Billion dollar poker game for Bundesliga: Why the battle between Sky and DAZN suddenly pleases the clubs

Billion dollar poker game for Bundesliga
Why the battle between Sky and DAZN suddenly pleases the clubs

25.09.2024, 21:40

After the arbitration ruling in the dispute between DAZN and the German Football League (DFL), the clubs could be the big winners. Instead of the long-term fears, revenues are now actually increasing. But there is still a long way to go.

There was no sign of a bad mood among the club bosses when the executive committee of the German Football League (DFL) had to prepare the new edition of the billion-dollar poker game. After the arbitration ruling in the dispute between the league association and the streaming provider DAZN, the executives quickly realized that their clubs could become the big winners.

The necessary restart in the awarding of media rights has shifted the starting position clearly in favor of the 36 first and second division clubs. While the club bosses had feared a loss in revenue before the auction originally started in the spring, it now even seems possible that they will make a profit. The reason for this is simple: since DAZN and competitor Sky already know before the auction restarts what the other offered for the coveted rights package B in the first attempt, the DFL can now expect higher offers. The league association can rely on the fact that both applicants are keen to acquire the package. The reactions of the competitors to the arbitration ruling allow this conclusion to be drawn without question.

There are a total of 196 parties per season

“We remain convinced that DAZN is the best partner for the DFL, for the clubs and for German football fans,” DAZN said. Sky was even clearer: “We are very well positioned for the media rights award and are confident that we can continue to offer our viewers the best Bundesliga experience and remain the leading sports provider.”

Specifically, Package B includes the Saturday games at 3:30 p.m. as well as the individual matches on Friday evening and the relegation round – a total of 196 games per season. In mid-April, the DFL suspended the auction of the German-language media rights for the four seasons from 2025/26 to 2028/29 due to the dispute with DAZN, which, like Sky, still holds the live rights until the end of the current season.

DAZN felt discriminated against because its offer was rejected, even though it was “the most financially attractive and convincing”. The bid was said to have been 400 million euros per season – a total of 1.6 billion euros. However, the DFL does not accept the financial guarantees given by DAZN. This is why Package B is said to have gone to Sky despite a lower offer (allegedly 320 million per season).

There is another catch for DAZN

DAZN then appealed to the arbitration court – and was able to feel like a winner thanks to the rescheduling of the auction. The DFL nevertheless announced in the evening after a board meeting that it would accept the arbitration award. However, it would only decide on the next steps “after further legal assessment in the coming days”.

In addition to Sky’s challenge, there is another catch for DAZN: It is certain that the DFL will explicitly demand a new bank guarantee in the auction regulations. The league association will “take this into account” and in which cases “security or confirmations” could already be required in the auction, it said in a statement. In contrast to the first attempt, DAZN has to overcome this hurdle.

And there is something else that plays into the hands of the clubs, for whom the money from the media contracts is by far the largest source of income: the announcement of the bids and the obvious high value of the rights for the interested parties could attract further applicants. This would be more than offset by the delay in terms of planning security. The total proceeds from the increase could exceed expectations – the clubs currently receive around 1.1 billion euros per season. However, how many subscriptions the fans will need and what they will have to pay for them is just as up in the air before the restart as it was at the first attempt.