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Bundesliga: Blackstone considering dropping investment bid

February 13, 2024

US private equity firm Blackstone is considering dropping out of the bidding process for a share of German football's media rights, sources say. The proposed investment deal has attracted fierce criticism from fans.

Tossing tennis balls onto the pitch has been a favored method for protesting Bundesliga fans
Fan groups continued to protest against plans for the Bundesliga to bring in an investorImage: Matthias Koch/IMAGO

The list of candidates for a stake in German football's future broadcast revenues could soon be down to just one after US financial investor Blackstone said it was considering withdrawing from the bidding process, a move which would leave CVC Capital Partners as the only remaining contender.

After Bloomberg first reported Blackstone's concerns, a source also confirmed to DW on Tuesday that the private equity firm was indeed considering stepping away from the process which they said had "gone on for a very long time, during which parameters have moved."

The source cited "structuring and economic factors around the deal [which] mean that it's hard to see how we could make the setup work" as well as "destabilizing" public calls from German fan groups and some club officials for a revote on the issue, leading to "too much uncertainty about the transaction."

The Reuters news agency also quoted sources familiar with the matter who cited threats by some club officials to prolong the process further as a reason for the withdrawal of interest, with one source saying: "It's a messy situation." German newspaper Die Zeit has also confirmed the reports.

After fellow private equity firms Advent and EQT were also ruled out of the process at the end of January, Luxembourg-based CVC is the only remaining bidder.

CVC already have similar investment deals with Spain's La Liga - albeit without giants Barcelona and Real Madrid - and France's Ligue 1, where the National Financial Prosecutor's Office is currently investigating corruption complaints.

What is the Bundesliga's investment deal all about?

The private equity firms have been vying for a contract which would see them invest around €1 billion ($1.07bn) in a media rights subsidiary of the German Football League (DFL), which operates the Bundesliga, in return for an 8% share of broadcast rights revenues over the next 20 years.

The DFL was given the go-ahead to negotiate a deal after 24 of its 36 member clubs voted in favor on December 11, giving co-CEOs Marc Lenz and Steffen Merkel the necessary two-thirds majority mandate.

However, there has since been a fierce backlash from German football fans who are not only fundamentally opposed to too much external investment in the game, but who also suspect that the minimum 24-vote threshold could only be achieved by way of a secret ballot which allowed Martin Kind, chief executive of second-division side Hannover 96, to vote contrary to an explicit directive from his parent club, thus infriging the so-called 50+1 rule.

The 50+1 rule is a DFL regulation which stipulates that the parent clubs - and by extension the members, the fans - retain majority voting rights in the outsourced commercial companies which generally oversee the clubs' professional football operations.

While advocates say the 50+1 rule helps prevent majority takeovers of German clubs by external investors and preserve supporter ownership, critics such as Kind in Hannover argue that it discourages the levels of investment required to help Bundesliga clubs challenge internationally.

For the DFL leadership, the attempt to attract external investment at league level rather than at club level is one way of trying to appease skeptical fans, but they're not convinced.

What do the fans think?

Recent weeks have seen matches in Bundesliga 1 and Bundesliga 2 interrupted by up to half-an-hour as angry fans have thrown tennis balls, chocolate coins and other objects onto the pitch, while some fans in Hamburg even fastened bicycle locks to the goalposts. While officials deployed heavy machinery to snap the locks, a banner in the stands cheekily read: "The solution is 50+01" - the code which would apparently have opened the locks.

On Tuesday, a representative survey by FanQ and quoted by Germany's Spiegel magazine found that 62.1% of German football fans were "stongly opposed" to the proposed investor deal, a figure rising to 72% among stadium-goers but sinking to 52% among those who generally watch games on television.

Some club officials including the president of third-place VfB Stuttgart, Claus Vogt, have called for a transparent revote. Others, such as Eintracht Frankfurt board member Axel Hellmann, have said that a revote would be legally unworkable.

As former DFL interim co-CEO, Hellmann led a previous attempt to secure a mandate to negotiate with private equity investors which was voted down in May 2023 following similarly vociferous fan protests.

Material from Reuters and SID was used in this report. 

Edited by: Louis Oelofse