Television Distribution Threatens Competitiveness of the Bundesliga

Manuel Veth –

FC Bayern München are the richest club in the Bundesliga, and thanks to the Bundesliga’s television distribution deal are likely to remain the richest in the league for the foreseeable future thanks to the television distribution agreement, which in turn will create a major problem for the league’s competitiveness.

The Deutsche Fußball Liga (DFL) distributed €980 million from the national and €206.4 million from the international television deal among the 36 Bundesliga clubs. The Bavarian giants received €95.84 million from the DFL this weekend. That is almost €10 million more than Germany’s second biggest club Borussia Dortmund. Die Schwarz-Gelben, who finished last season in third place, received €86.5 million.

Thanks to a discrepancy in the television distribution deal Bayern are virtually guaranteed a monopoly over the Bundesliga. (Photo by Alexandra Beier/Bongarts/Getty Images)

Meanwhile, RB Leipzig, who finished the league in second place last season, only received the least amount of money from television distribution. Die roten Bullen had to content themselves with €28.78 million and last place in the television distribution table.

Television Distribution Deal in Germany Causes Discrepancy

The reason for the discrepancy of €68 million between the first placed team and the second placed team of the 2016-17 Bundesliga season is because 23% of the television revenue is distributed according to a five-year coefficient table. Other factors also include sustainability, which is, in essence, a 20-year coefficient table that makes up 5% of the overall distribution. The final 2% are distributed according to youth development. In those standings, Bayern have been first over the last five years followed by Borussia Dortmund, Schalke 04 (€77.94 million) and Bayer Leverkusen (€76.95 million).

Leipzig in the meantime are last on the table because die roten Bullen are last in the DFL’s coefficient table. The newly promoted sides Hannover 96 (€38.15 million) and VfB Stuttgart (€39.67 million) are ranked 17^th and 15^th.

The television distribution deal is a bit more even in the England. The English Premier League distributes 50% of the television income evenly among all clubs, 25% are distributed according to the final league standing, and the last 25% are distributed according is given out to clubs for live televised matches in the UK. Overseas income in the meantime is 100% evenly divided among all clubs.

Thanks to this contribution deal the champion in England only receives about a third more from the national television deal than the club that finished last. Under no scenario would a team that finishes second receive only one-third of the television money that a first placed club receives, as it is the case in Germany.

The Television Deal Hands Bayern the Top Spot

Finally, the DFL distribution system guarantees Bayern the biggest share of the television deal even if the Bavarians fail to secure the title. Hence, it is no surprise that Bayern München has virtually guaranteed itself a spot in the Bundesliga top two for the foreseeable future. In fact, this sort of distribution makes it hard to imagine any club to threaten Bayern’s hegemony over the league without the help of outside financial contribution.

The kicker recently titled that Leipzig, in the long run, can only threaten the Rekordmeister thanks to the financial assistance by sponsor/owner Red Bull. Other club’s in the meantime have also recognised that they will not be able to shake on Bayern’s throne based on television money alone. VfB Stuttgart has recently made structural changes to the club and brought in investor Mercedes-Benz.

Bundesliga 2 champions Stuttgart have recently signed an investor deal with Mercedes-Benz. (Photo by Matthias Hangst/Bongarts/Getty Images)

With that sort of money, Stuttgart should be more competitive than the average promoted side in the Bundesliga. At the same time, it is unlikely that der VfB can challenge Bayern in the short-run despite the fact that the club is based in a city that has the same economic pre-requisites then the city of Munich.

The Current Model is the Biggest Threat to 50+1

It is, therefore, no surprise that many clubs have opened their doors to investors and in some cases have even contemplated abolishing the 50+1 rule. The 50+1 rule, however, has been the basis of Germany’ football success and the source of relative financial stability. Furthermore, the recent chaos at TSV 1860 München involving their investor Hasan Ismaik highlights the dangers of abolishing the rule.

Ismaik has recently handed in a complaint against the practice at the Bundeskartelamt (federal cartel office). In his infinite wisdom it, however, appears that Ismaik may have handed in the documents at the wrong office and that the Jordanian’s complaint could fall through. But at the same time, there are indications that this rule will fall sooner or later. Especially, if Bayern continue their stranglehold over the league.

The example of 1860 München shows the problems that investors can cause in professional football. (Photo by Alexander Hassenstein/Bongarts/Getty Images)

One way to ensure that clubs, and their sponsors, remain positive towards 50+1 would be to provide a fairer television distribution deal in German football. Regarding competitiveness, it would be the best to give the club that finished bottom of the table the most money rather than the least. This model, which is similar to the draft in North America where the bottom teams receive early draft picks, would guarantee that any team in the league could compete for a top spot any given year.

Of course, such a television distribution model is a utopian model for the Bundesliga. The top clubs in the league would never agree to such a deal even though it would financially benefit the league in the long run. Hence, even an even distribution or the model that is used in the English Premier League would already be an improvement for the Bundesliga. Because one thing is for certain the current television distribution deal will lead to an ever increasing gap between the top and the bottom of the league, which will likely bring an end to the traditional German football model.

Manuel Veth is a freelance journalist and social media junior editor at Bundesliga.com. He is also a holder of a Doctorate of Philosophy in History from King’s College London, and his thesis is titled: “Selling the People’s Game: Football’s transition from Communism to Capitalism in the Soviet Union and its Successor States,” which will be available in print soon. Originally from Munich, Manuel has lived in Amsterdam, Kyiv, Moscow, Tbilisi, London, and currently is located in Victoria BC, Canada.  Follow Manuel on Twitter @ManuelVeth.