German Bundesliga Seeks Cash to Plug 300 Million-Euro Virus Hole

(Bloomberg) --

Germany’s national soccer league is exploring options to avoid a liquidity crunch amid interest from private equity firms including Apollo Global Management Inc. and KKR & Co., according to people familiar with the matter.

The DFL sporting body is working with an adviser to consider financing alternatives following the suspension of Bundesliga matches due to the coronavirus, the people said, asking not to be identified because the information is private. It may seek to raise at least 300 million euros ($330 million) of fresh cash due to uncertainty about whether it will receive payments from broadcasters including Comcast Corp.’s Sky, the people said.

While Apollo and KKR have expressed interest in providing funding to DFL, they aren’t currently in any formal discussions, one of the people said. DFL is in talks with its broadcasting partners about various options, including possible closed-door games, and hasn’t made a final decision on which path to pursue, the people said.

Spokesmen for DFL, Apollo and KKR declined to comment.

Sky is in “constant dialogue” with DFL about the current situation in the Bundesliga and 2nd Bundesliga, according to an emailed statement. “We are actively discussing constructive solutions, including for license payments and their potential timing.”

DFL Chief Executive Officer Christian Seifert has said previously that if games can’t be played it could spell financial ruin for clubs in the country’s top soccer leagues.

German licensed soccer consists of 36 professional Bundesliga clubs. The teams generated more than 4 billion euros in revenue in the 2018-2019 season, up more than 5% on the previous season, helped by the sale of media rights, according the DFL’s economic report.

The move to suspend international games and competitions in England, Spain and Italy has got media lawyers poring over broadcast rights contracts that are a big source of income for clubs such as Manchester United, Barcelona and Juventus. All major European football leagues have suspended matches on coronavirus.

Sky, DAZN and other media companies collectively pay more than 6 billion euros a year to show Europe’s most prestigious soccer teams in action.

Scrapping the rest of the calender could expose the leagues and clubs to a liability that’s well above 1 billion euros, said Richard Broughton of media consultancy Ampere Analysis.

The lack of revenue from matches and a fear of losing broadcast fees from canceled games, has led some small and large soccer teams to explore pay cuts with their players.

Private equity has shown interest in sports before. Silver Lake in November bought a stake in the owner of the Manchester City football club and CVC Capital Partners has invested in the U.K.’s rugby league and Formula One racing.

©2020 Bloomberg L.P.

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