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SBD Global/March 1, 2013/Leagues and Governing BodiesPrint All
The German Bundesliga is one of the top int'l football leagues, and with new records in revenue and attendance, it might well be the most economically stable league in all of Europe. SBD Global Staff Writer HJ Mai recently talked to German Football League (DFL) Head of Business & Specialist Media Dirk Meyer-Bosse about the league's secrets for on and off-field success.
Q: The Bundesliga recently published the “Bundesliga Report 2013” in which it announced a new revenue record of more than €2B ($2.6B). What kind of financial numbers are still achievable for the league? What are the next goals?
Dirk Meyer-Bosse: The figures show that the Bundesliga has set its eighth consecutive revenue record. With exactly €2.081B ($2.72B), the 18 professional clubs have broken the €2B mark for the first time during the ’11-12 season. German Football League (DFL) CEO Christian Seifert said at the official presentation of the "Bundesliga Report 2013" that based on these figures the goal has to be to solidify the position and ideally continue to improve it. In addition, Seifert said that based on the result, clubs and the league can look optimistically to the future and be somewhat proud of what they have accomplished over the last several years.
Q: What are the reasons that German clubs apparently budget more responsibly than clubs in other European top leagues?
Meyer-Bosse: The liabilities of Bundesliga clubs have increased by a distinctively lower percentage than in other European top leagues. The reasons for it are widespread. An important reason is certainly our Europe-wide recognized licensing system. Another factor is that clubs continue to invest heavily in talent development. Collectively, one can outline that prudence on the expenditure side as well as targeted investments in on-field performance and infrastructure build the foundation for the successful development of the Bundesliga.
Q: The Bundesliga is arguably the most economically stable league in Europe. What is the Bundesliga’s secret, and why do other leagues struggle to reach a similarly stability?
Meyer-Bosse: It can’t be our duty to comment on the development of other leagues. A reason for the Bundesliga’s economic success is certainly that by increased revenue, increased profit and increased investments in youth academies, the overall wages/revenue ratio for players and coaches has decreased to 37.8%. In comparison, European first-division clubs have an average overall wages/revenue ratio for players and coaches of 64%. On the investment side, the youth academies take on a core role. Since ’01, every single professional football club has to have a youth academy. Since then a total of €713M have gone into supporting young talents. During the previous season, clubs have for the first time invested more than €100M ($131M) in a single season in those academies. Players who have come out of those youth academies include Mario Götze, Marco Reus, Thomas Müller and Bastian Schweinsteiger. This is the foundation for the Bundesliga’s on-field success.
Q: More than 50% of the Bundesliga’s revenue comes from sponsorship and media rights deals. Do you see any growth potential in those areas?
Meyer-Bosse: The Bundesliga has a revenue mix, which is evenly distributed on three solid pillars. These are in addition to sponsorships, which accounted for €553M ($723M) last season, income from media rights of €546M ($714M) and ticket sales of €440M ($575M). The Bundesliga is not depending on one single revenue stream. The new media rights period will start from next season on. The new deal will increase the league’s media rights revenue by 52% in comparison to the previous deal’s duration and run through ’17. For everything else, we just have to wait and see.
Q: The introduction of UEFA’s Financial Fair Play regulations makes many clubs and leagues in Europe break out in a sweat. What is the Bundesliga’s take on the issue of Financial Fair Play?
Meyer-Bosse: The Bundesliga welcomes the guidelines of Financial Fair Play. Christian Seifert has recently called for a consequent implementation of the rules.
Q: How do you want to keep the league’s average attendance of more than 44,000 per game, or do you even see growth potential in this area?
Meyer-Bosse: The Bundesliga is after the American NFL the second most-attended sports league in the world. As a matter of fact, we are No. 1 when it comes to football. This popularity is tremendous. Further records depend on which clubs are qualified to play in the Bundesliga according to existing promotion rules. This season alone, we have seven clubs playing in stadiums that fit a maximum of 35,000 people. Therefore it is a challenge to keep the current record, which is the seventh in a row, of an average attendance of 44,293 people per game. Even more so, if you consider that stadium occupancy rates in the Bundesliga are already at 93%. Clubs and the league, however, will do everything they can to continue to stay attractive for fans.
Team China Racing is the second team to "sign up for next year's environmentally friendly Formula E championship, which will feature zero-emission cars racing in 10 cities around the world," according to the AP. China Racing was officially proposed to motorsports' governing body FIA as one of the 10 teams taking part. British-based Drayson Racing was the first team to sign up, "while Rio de Janeiro and Rome are the first two cities to commit to hosting a race." The championship, scheduled to begin in May '14, will feature cars "powered exclusively by electricity." Races will be held in the streets of major cities over a course of about 1.8 miles, and cars "will travel at a maximum speed of 135 mph." China will host a race, "although the city has not yet been chosen." Race Promoter Alejandro Agag said, "China has enormous potential for the expansion of electric vehicles as a tool to fight pollution in cities. We think the FIA Formula E Championship can be a powerful tool to make electric cars popular with the Chinese public, particularly the younger generations" (AP, 2/27). China Racing Dir Steven Lu acknowledged that part of his goal, through exposure to the Formula E championship, "was to promote electric vehicles in his homeland in the hope of achieving a 15 to 20 percent usage rate by 2030" (BANGKOK POST, 2/28).
In Indonesia, while state-owned enterprises have been contributing funding to sports for a few years, the Ministry of Youth and Sports has learned through a ministerial decree that the companies "are not actually allowed to spend their corporate social responsibility budgets on sports," according to Ami Afriatni of the JAKARTA GLOBE. The decree "could mean further cuts" to the already under-funded sports programs in the country. Ministry senior official Djoko Pekik Irianto said, “We have learned that the corporate social responsibility budgets are not allowed to be spent on sports development." There were "approximately 40 companies supporting the sports federations, including Bank Mandiri, which contributed to the Indonesian Athletics Association (PASI); Garuda Indonesia, which partnered with the Indonesian Tennis Association (Pelti); and Bank Rakyat Indonesia, which helped fund the Indonesian Karate-do Federation (Forki)" (JAKARTA GLOBE, 2/28).
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