Bundesliga TV Rights Deal Suggests a Softening Market - The New York Times

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Germany’s top soccer league continues to be a bellwether for sports.

The Bundesliga’s return to action in May after a two-month hiatus caused by the coronavirus pandemic gave other big leagues the courage, and also some helpful guidance, as they pressed forward with their own returns. Now the Bundesliga has become the first major European soccer competition to sell its domestic broadcast rights since the coronavirus outbreak.

The clues from Germany this time are far less reassuring.

The sale, which covers four years, starting with the 2021-22 season, generated less than the record 4.6 billion euros ($5.1 billion) the Bundesliga earned under its current agreements, but not by a significant amount, according to two people with knowledge of the sale, which will be announced on Monday. The pool of broadcasters narrowed in the new deal, too, with all the games divided by Sky, the longtime incumbent, and the streaming service DAZN.

The Bundesliga, DAZN and Sky Deutschland all declined to comment on the deal.

The modest decrease in the new deal could be encouraging for leagues and clubs nervous about the game’s financial future. But the reduced fee — and the smaller pool of interested bidders — could also be a worrying harbinger for dozens of other leagues and broadcasters as they head into negotiations uncertain if games will be played on schedule, in front of fans — or even if they will take place at all.

The Bundesliga sale took place against a backdrop of empty stadiums and unusual summer schedules as leagues raced to complete their suspended seasons to meet spectator demand and — perhaps more crucially — to limit the risk of nonpayment from their broadcaster partners. (The Bundesliga has yet to resolve a multimillion-dollar dispute with Discovery Inc.’s Eurosport, which pulled out of a contract to show games it had been contracted to broadcast.)

While the sale offers a sign that premium sports properties are likely to command large fees even amid a bleak outlook for the wider global economy, it could also mark the end of a yearslong inflationary bubble for elite level sports programming. The value of the current Bundesliga deal, for instance, had represented an 85 percent leap from when the rights were last sold for a four-year period.

The impact of the pandemic almost certainly played a part in dulling the demand for soccer rights in Germany, but also in other key European television markets like Britain, Italy and Spain, which are typically the most sought programming. Only last year, Christian Seifert, the Bundesliga’s chief executive, predicted his league would continue its upward march, saying he anticipated broadcasters and digital upstarts like DAZN would be prepared to spend even more.

“The German pay-TV market still has a lot of room to grow,” Seifert told the Financial Times last year.

Ultimately, that did not prove to be the case. But it could also have been worse, given cost cutting plans at Sky and what appears to be the absence of strong bids from Amazon and Deutsche Telekom, two companies that had been rumored to be preparing to compete fiercely for games.

Sky managed to secure the main Saturday night game, appointment television in Germany that is akin to Sunday and Monday night N.F.L. games in the United States. But in what could be a sign of the belt-tightening measures imposed by its new owner, Comcast, Sky secured six games per week, two fewer than it currently airs.

DAZN has doubled down on its bet in Germany, where starting in 2021 it will also be the country’s main Champions League broadcaster. The company has been burning through cash as it seeks to build its subscriber base, but it has shown little sign in slowing even as it has lost more than $1 billion in the past two years.

Germany, along with Japan, is the streaming company’s biggest market. DAZN will exclusively show games on Friday nights and Sunday, while Sky’s matches will be largely limited to Saturdays.

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Bundesliga TV Rights Deal Suggests a Softening Market - The New York Times
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