Germany’s Bundesliga shows a red card to private equity money. Please use the sharing options available through the share button at the top or side of articles. Copying articles to distribute to others is against FT.com’s terms of service and copyright policy. To purchase more rights, send an email to [email protected]. Subscribers may share up to 10 or 20 articles each month using the gift article service. For the second time, Germany’s top football teams have decided against accepting money from financial investors by voting against selling a stake in the league’s media and commercial rights to private equity groups.
The president of the Deutsche Fussball Liga’s supervisory board announced on Wednesday that the proposal to sell a portion of the media rights fell short of receiving a two-thirds majority among the league’s 36 members. The DFL manages the top two levels.
According to Hans-Joachim Watzke, CEO of Borussia Dortmund and chair of the DFL Supervisory Board, “the majority of the clubs voted in favor of the project, but it was four votes less than the two-thirds majority desired by the DFL executive committee, and to continue the talks with the investors.”
The DFL’s interim managing director Axel Hellmann noted that a few members had voiced astonishment at the vote’s conclusion.
According to persons familiar with the situation, the inability to win the DFL’s backing is a setback for several private equity firms, including Blackstone, Advent International, and CVC Capital Partners, fighting to acquire a 12.5% interest in the media rights industry.
Germany’s Bundesliga shows red card to private equity money
Negotiations with the bidders would have been possible if the two-thirds majority had been achieved.
Football fans, leagues, and clubs have differing views on private equity’s foray into the television rights market. A few protesters gathered outside the hotel where the vote was held on Wednesday in response to the event. They objected to the DFL accepting funding from private equity firms.
Ligue 1 in France and La Liga in Spain have already sold CVC Capital Partners shares of their media rights. Some clubs, particularly Barcelona and Real Madrid, objected to CVC’s €2 billion financing arrangement with La Liga, but it was still carried out.
After resistance from clubs, Italy’s Serie A backed out of a €1.6 billion arrangement to purchase a 10% interest in a new business managing Serie A’s TV rights.
The DFL has voted against private equity funding twice, most recently in the German deal that failed. The league decided to withdraw from negotiations to sell a part in a new media firm that would have the rights to broadcast Bundesliga matches outside of Germany in 2021.
According to the Financial Times, several private equity firms, including CVC and KKR, expressed interest in that process.
The league started discussing selling a share to investment companies earlier this year, and some of the greatest names in the buyout sector expressed interest.
Any agreement would have been a rare bright light for businesses that have seen a decline in transaction activity so far this year. Global worries about the macroeconomic environment and a shortage of debt financing options have hindered dealmaking.
According to those with knowledge of the situation, some of the bidders engaged were surprised by the decision, and the second rejection raises doubts about whether the rights will be offered for sale again.
