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Joint selling and antitrust in the Bundesliga

2008 March 11
by Skip Sauer

The new TV contract for the Bundesliga, like many in the States and elsewhere, is a joint selling arrangement, although revenue sharing appears to be more complicated than a simple 1/N rule. This sets the stage for a massive wrangle over just what the shares will be, with redistribution from the large to small clubs being the key issue. Enter the antitrust agency:

A new lucrative television contract for the Bundesliga was criticized by Germany’s anti-trust agency on Monday.

The federal office said the €3 billion (US$4.5 billion) contract will only be allowed if small clubs are awarded more money. The agency has investigated the central marketing policy of German top division clubs for several years.

“Central marketing of media rights has the same effect as controlling prices,” Ralph Langhoff, an anti-trust agency official, was quoted as saying in the trade magazine Kicker.

Media mogul Leo Kirch’s new company, KF 15, has offered the Bundesliga a sizable increase in television revenues with the €3 billion spread over six years.

The Bundesliga, composed of both the first and second division leagues, splits TV revenues and is regarded as more equitable than the other top European leagues in England, Spain and Italy.

So, the threat of a price fixing charge is the leverage for squeezing more money out of Bayern Munich. No wonder the German giants are playing in the B-league European competition (the UEFA Cup), rather than the Champions League. Germany’s politics won’t allow Bayern the funds to compete at the top level any more. And yes, Bayern are currently leading the Bundesliga and are thus likely to return to the Champions League next season. But they will do so with a revenue handicap of about €75m, if the article’s figures are accurate.

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