German professional football clubs have been in a long-standing dispute over the distribution of TV money with the governing body. However, a recent unanimous decision by the executive committee of the DFL (Deutsche Fußball Liga), which governs the top two tiers of German football, has brought about an agreement that factors in wider sustainability elements.
The DFL announced on Monday that future media revenue distribution would consider factors such as TV reach and club membership numbers. This move was largely influenced by historic second-tier clubs like Schalke 04 and Hamburger SV, who advocated for public interest in their respective clubs to be given more weightage in this deal. Under this new model, a club’s current and historical popularity will be considered under a category termed “public interest.” However, contrary to what league giants hoped for, this element will only account for 3% of total revenue from the deal.
DFL released statement:
“The current distribution key has proven itself in international comparison; it provides incentives for sporting performance and growth, and at the same time follows the principle of solidarity in a league of 36 clubs.”
Starting summer 2025, all first- and second-division clubs will receive €1.1bn per year from TV marketing. The media revenues are distributed across four pillars- Income distribution (50%), Performance (43%), Talent development (4%) and Public interest (3%). Despite these changes, it was confirmed that the 80:20 ratio between Bundesliga and second-tier remains unchanged.
Endorsement & potential impact on English football
Borussia Dortmund managing director Hans-Joachim Watzke endorsed this new model as a "good development" in what is already an established concept of distribution. He suggested that if implemented similarly in England it could enhance long-term viability of their game too.
In contrast to Germany's approach where fan following is factored into revenue sharing agreements; Premier League distributes its TV income based on equal share among top tier clubs(50%), number of television appearances(25%), and club's league position(25%). Overseas broadcasting monies are equally distributed among the clubs. The TV rights package for England’s second-tier, the EFL Championship, currently consists of guaranteed payments of £895m (€1.3 billion) and £40m (€58.5m) in marketing rights until the end of 2028/29 season. Unlike Germany, where leagues beneath second tier have a separate deal, England's TV rights deal benefits all tiers.
Despite an improved TV deal with Sky TV and ESPN that led to a 46% increase in media income for England’s second-tier clubs, concerns about media income distribution persist. In 2020, historic clubs like Leeds United threatened to form a breakaway league due to these issues.
Need for change
Historic English clubs with large fan bases such as Wigan Athletic and Portsmouth FC have faced financial difficulties over the past decade. Allocating an additional 3% of media rights income to these popular clubs under a "public interest" category similar to Germany could potentially improve their long-term viability.
Clubs like Leeds United and Sunderland who have won first-tier titles would also benefit from this change along with other popular second-tier teams like Sheffield Wednesday and Middlesbrough. An additional payment for attainment would be beneficial for all those football clubs that have successfully developed strong follower bases such as Southampton FC and Watford which boast millions of followers on Instagram alone.
As discussions around introducing a football regulator in English game continue in parliament's upper chamber - House of Lords; considering factors like history & popularity while distributing revenues could ensure long-term viability for historic English football clubs.
