In 2021, the Deutsche Fussball Liga (DFL) altered its revenue distribution model for both domestic and overseas broadcast rights, in a bid to help its clubs manage the long-term financial impact of the Covid-19 pandemic. Previously, 70% of revenues from domestic and international rights were shared based on team performance over the previous 5 seasons. This clearly benefitted the larger clubs. Going forward, 50% of domestic revenue will be distributed equally among the clubs. The share of international rights for the top 18 clubs will increase from 25% to 35% and will be shared more equally.
How does this compare to other top leagues? Until 2015, Spanish clubs sold their broadcasting rights individually. Then, under Royal Decree 5/2015 the system changed to one of collective bargaining. Since then, not only has revenue been shared more equitably, but overall broadcasting revenue has increased from €850 million in 2014/15 to €1,450 million in 2016/17 when the collective system was implemented. That’s a remarkable 70% surge in money into the coffers of clubs up and down the country.
Italy altered its structure in 2018, whereby 50 per cent of the Serie A’s rights income is shared equally between its clubs, marking a 10 per cent increase on the previous model. Of the remaining share, 30 per cent of the income is allocated based on results, with the final 20 per cent to be distributed based on other criteria.
Let’s look at the gold standard now, the English Premier League. Domestic broadcast revenue is distributed as follows:
- 50% is divided equally between the clubs.
- 25% is awarded on a merit basis, determined by final league positions.
- 25% is distributed as a facilities fee for televised matches.
Clubs would continue to share the current levels of international revenue equally, but any increase would be distributed based on where the clubs finished in the Premier League.
This would cap the ratio between the maximum and minimum a club received at 1.8:1 (the highest-earning club receives 1.8 times the amount received by the lowest-earning club).
The trend is toward a more egalitarian division of the spoils across the board. It’s not perfect, the bigger clubs will always have a larger slice of the pie through ticket sales, merchandising and so on, but in theory should make leagues such as the Bundesliga more competitive. Broadcasters want keenly fought competitions to broadcast so it is in their interests to help level the playing field. If things don’t change in Germany, they will lose interest and revenues will go into a downward spiral.
But until the Bundesliga becomes competitive, it’s unlikely that clubs other than Bayern will generate revenue through ticket sales, merchandising, and sponsorship significant enough to allow them to truly compete. The only way to allow the likes of Dortmund or Eintracht Frankfurt or Hertha Berlin get on level pegging – in a sustainable fashion – is to allow an influx of investment. Since the 50+1 rule prevents investors from taking control of the decision-making processes, tensions with club management are often inevitable as the recent examples of 1860 Munich and Hertha Berlin have shown.
The alternative is that Bayern leaves the Bundesliga for the promised land of a European Super League, if that ever becomes a reality (that looks more and more unlikely though). This would give Bayern the calibre of opponent they must crave week in week out. That could drive the club to greater success in Europe. This would again be at the expense of their fellow German clubs and to date they have indicated they are against such a break away.
By population alone and DFB membership Germany is the largest market in Europe for soccer and has in theory the potential to be the home base of a league that could eclipse all others – including the English Premiership. There are some established limitations – the Premier League’s historical popularity owes something to the primacy of English as the world’s lingua franca. This may have helped make the teams more relatable to people around the world and helped its global conquest through satellite broadcasting starting I the 1990s.
Similar cultural advantages may have helped Spain’s La Liga abroad too, as Spanish is the second most spoken language in the world and the Spanish league has a significant following in Latin America. The Bundesliga has no such cultural cachet outside of its immediate geographical region in Central Europe.
This limited appeal outside of German speaking countries may have limited foreign investment in German football prior to the implementation of the 50+1 rule and could explain why no club quite managed to match the economic power of Bayern in the formative years of the Bundesliga. This may be an area that deserves further investigation, for now it remains an interesting point for discussion and debate.
But Bayern have proved that a German club can operate globally. There must surely be room for more of their brethren to share a bit of the limelight. If the regulatory landscape changed, other clubs could realize their potential.
There has been a lot of talk in recent years about Super Leagues and the growing disparity between the Haves and Have-Nots of European club football. Germany and Bayern Munich may offer a glimpse of what the future holds across the continent.
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