Crushing defeat for bosses: DFL rejection of investor raises pressing questions

After weeks of massive protests from many fans, the German Football League has broken off negotiations for an investor to join. This weekend it will be seen in the stadiums of the 1st and 2nd league whether the games will now run without interruptions again. The seriously damaged DFL leadership has to look for new sources of money to finance the planned modernization projects. The cancellation of the billion-dollar deal also raises questions about maintaining the unity of professional football.

What happened?

After weeks of massive fan protests, the German Football League (DFL) recently pulled the ripcord – and stopped the planned investor deal. At a crisis meeting in Frankfurt, the executive board led by spokesman Hans-Joachim Watzke voted “unanimously” to break off the talks with CVC. The financial company from Luxembourg was the last remaining potential investor for entry. The DFL’s second attempt to attract investors also failed.

What were the DFL’s plans for an investor to get involved?

The 36 professional clubs should receive a sum of between 800 million and one billion euros. For the money, an investor would have received six to eight percent of the shares of a DFL subsidiary, to which all media rights would have been outsourced, for 20 years. The DFL would have wanted to use the income to make professional football fit for the future in order to upgrade the product – keywords digitalization and internationalization. A streaming platform should be set up and foreign marketing should be pushed forward so that in the long term more money would come in from the bet on the future than would have had to be paid out to the investor.

Just over a year ago, the DFL’s plans became known for the first time to sell 12.5 percent of the shares in a new subsidiary for 20 years. Media rights should be outsourced there; an investor should pay two billion euros to get involved. After the plans became known, there were already protests from fans; at the general meeting on May 24th, the plans failed to achieve the required two-thirds majority among the clubs.

The first signals for a second attempt in a scaled-down form followed in September. On December 11th, 24 of the 36 clubs – exactly two thirds – voted in favor. It is unclear whether Hanover’s managing director Martin Kind voted yes, contrary to the parent association’s instructions. The fan protests against the decision increased massively, and the DFL continued to negotiate, most recently with the company CVC. On Wednesday the presidium stopped the negotiations.

Why did the fans protest so massively?

Many supporters, especially the organized ultras, reject the ever-increasing commercialization of football. They saw the possible investor entry as an attack on the grassroots popular sport of football; the process was not democratic enough for them. Added to this was Martin Kind’s opaque role in the clubs’ secret investor vote in December. There is a suspicion that there may have been a violation of the 50+1 rule.

The rule limits the influence of external donors on clubs in the first and second divisions. Hanover’s club leadership had instructed Kind to vote against the investor’s entry. However, the result of the vote and the public confessions of opponents suggest that the 79-year-old voted yes and thus helped the DFL plan gain the necessary majority. Child himself does not comment on his vote.

How do the fans react at the weekend?

He cannot guarantee that the protests will end, said Thomas Kessen, spokesman for the fan umbrella organization “Our Curve”. “This protest was designed very individually locally, was driven forward, and there was no central orchestration – accordingly there is no central orchestration as is being celebrated now.” You’ll definitely see “one or two funny posters” over the weekend, but Kessen doesn’t expect any further provoked interruptions of more than 30 minutes: “I would at least be very surprised if someone else did that now.”

The fans’ position seems to have been strengthened for the time being after the victory in this showdown with the DFL. This could encourage organized supporters to engage in similar actions to confront clubs and league bosses for other goals. “The DFL is welcome to continue thinking about investors or other potential for further development, the crucial thing is that it learns to discuss all of this with the members of the clubs,” warned Kessen.

What does the end of the negotiations mean for the DFL leadership?

This is another crushing defeat for the DFL. The chairman of the supervisory board, Hans-Joachim Watzke – also managing director of Borussia Dortmund – supported the entry of an investor who would bring in fresh money for modernization and boost foreign marketing. The two relatively new DFL managing directors Marc Lenz and Steffen Merkel had also explicitly promoted the plans until the very end. The first attempt failed under their interim predecessors Axel Hellmann from Eintracht Frankfurt and Oliver Leki from SC Freiburg.

There was massive criticism of the league leadership, especially from the fan scene, because of poor communication and a lack of transparency in the investor process. “The mistake was with the DFL in that they didn’t even take fans and members with them,” criticized Kessen. The question now is how much the bosses are damaged by the failure of the project and whether trust in the DFL leadership can be restored.

How do the clubs react?

Bayern Munich, for example, has not yet commented. Clubs such as VfB Stuttgart, FC Augsburg and Hertha BSC welcomed the DFL’s decision. “Now it is important to draw conclusions from the past few weeks and to create a basis for the further development of German professional football that is supported by as many as possible. Associations, clubs and fans can only do this together,” said Stuttgart . FC St. Pauli said: “With this step, we are urgently required to seek the institutionalized dialogue with the fan groups that has been lost for many years and to necessarily talk to each other about the financial future of the clubs.”

How does the league want to get fresh money?

The DFL will invite the clubs to talks in the next few weeks to discuss the procedure. “We just have to start over now,” said Watzke: “One thing is of course clear: most people will see that we have to do something somehow if we want to present ourselves a little better or better as a Bundesliga abroad “want to market”.

According to Watzke, the previous model with a minority stake in a subsidiary is off the table. “This process has been shelved. We have to start all over again,” said the 64-year-old. Discussions should follow with the clubs about other ways in which fresh capital could flow into the league. Clubs could take on debt to finance modernization measures. With their own loans they would be independent of an investor. Many fans did not believe the league’s statements that a donor should not have a say in crucial issues such as game schedules or kick-off times.

Is there a possible threat of a Bundesliga splitting off?

After the first – failed – vote, the gap between large and small clubs became very clear; internationally playing industry leaders such as FC Bayern Munich and Borussia Dortmund openly feared for their competitiveness. The larger clubs would “certainly also think about what happens next for them,” Watzke said last May, adding that “please no one else comes to him with “solidarity issues” in the near future. Watzke said that separating the leagues was only the “ultima ratio”, i.e. the very last resort. Much more violent fan protests would be expected as a result of such a step.

To date, professional football income from media rights has been generated via the DFL’s central marketing and distributed to the 36 clubs. After the end of the negotiations, managing director Michael Ströll from FC Augsburg explained that the merger of the two leagues was a great and important asset for German football. “It is important that this decision is not used by supporters to force the division of the leagues. That would be completely out of place in the current situation,” emphasized Ströll.

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