The German Bundesliga shows the red card to private equity money

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Top German soccer clubs have voted against the sale of a stake in the league’s media and commercial rights to private equity firms, marking the second time they have refused to withdraw cash from financial investors.

The plan to sell a stake in media rights failed to secure a two-thirds majority of the 36-member Deutsche Fussball Liga (DFL), the head of the DFL’s supervisory board said on Wednesday. The DFL operates the top two German leagues.

“The majority of the clubs voted in favor of the project, but four votes short of the two-thirds majority desired by the DFL executive board, and to continue talks with investors,” said the Borussia Dortmund chief executive and the supervisory board of the DFL. said boss Hans-Joachim Watzke.

Interim managing director of the DFL, Axel Hellmann, added that some members expressed surprise at the outcome of the vote.

The failure to secure the backing of the DFL is a major blow to a group of private equity firms including Blackstone, Advent International and CVC Capital Partners, who were racing to buy a 12.5% ​​stake in the media rights business , according to sources familiar with the matter.

Had a two-thirds majority been secured, negotiations with the bidders could have continued.

The private equity push into football media rights has divided opinion between fans, leagues and clubs. Wednesday’s vote drew a small group of protesters outside the hotel where it was held. They were against the DFL taking money from private equity.

France’s Ligue 1 and Spain’s La Liga have both previously sold stakes in their media rights to CVC Capital Partners. CVC’s €2bn funding deal with La Liga was also rejected by some clubs, including Barcelona and Real Madrid, but completed nonetheless.

Italy’s Serie A has abandoned a €1.6bn deal to buy a 10% stake in a new company handling Serie A broadcasting rights, after opposition from the clubs.

The botched sale in Germany marks the second time the DFL has voted against the private equity money. In 2021, the league voted to withdraw from talks to sell a stake in a new media company that would hold the rights to broadcast Bundesliga matches outside Germany.

That trial has attracted interest from a number of private equity firms, including CVC and KKR, among others, the Financial Times previously reported.

The league again kicked off talks to sell a stake to investment firms earlier this year and has attracted interest from some of the biggest names in the buyout industry.

Any deal would have been a rare bright spot for companies that have seen deal activity plummet so far this year. Concerns about the broader macro environment and lack of access to debt financing weighed on trading globally.

The decision took some of the bidders involved by surprise, people familiar with the matter said, and the second rejection raises questions as to whether the rights will again be offered for sale.