Bundesliga’s business: Lessons from Germany
The German Football League (DFL), better known as the Bundesliga, is one of the most popular football leagues in the world. Fans are raving about the performances of teams from Bavaria and Berlin every weekend. The electrifying actions from the almost always full stadia usually trend on social media like other high profile leagues. However, the last time a German player won the top global FIFA award was almost three decades ago. Yet, the Bundesliga runs one of the most effective and most profitable sports businesses in the world.
I spent five days in October on a tour of the Bundesliga courtesy of StarTimes, official broadcasters of the league in Sub-Saharan Africa. Alongside other African journalists, we visited the Mercedes Benz Arena, home ground of VfB Stuttgart, the Rhein-Neckar-Arena, home of Hoffenheim and the Red Bull Arena, home of RB Leipzig. It was an opportunity to see how the German league system works to provide entertainment for its teeming fans and host communities as well as employment for more than 54,000 people and also generate revenues of 4.01billion euros while paying taxes worth more than 1.17billion euros to the German government in the last year.
German clubs are community-based organisations with fee-paying memberships. The law holds that the ownership of clubs must sway 50+1 in favour of the fans. This ensured that the fans have control over their clubs leading to greater participation and the lowest ticket prices in Europe’s top five leagues. Before the start of every game, the fans are the centre of attention as the flags of different supporter groups are carried onto the pitch in a traditional salute during the chanting of the clubs’ anthems. All these contribute to making the Bundesliga have the highest attendance figures in European football.
The DFL runs a tight shift. It has kept its operations very business-like by creating subsidiaries to manage every aspect of the value chain. While some other big leagues have outsourced some production items, the Bundesliga owns the companies that produce the live broadcast, audio-visual rights marketing, digital content creation, data and technology, etc. This shrewd ability to control all the variables in its operations means that it can maximise opportunities and react quickly to changes in the sports industry.
The Bundesliga’s focus on grooming young players through to the professional ranks has seen clubs invest more than 1.39billion euros on academies since 2002. This yields funds from the transfer of players across the country and abroad. It also focuses on youth and academy players which gives the Bundesliga clubs an average age of 24.5 years. One could see the attention paid to football education combined with the general school learning of these players who live in the club facilities.
The importance of modern facilities is also a major point of success for the Bundesliga. The stadia are modern, clean and are filled with a lot of history. Fans enjoy halftime refreshment at concession stands inside the stadium where traditional German snack and beer are sold. Hospitality sections are also available for fans looking for exclusivity. Bundesliga stadia are also tourist attractions on non-match days with fans streaming in for tours of their favourite teams’ grounds.
Technology also plays a big part in the game in Germany. Clubs are investing in high-level equipment that can give their players the extra edge that and make the difference during a big game. At Hoffenheim, was the famous Footbonaut, a technology that was famed for helping Mario Gotze score the World Cup-winning goal at Brazil 2014. At RB Leipzig, a less expensive prototype called the Soccerbot 360 enables players to improve their cognitive skills. There is a very close link between football clubs and local technology companies that work closely with the football industry to help develop new and effective methods to achieve their goals. The Bundesliga is also trialling the Video Assistant Referee (VAR) to help improve transparency in the game.
As the German Klassiker takes place this weekend between Borussia Dortmund and Bayern Munich at the Signal Iduna Park, it promises to be another interesting encounter between two of the Bundesliga’s biggest clubs. The spectacle will be on StarTimes but it is beyond that, the Bundesliga is doing things that we can learn from to make our industry much better. It is a league one needs to watch closely.