German soccer

Game Begins for Bundesliga TV Rights

sky andreas gebert-dpa
Now it's Sky's turn to show how successful a competitor the broadcaster is.
  • Why it matters

    Why it matters

    • The German National Football League aims to raise its revenues from the current €850 million ($949.3 million) to more than €1 billion per season.
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  • Facts

    Facts

    • The bidding process for the Bundesliga broadcasting rights is set to start in April.
    • The pay-for-view TV broadcaster Sky is investing millions in producing its own television series to become less dependent on soccer.
    • Germany’s TV market includes 42 million households.
  • Audio

    Audio

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Broadcaster Sky will face serious competition in April when the German National Football League, the DFL, opens bidding for TV broadcasting rights for the 2017-18 Bundesliga season, the top-tier league’s main revenue source.

American broadcaster Discovery and the digital sports content and media group Perform from London requested an invitation from the German antitrust agency to its most recent hearing, the business weekly WirtschaftsWoche, a sister publication to Handelsblatt, has learned. The hearing concerned important details about the call for bids.

Insiders familiar with the bidding talks expect both companies to make offers.

Bundesliga club representatives, contacted by WirtschaftsWoche, assume the league will introduce a “no single buyer” rule. Under that scheme, unlike the current situation, no single broadcaster will be allowed to purchase all rights to live broadcasts.

“In the coming four years, we intend to bring out as many as eight productions of our own in Germany. ”

Carsten Schmidt, CEO, Sky

The new rule is expected to generate much higher offers and raise the DFL’s revenues from the current €850 million ($949.3 million) to more than €1 billion per season.

It would hit Sky hard, forcing the German subsidiary of the British satellite network to pay more to win the rights. With only a brief interruption, the company has been the sole live broadcaster of German soccer-league matches for 25 years, advertising its monopoly status with the slogan “all games, all goals.”

Losing the broadcasting rights could also result in a huge loss of customers for Sky. The network is already taking precautionary measures by investing in the production of its own original TV series.

“In the coming four years, we intend to bring out as many as eight  productions of our own in Germany,” Chief Executive Carsten Schmidt told WirtschaftsWoche. At costs of up to €1.5 million per episode and eight episodes per series, the investments would add up to almost €100 million.

One of the new productions is the murder-mystery series “Babylon Berlin.” For this project, Sky is cooperating for the first time with the German public broadcaster ARD.

Mr. Schmidt is also thinking about setting up a production subsidiary. To finance the productions, he is considering selling broadcasting rights to affiliated broadcasters in Italy and England as well as to broadcasters in other markets.

Sky Deutschland is competing with U.S. companies Netflix and Amazon for attractive German content. Netflix has also announced its intention to produce its own German television series, while Amazon will be the first to broadcast the new film by German director Michael “Bully” Herbig.

Because of the investments in local productions, Mr. Schmidt expects to continue losing money in Germany despite having 4.5 million paying customers in the country. He said losses were nearly €50 million on revenues of €964 million for the first half of the current business year, which ended in December.

The company, Mr. Schmidt said, could be profitable if it sold some attractive TV rights. “But we don’t want to do that,” he said, noting continued interest in investing in soccer and television series.  “Our aim is increased growth with long-term stability.”

At about 18 percent of households, the share of pay-for-view TV is modest in Germany, compared with other European television markets.

“In the long term, we can’t be satisfied with such figures,” Mr. Schmidt said, pointing to his goal of establishing pay-for-view TV in 30 percent of the country’s 42 million households.

 

Peter Steinkirchner is a reporter with WirtschaftsWoche, a sister publication of Handelsblatt. To contact the author: peter.steinkirchner@wiwo.de

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