European soccer leagues are losing revenue in the hundreds of millions due to the Corona pandemic. Now the leagues in Germany, Italy and Spain want to set up marketing or tech companies together with private equity firms to generate new revenue in the long term.
“There’s a lot, a lot of money in markets around the world right now. At the same time, investment opportunities are very reduced. That means capital is now actually looking for lucrative investment.”;
“In this respect, it comes as no surprise that capital providers are now entering soccer, because it naturally forms a very suitable platform internationally, on which, in addition to quite a lot of soccer, can still take place in the future. And here, international capital is looking for and finding the form of investment that promises returns in the future.”
describes Henning Vöpel, director of the Hamburg-based WeltWirtschaftsInstitut.
And meets a soccer landscape that must respond to the financial consequences of the Corona pandemic.
With the help of investors, then, among other things, revenue losses in foreign marketing are to be compensated for in the long term. Subsidiary Bundesliga International currently markets Bundesliga and 2nd League rights abroad and has suffered revenue losses due to the pandemic and changes in the market. From 250 million euros, revenues have dropped to 200 million. As a strategic development, a digital content platform is to be built to increase revenue in the long term. The expected costs are at least 200 million euros. Some of the future revenues would then have to be shared with investors. But the alternatives are significantly less attractive. Either the DFL would have to forego innovative further development. Or it would have to finance such a development from its own funds, which would mean in effect: The clubs would have to do without the income from the sale of international media rights for a season. No club can afford that at present.
The Serie A has already implement exactly this. The Italian league has sold ten percent of a newly founded marketing company for national and international media rights. The investors will pay 1.7 billion euros. For league boss Paolo Dal Pino, this investment is important for further raising the profile of the Serie A brand worldwide.
But there are also other alignments, explains economist Vöpel:
“We know that in the digital economy, in the digital economy, it’s all about data, about platform and reach, so that’s a vehicle, which doesn’t come as a surprise and that, at the same time, will certainly characterize the competition, between the leagues in the future.”
The best example is the Spanish league. The latter wants to sell shares in its subsidiary LaLiga Tech. The company offers digital services, and so far 70 other sports organizations are using the service. Among others, MotoGP promoter Dorna and the Belgian professional league are supplied with anti-piracy tools. Initial talks with the league are already underway, with investors looking to acquire up to 60 percent of LaLigaTech.