FRANKFURT, May 12 - Germany's top-flight soccer league has drawn up a shortlist of Buyout funds, including KKR and Bridgepoint, to buy a 25% stake in its overseas broadcasting rights, people close to the matter told Reuters.
The German private equity firm CVC also entered the second round of the auction that will value the overseas broadcasting rights of the Bundesliga at about 2 billion euros, said sources.
On 19 May the league's soccer clubs will meet to vote on the plans, with a two-thirds majority needed to move into the final phase.Binding bids would be expected by the end of June with a deal planned in July, sources added.
The German Football League, which organises the nation's top two leagues, and bidders declined to comment.
The stake sale, which could be worth up to 500 million euros, would attract large investors into one of football's biggest leagues at a time when they are contending with a fall in revenue.
Earnings have shrunk because the Bundesliga is forced to stage matches in international stadiums during the COVID 19 pandemic and empty TV networks are struggling with lower advertising revenues from customers.
In the upcoming two decades of the DFL, the DFL in Germany placed a 25% stake in a newly created company managing broadcast rights outside Germany for more than the next 25%.
While a new investor would bring much needed cash to the table, not all football clubs are in favour of sharing proceeds with a buyout group in more than two decades, sources close to the matter said, adding that companies like Borussia Dortmund have already expressed concerns.
An additional set of clubs in Italy have the sought after the sale of a stake in the broadcasting rights of the Serie A soccer league to buyout firms CVC and Advent.
The overseas broadcasting rights business of the DFL is expected to generate revenues of 230 million euros in 2020 21 with sales projected to grow in the 2029 season by about 8% annually to reach 478million in the 2027 season.According to people close to the transaction, distributable income will increase from 161 million to 385 million annually over the same period.
The DFL is promoting the unit as a private equity play in order not only to obtain their share of the rights, but also to benefit from commercial partnerships with companies like Tipico betting group Mondelez or Amazon Web Services.
The company also sees potential in over-the-top content platforms that stream content like BundesligaPass directly to consumers.
A virtual Bundesliga, organised together with partners like EA or the Esports Group ESL would be on top of the sales expected from the media company's business.What are some of the potentials of becoming an adult in this world?