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Bundesliga matches sporting success with commercial gains

, May 22, 2013, 0 Comments

german-football-bundesligaBorussia Dortmund and Bayern Munich will square off in the Champions League final at Wembley. Saturday’s game is the best evidence of a general resurgence in German football and the Bundesliga.

This year’s UEFA Champions League Final (25.05.2013) between Borussia Dortmund and Bayern Munich at Wembley Stadium will be watched by hundreds of millions of television viewers in a total of 209 countries.

Among them, most likely, will be the envious eyes of players and officials from clubs like Real Madrid, Barcelona, Manchester United and Chelsea, some of the teams more commonly considered the commercial heavyweights of world football.

However, the players who will be chasing the ball on the pitch at Wembley ply their trade in the German Bundesliga – a league whose teams don’t quite belong to the commercial top flight of international soccer, with the probable exception of Bayern Munich.

For German clubs, reaching the Champions League Final was equivalent to hitting the jackpot, said Henning Vöpel, economist with Hamburg Institute of International Economics (HWWI), as he calculated the projected spoils for this year’s finalists.

“UEFA’s base fee awarded for CL qualification is 8.6 million euros ($11 million). On top of that come fees for wins and draws, as well as for reaching the knockout stages. All in all, the Champions League winner might earn up to 60 million euros,” he told DW.

Dortmund vs. Bayern

Even if Dortmund were to lose the final to hotly-tipped favorite Bayern Munich, it would only make a 4-million-euro dent in the club’s record earnings for the season. Borussia Dortmund had earned almost as much as Bayern this season, Völpel said, and was able to close the wealth gap between the two clubs a little bit, but of course not entirely.

Noting that the two clubs’ finances were still ways apart, he estimated that Bayern had the means to spend 125 million euros on the team this year, with Dortmund’s transfer budget just being in the region of about 50 million euros.

And indeed, the estimated market value of Bayern players is almost twice as high, at 430 million euros compared with Dortmund’s 254 million euros. In addition, the Munich-based club has double the number of members and Bayern’s club-owned television channel has subscribers in 90 countries, while Dortmund sells its program to supporters in 12 nations.

Growing interest in the Bundesliga

In the opinion of commercial sports analysts, the all-German CL Final at Wembley will also raise international interest in Germany’s top professional football league, the Bundesliga, with its18 clubs.

“The league will move into the spotlight of international sports marketing, improving the possibilities for selling commercial broadcast rights,” said Sascha Schmidt, analysts with the European Business School (EBS).

The German revenue distirbution model would ensure that all clubs got a piece of any enlarged pie, but the performance-related bonuses also mean that the major clubs generally fared best, Schmidt said.

Moreover, ongoing success in European club tournaments should help ensure that German clubs maintain three guaranteed Champions League qualification spots and another qualification berth. This is part of UEFA’s coefficients system, whereby domestic leagues are granted differing numbers of places in European competition, depending on their teams’ comparative succes on the continent.

Fans without borders

Apart from UEFA fees, rights marketing and sponsorship deals, merchandising has become an ever bigger part of a club’s revenue. Meanwhile, club paraphernalia are being sold worldwide and not just in the fan shop on the stadium corner.

EBS analyst Sascha Schmidt called them globalized supporters or fans without borders, because more and more soccer enthusiasts would rally behind club colors from other countries, too.

“In Europe alone, we estimate that some 41 million so-called fans without borders have their favorite club outside of their own country,” Schmidt said, claiming that each of these global fans would spend an average of 860 euros on club merchandise per season.

European football is in high regard especially with supporters in Asia, where primarily English clubs such as Manchester United, Arsenal London and FC Liverpool have been making huge profits in the past two decades.

Germany’s main clubs were less well known, said Sascha Schmidt. But the upcoming CL Final would be a perfect springboard to bigger merchandising success in Asia, he added.

Competitive advantage

Moreover, Schmidt said German soccer teams would further benefit from UEFA’s still comparatively new financial rules designed to stop clubs running up unserviceable debts. Financial Fairplay, as the new regulations are called, is supposed to prevent clubs from covering their budget shortfalls through cash injections by rich club owners. The gradual implementation of these rules, which have met heavy resistance, is meant to take another step forward next season.

Noting that most clubs in Europe would therefore need to consolidate their finances next season, HWWI’s expert Henning Völpel said German clubs would then have a competitive edge over them. Hesaid that since German clubs had been subject to rigid budget controls and licensing procedures for many years, sound club finances would foster success on the pitch for German teams in the future.

Source: Deutsche Welle |