German Football Reform is Paying Off

Hi all,
SPORT+MARKT Executive Director Hartmut Zastrow published his views on the Bundesliga catching up in the race for stars. Very interesting analysis which I believe important to share with football marketers on the blog. Another great insight from SPORT+MARKT.

The Bundesliga has started the New Year with a new record. Striker Edin Dzeko has moved from VfB Wolfsburg to Manchester City FC for over EUR 30 million – the most lucrative transfer in the league’s history. The usual suspects were quick to point out that the Bundesliga still can’t hang on to its biggest stars. However, a look at the facts tells a different story.

In sporting terms, the Bundesliga is booming. It is about to overtake Italy’s Serie A in the UEFA rankings and has Spain’s Primera División in its sights. What seemed like a dream a few years ago is now becoming reality. The Bundesliga is back amongst the top 3 leagues.

At the start of 2006, the situation appeared hopeless. Shortly prior to the beginning of the FIFA World Cup, the national team wasn’t performing and German clubs were struggling in European competition. There was a lack of top players in the Bundesliga and rising domestic stars were quickly snapped up by foreign clubs. The league occupied fifth position in the UEFA rankings behind France and was in danger of being overtaken by Portugal. Insignificance beckoned.

The FIFA World Cup triggered a football boom on German soil. However, the foundations for success had already been laid. The Deutsche Fussball Liga (German Football League; DFL) and the Deutscher Fussball Bund (German Football Federation; DFB) restructured at the turn of the Millennium. For example, during the course of the reform, youth development centres became obligatory for Bundesliga clubs. The benefits are now being reaped – at club and national team level.

There has also been a shift in economic power. Italian clubs are no longer able to buy Bundesliga stars out of their contracts. In Spain, many players are not receiving their salaries and have gone on strike. The English Premier League alone is beyond reach. However, with the exception of Manchester City FC, where Arab investments have moved the goalposts, even the rich clubs have to count their pennies.

TV revenue is responsible for the financial discrepancy. The English Premier has earned almost four times as much as the Bundesliga from TV rights this season (€1.4 bill.). The DFL is currently preparing the sale of its rights for the period starting 2013.

It should be possible to generate higher revenue. However, England is not a realistic target, as marketing is not regulated as strongly in the UK. Hence, the Premier League will defend its leading position in European club football – and remain attractive for many stars. However, the Bundesliga will stay on the road to success. [Source: SPORT+MARKT]

Karl Lusbec


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