DFL delays TV money payment
Bundesliga clubs have to plug an 80 million hole
03.06.2024, 12:07
80 million euros are missing, the German Football League is paying out less to the Bundesliga clubs than expected. For some clubs, this means big problems. For example, VfL Bochum, who just about managed to stay in the league. HSV, on the other hand, can breathe a sigh of relief.
The clubs in both Bundesligas have a financial problem. The German Football League (DFL) is paying out much less money in June than originally planned. Around 80 million euros are missing at the end of the season that has just ended, which is also the financial year for many of them. The already cash-strapped clubs in particular are having problems because the money that was announced and is now missing is not due until December.
At the end of April, the DFL sent out a letter that alarmed many clubs. “The payout rate for June 2024 will be reduced from the original 127 million euros to 47 million euros,” said the letter, which was made available to the German Press Agency. In total, “the currently forecast total payout amount” in the current season will be reduced from 1.179 to 1.099 billion euros.
“The timing, especially in the context of the ongoing or suspended auction of Bundesliga media rights, was surprising,” said Eric Huwer, CFO of second division club Hamburger SV. The temporary outage has various effects on the heterogeneous club landscape of the 1st and 2nd Bundesliga, he explained.
Each club is now missing around seven percent of the money they had planned. “That is difficult for us,” said Ilja Kaenzig, managing director of VfL Bochum. The Bundesliga club, which was just saved in the relegation round, will have around 2.5 million euros less at its disposal in June. “We cannot bridge that, we have to save it.”
Not everyone has a fixed deposit account like FC Bayern
For a second division club like HSV, the shortfall is still around 1.2 million euros. Nevertheless, CFO Huwer assures: “To be honest, it doesn’t affect us particularly, we take note of it. The safety net, i.e. the risk provision that we have in place to a certain extent for such unforeseeable losses, is sufficient.” In the past, it could have caused problems for the club if amounts of this magnitude were delayed at short notice, admitted Huwer.
It is particularly difficult for clubs that are already in debt or for clubs that are more dependent on media revenues to plug the hole. Those who already have financial problems cannot easily get a loan from the bank or may have to use the income from season ticket sales to bridge the gap. Not everyone has a fixed-term deposit account like FC Bayern Munich, which is estimated to be missing €6.3 million due to the provisional reduction.
There are also smaller clubs that are not stumbling. Second division relegated club VfL Osnabrück can cushion the loss, according to managing director Michael Welling. “That doesn’t pose any major problems for us,” assured Welling. He merely referred to “lost interest income” of around half a million euros.
Dispute with DAZN is the trigger
The promised money will be paid later, “since payments from partners could not be made on the contractual due dates,” wrote the DFL. “At the instigation of the partners concerned, agreements had to be made for later payments.” The majority of the now missing revenue, around 50 million, must be paid by the sports internet broadcaster DAZN, which is in dispute with the DFL over the interrupted auction of the TV rights and has taken the matter to arbitration. It is currently not known which company is involved other than DAZN, or whether there are more than two debtors.
DAZN is missing the installments for March and April. In coordination with the DFL executive committee, the missing sum was initially “financed through a short-term bank loan,” said the letter from managing directors Steffen Merkel and Marc Lenz and finance director Jörg Degenhart. “However, a reduction in the payments is now unavoidable for the payment in June 2024.”
The question of why the DFL did not take out a bank loan until December remained unanswered. The media company wrote to the clubs: “The fact that the financing for the clubs was obviously not sufficiently secured by the DFL also came as a great surprise to DAZN.”