Bundesliga pulls out of Kirch deal

Germany’s national soccer association DFL will allocate the TV rights for the Bundesliga from the 2009/10 season on its own. The contract with Leo Kirch’s company Sirius SportMedia has been cancelled.

“With its conditions, the cartel office has withdrawn the foundation of the planned collaboration,” the league’s president Reinhard Rauball said in Frankfurt. “After considering all options, our executive board has decided to cancel all contractual relations.” The tender will commence at the end of October with the allocation of the rights to be finalised by the end of January 2009.

The decision will most likely not end up in a legal battle. “We totally understand the league’s decision under the given circumstances and wish DFL good luck for the marketing of the Bundesliga rights,” a Sirius spokesman said in Munich. Kirch’s company wants to continue operating in the field of sports rights marketing.

The termination of the agreement had been expected after the cartel office signalled that it would only approve the centralised allocation of the TV rights through DFL and Kirch under the condition that the highlights of Saturday’s matches would be shown on free-TV before 20.00 CET. This condition was turned down by both partners.

Kirch wanted to guarantee DFL an average income of €500 million per season between 2009 and 2015 – €3 billion in total. Pay-TV broadcaster Premiere said it was prepared to pay a higher price for the rights if granted more exclusivity. However, this would have only been possible if the free-TV coverage had been pushed back into a later Saturday night slot.

Industry observers now expect the TV coverage situation to remain unchanged with public broadcaster ARD showing Bundesliga highlights in its popular Sportschau programme aired early on Saturday evening and Premiere transmitting all games live. However, it remains to be seen whether DFL will again be able to achieve a total income from the TV rights sale of €420 million per season as has been the case in the last three seasons.

The good news for Premiere is that the pay-TV operator, which recently sank deeper into the red, most probably won’t have to put more money on the table for the rights. However, the bad news is that, without higher exclusivity, it will be more difficult for the broadcaster to attract new customer groups to pay-TV.