Billionaire poker for the Bundesliga
Why the fight between Sky and DAZN is making the clubs happy
September 25, 2024, 9:40 p.m
After the arbitration ruling in the dispute between DAZN and the German Football League (DFL), the clubs could become the big winners. Instead of a long-feared decline in income, there is now actually a plus. But there is still a long way to go.
There was no sign of a bad mood among the club bosses when the executive committee of the German Football League (DFL) had to prepare the new edition of the billion-dollar poker game. After all, after the arbitration award in the dispute between the league association and the streaming provider DAZN, it quickly became clear to the boardrooms that their clubs could become the big winners.
Due to the necessary restart in the allocation of media rights, the starting position has clearly shifted in favor of the 36 first and second division teams. While the club bosses had feared a decline in revenue before the auction originally started in the spring, an increase now seems possible. The reason for this is simple: Since DAZN and its competitor Sky know before the auction restarts what each other ultimately offered for the coveted rights package B on the first attempt, the DFL can now expect higher offers. The league association can rely on the fact that both applicants definitely want to purchase the package. The competitors’ reactions to the arbitration award undoubtedly lead to this conclusion.
There are a total of 196 games per season
“We continue to be convinced that DAZN is the best partner for the DFL, for the clubs and for German football fans,” DAZN said. Sky made it even clearer: “We are very well positioned for the allocation of media rights and are confident that we can continue to offer our viewers the best Bundesliga experience and remain the leading sports provider.”
Specifically, package B includes the Saturday games at 3:30 p.m. as well as the individual matches on Friday evening and the relegation – a total of 196 games per season. In mid-April, the DFL suspended the auction of German-language media rights for the four seasons from 2025/26 to 2028/29 due to the dispute with DAZN, like Sky the owner of the live rights until the end of the current season.
DAZN felt discriminated against because its offer was rejected even though it was “the most financially attractive and convincing.” The bid is said to have amounted to 400 million euros per season – a total of 1.6 billion euros. However, the DFL did not accept the financial guarantees provided by DAZN. That’s why package B is said to have gone to Sky despite a lower offer (allegedly 320 million per season).
There is another catch for DAZN
DAZN then called the arbitration tribunal – and was able to feel like a winner by rescheduling the auction. The DFL announced that evening after a presidium meeting that it would accept the arbitration award. However, a decision on the next steps will only be made “after further legal assessment in the coming days.”
For DAZN, in addition to Sky’s declaration of war, there is another catch in the matter: it is certain that the DFL will explicitly demand a bank guarantee in the new auction regulations. The league association will “take account” of cases in which “collateral or confirmation” could be required in the auction, it said in a statement. In contrast to the first attempt, DAZN has to overcome this hurdle.
And something else plays into the hands of the clubs, for whom the money from media contracts is by far the largest source of income: As the bids become known and the obviously great value of the rights for those interested, further applicants could be brought onto the scene. This would more than outweigh the disadvantages caused by the delay in terms of planning security. The total proceeds from the auction could exceed expectations – the clubs currently receive around 1.1 billion euros per season. How many subscriptions the fans need and what they have to pay for them is just as unclear before the restart as it was at the first attempt.
