 clubs decided not to continue the talks at the present time. Independent of this, there was agreement that it is essential that clubs and DFL work together on concepts for accelerating international marketing.”

Bundesliga had sent a prospectus in March to potential investors and before, in February, it was reported that private equity firms were invited to bid for a stake in brand new subsidiaries.

DFL Chief Executive, Christian Seifert, mentioned it to the newspaper Frankfurter Allgemeine Zeitung in March: “The structure essentially envisages a new company that will receive the licence to exploit international media rights and global marketing rights for 25 years.

“This underlines the solid long-term investment approach, which offers both clubs and investors security when entering and also when exiting. Private equity firms are usually partners on a temporary basis, and under our model an exit is possible after a few years without any problems.”

Meanwhile, MediaCo unit is expected to absorb the existing Bundesliga International. The company is also expected to make divisions for handling Bundesliga’s international rights and also create a new OTT platform. DFL also revealed that DigitalCo will have rights for Bundesliga’s esports and activity management. 

Even Serie A’s seven top flight 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 is yet to be called off. 

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