DFL: Failed investor deal - The deal is dead, the conflict is alive

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Fan of Borussia Dortmund

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The day after, the first clean-up work begins. On Wednesday, the necessary two-thirds majority for the entry of an external investor into the Bundesliga failed due to the vote of the general meeting of the German Football League (DFL).

It was a decision that very few had expected in advance, including the responsible DFL leadership. Chairman of the supervisory board Hans-Joachim Watzke and his managing director Axel Hellmann, who had driven the investor process, reacted visibly piqued to the voting behavior of the clubs that had not spoken out in favor of the deal.

So what's next now that the investor process has been halted for the time being? We summarize the most important questions and answers here.

What was the proposed deal about?

If the plan of the DFL leadership had come through, 12.5 percent should go to an external investor for a term of 20 years. The DFL had promised around two billion euros from this.

In order to pursue the possibility of raising capital, two-thirds of the eligible voters would have had to vote in favour of the plan – that would have been 24 clubs. But they did not come together, 20 clubs agreed, eleven against, five abstained. "The trial ends today," Watzke said afterwards.

Who voted and how?

The vote was secret, but it is known from some clubs. Numerous top clubs voted in favour of the proposal: Bayern Munich, Borussia Dortmund, Eintracht Frankfurt, Union Berlin. Borussia Mönchengladbach has also made a clear commitment to its yes to the DFL plan. Prominent opponents included relegation-threatened clubs VfB Stuttgart and Schalke 04, 1.

How did the proponents react?

On the verge of being offended. Interim managing director Axel Hellmann painted the scenario on the wall: "With every year that passes, with every investment that other leagues make, it becomes more and more difficult for us."

Watzke was even more explicit in the press conference after the vote, describing parts of the criticism of the deal as "total bullshit" and complaining that the vote jeopardized the solidarity of the big clubs with the rest of the league. In parts of the press conference, one had the impression that BVB boss Watzke was speaking here and not the president of the German Football League, who has to represent the interests of all clubs.

Bayern Munich CEO Oliver Kahn said: "Now there is a risk that the gap to England and Spain will continue to grow. And that would be detrimental to all clubs, the bigger and the smaller." In the case of the envisaged model, the larger clubs would have shown a lot of solidarity with the smaller ones, so Kahn also hit Watzke's notch.

Schalke 04 formulated the position of the opponents of the deal: "At this point in time, there are too many unanswered questions – including the business plan, new management and the distribution mechanism." The clubs with strong fans, "which contribute to attractiveness beyond sporting success, should be given greater consideration in the distribution". A club with a lot of fans is: Schalke.

Why aren't there any further negotiations?

The harsh reaction of the DFL leadership to end the issue of investor entry completely and immediately after this vote has irritated some in the DFL. After all, the majority of clubs that abstained or voted no are not against investing in the league in principle. Rather, it was the way in which the DFL bagged the deal and, above all, communicated it that met with criticism from the clubs. But Watzke and Hellmann have made it clear that they no longer see any chance of discussing the investor model in any way.

Why is the league so divided?

German football is in the midst of a distribution battle. The priorities have always been clear: the big clubs are also the ones that get the most, with the argument that they also do the most for the reputation of the league through their international appearances. So far, the small clubs have always accepted this when it comes to distributing TV money. However, the fact that the planned investor deal would be the same again and that the big players would have been able to skim off the cream again has apparently angered many club representatives in the DFL.

Long-time DFL boss Christian Seifert was not at all surprised by the conflict, as it manifested itself in the vote: "In the Bundesliga, about ten clubs have international ambitions," said Seifert, but the league association consists of 36 clubs - and most of these 36 are not so important to foreign marketing and international comparison with Spain or Italy.

Seifert, who has earned a reputation as a shrewd manager during his DFL years, but who has also been accused of having made politics for the potent clubs, has now also made a decision: The decision against an investor will "lead to a few clubs having an even harder time internationally," said the 54-year-old.

Are there any winners of this decision?

The investor deal case was mostly described as a failure on Wednesday. But of course you can also fence the whole thing from the other side. The weeks-long protest of the fans in the stadiums, the criticisms that the smaller clubs have collected in the previous weeks, have obviously had an effect. Those who have always believed that German football should concentrate primarily on itself, on making competition attractive internally, rather than putting international competition at number one, feel vindicated.

What other ways to raise money are there?

Negotiations with the private equity firms that had expressed interest in the deal have now come to an abrupt end. The league will now once again discuss what other financing models are possible for the future. 1. FC Köln had already brought the variant into play in advance to raise the money through bank loans and thus retain control over its own business.

On Wednesday, however, Watzke once again argued vehemently against this and announced his resignation as DFL boss in this case. He had to be "humiliated by banks" during the restructuring of Borussia Dortmund in the noughties, and he would not let that happen to him again.

Where do we go from here?

The DFL will first have to look for a new managing director, with Axel Hellmann and Oliver Leki stepping down on 30 June. Bayern CFO Jan-Christian Dreesen is being traded as a possible successor. However, since he is also being discussed as a possible new Bayern CEO, the personnel is still completely unclear. It is also unclear whether there should be one or two managing directors. The failure of Hellmann's and Leki's predecessor Donata Hopfen had fueled a discussion about the leadership structure in the DFL, which is tailored to a single figure.

One thing is clear: the new DFL leadership will have a lot to do with curbing the diverging forces within the governing body that have become visible to everyone as a result of this vote.

In his first reaction, Watzke had even hinted at the termination of the solidarity community of the clubs in the 1st and 2nd leagues, and his statements that "no one should come to him with solidarity issues" in the near future were also taken as a threat to the smaller clubs that the big clubs could look for their own sources of money.

It is also a clear hint from Watzke to the new regulation of TV rights, which is due from 2025. The fact that the big clubs then no longer show much consideration for others is a threat. On the other hand, the top clubs have so far shown little effort to get out of the package solutions. Because that's how they've always done well with it so far. The fact that it is always a better business if you market on your own is only an assumption so far.

Bayern Munich and BVB are certainly not dependent on the DFL, but at the same time they have always avoided an open break with the Bundesliga, as can be seen from the example of the debate about the Super League, when the German clubs quickly positioned themselves against the construct.

The threat, if you don't participate, we'll leave the Bundesliga, can be built up at any time. However, this step is not yet very likely. Two years ago, the Super League collapsed too much after just a few days.