Germany’s Bundesliga pursues a global TV expansion

Christian Seifert slid behind a white-clothed table at a tony diner in the shadow of the Empire State Building and began to talk about the importance of television.

All of which sounds normal except that Seifert isn’t a TV executive, producer or star.

But as chief executive of the German Bundesliga, he has suddenly become a big fan of the medium since TV is at the center of his strategy to turn the once insular soccer league into a worldwide brand.

“Football is part of the entertainment world and the entertainment world has turned into a global business in the last five to 10 years,” Seifert said. “And soccer, as a global sport, is of course dedicated to be broadcast all over the world.”

The Bundesliga got a late start on that.

The English Premier League, the most-watched league in the world, is broadcast in 212 territories to a potential audience of 4.7 billion viewers, according to the league. That will earn the EPL an expected $13 billion in international and domestic broadcast rights over the 2016-19 seasons.

The Bundesliga? Well, not so much.

Its current TV contract brings in only $715 million domestically, about a quarter of what the EPL will get under its new deal. And although its agreement with 21st Century Fox, signed in 2013, more than doubled the Bundesliga’s international rights earnings, that still brought the league less than $200 million.

Money is only part of the equation, though, because thanks to the five-year 21st Century Fox deal that covers more than 80 territories, including North America, Brazil, Indonesia, China and Japan, the Bundesliga is seen in 209 territories.

“When I played in the Bundesliga, it was almost as if it was the secret they wanted to keep between themselves,” said Fox soccer analyst Ian Joy, who played for three German teams between 2004 and 2010. “It was almost as if they had the mentality that they didn’t need people’s help to really grow the league.”

Social media, the Internet and the explosion in rights fees changed all that. Social media and the Internet because it opened a competition between all leagues to introduce their players and teams to a global audience, a competition in which the Bundesliga is doing well.

The massive increase in TV money paid to the EPL and Spanish clubs Real Madrid and Barcelona, on the other hand, left the German league at a disadvantage in recruiting players.

“We have to grow globally because the others are doing it,” Seifert said. “It’s about the money that comes into the league. Also for clubs like Bayern Munich, if you sell a shirt, no matter where around the world, it’s a good thing.

“In the past the Bundesliga was very conservative in going outside its own market. Which is a problem because a Brazilian player, if he plays [in Germany], he wants his family to be able to watch the games. So broadcasting everywhere helps you.”

If it was to grow, the Bundesliga really had no choice but to grow globally since it has few opportunities to increase its revenue at home. While top teams in the EPL, France’s Ligue 1 and elsewhere are owned by deep-pocketed foreign tycoons and Middle Eastern billionaires, Bundesliga rules require its 18 clubs to be majority-owned locally, by club members.

And although the average attendance at Bundesliga games is more than 43,000, second only to the NFL among sports leagues worldwide, the average ticket costs less than $25. In the EPL, the cheapest ticket sells for more than $33.

That adds up, with Seifert saying EPL giant Manchester United will make at least $30 million more than Bundesliga champion Bayern Munich in ticket sales this season. And that’s not likely to change since many Germans view their soccer league as a civic resource, not a private business.

“Seventy-five percent of all Germans say the Bundesliga belongs to Germany and is important to society,” Seifert said. “You can be one of the best leagues in the world and fulfill a societal role. But it’s getting harder.”

Which gets the subject back to TV. The timing for the Bundesliga to sell itself outside Germany couldn’t be better given that the Geman national team is the reigning World Cup champion. Plus the Union of European Football Assns. ranks the Bundesliga as the second-best league in Europe behind Spain’s La Liga and Bayern Munich is rated as the second-best club, behind Real Madrid.

“It’s become so big and so popular … their mentality is now that they see that this is a sleeping giant. It’s waiting to explode,” Joy said of the Bundesliga. “And now they have the opportunity to do that on a global level.”

So far, the broadcasters and the Bundesliga appear happy with their marriage; the league because it’s getting increased attention and revenue ($3 billion from all sources this year) and its new TV partners because they’re getting viewers.

“We’re pleasantly surprised,” said David Nathanson, head of business operations for Fox Sports.

In the first months of the Bundesliga deal, Fox showed most of the games in the U.S. on cable outlet FS1, where it has averaged 57,000 viewers. But after a tape-delayed September game between Bayern Munich and Augsburg drew nearly 1 million to Fox’s broadcast channel, the network said it would show eight Bundesliga games live on Fox this winter and spring.

“That proves that if you give it a broad audience, there’s interest in the league, there’s interest in the players and the top teams,” Nathanson said. “We believe there’s a lot of upside in the Bundesliga.”

And Seifert believes there’s a lot of upside in TV.

“Today there is no single market,” he said. “The market is the world.”