SOCCER RIGHTS Poker Match for Sports Dollars

The German Soccer League will soon call for bids for future broadcasting rights. One possibility especially worries sponsors — if free-TV time on the popular Sportschau show is cut in half.

This will be an exciting soccer year, with fights for the German national title and European Championship in 2016.

But at German Soccer League headquarters in Frankfurt, officials are concentrating on the 2017-18 season: How can broadcasting rights packages be drawn up to leverage even more TV revenues for soccer clubs — without violating laws, annoying fans or irritating sponsors?

The league is known as the DFL in Germany, and managing director Christian Seifert is handling the difficult issue personally. Discretion is the watchword and pressure is intense. The chief of FC-Bayern, for instance, said he expects at least €1 billion in annual television revenue. Currently it averages €628 million.

We want our brands to be as widely visible as possible on free TV. And Sportschau is a big tanker for us. It is the dominant format that fans watch week after week. Joachim Strunk,, head of the “S20 lobby,” which represents 16 large sports sponsors

Since last summer, the federal antitrust agency has been examining the submitted scenarios. The call for TV bids, originally scheduled this month, was delayed because competition monitors needed longer than expected for their deliberations.

Nothing is known officially. But a survey by the federal agency sent to market participants allows conclusions to be drawn concerning DFL plans.

One possibility designed to heat up bidding involves Sportschau, the TV sports magazine of ARD broadcasting, which airs at 6:30 p.m. on Saturdays and is allowed to show highlights of soccer games.

Under a new scenario called “free compact,” market experts say there would only be 45 minutes of soccer broadcasting on free TV before 8 p.m. on Saturdays – about half as much as now.

Alternatively, a package that corresponds to Sportschau’s current rights would also be opened for bidding.

Meantime, the poker game has started.

“Apparently the DFL wants interested parties to bid on both scenarios – and only decide at the end,” said Axel Balkausky, sports coordinator at ARD.

Half of Sportschau’s current airtime would not be acceptable, said Mr. Balkausky.

“That is not a conceivable model for ARD,” he said. “We believe that a certain reporting length is needed to summarize a soccer game.”

Shortening broadcast time on free TV would enhance exclusivity in the pay sector. Mr. Balkausky suspects that a compact scenario could get parties from the online sector interested.

“This would be a severe restriction of the commodity of the German Soccer League with an extension to the Internet, if what one is hearing is correct,” he said.

There would also be a negative impact on the current advertising partners of soccer clubs. Through advertisements for jerseys and banners, Sportschau now opens a display window to 5 million viewers.

Jan Lehmann is familiar with the politics of calling for bids. Four years ago, he was involved in the process as director of the DFL. Today he heads the German operations of Repucom, the sports and entertainment marketing consultant. The company has analyzed what restricting free TV time would have on advertising partners.

“In the ‘free compact’ scenario, according to the data from the 2014-15 season, sponsors would lose gross advertising value amounting to €111 million ($120 million),” said Mr. Lehmann.

For sponsors of first-tier clubs, Sportschau programming counts for 21 percent of the entire advertising value of all broadcasters, according to Repucom.

But there are differences. Sponsors of top clubs like Bayern Munich, which achieve a wide range with the pay-for-view broadcaster Sky, only derived 10 percent of their ad value via Sportschau. For less prominent first-tier clubs, such as Hannover 96 or 1899 Hoffenheim, the share was significantly over 30 percent.

Repucom calculated these values through an evaluation of all DFL game broadcasts in the 2014-15 season.

“We determined that the sponsors of the German Soccer League and the Second League generated more than €220 million in advertising value through Sportschau and the Tageschau news program on Saturdays,” said Mr. Lehmann.

“Of course it is legitimate that the DFL wants to create competition for as many packages as possible,” said Mr. Balkausky, ARD’s sports director. “That was already the case four years ago.”

With the previous series of bids, ultimately the rule was: If an offer was a fifth higher, it had to be accepted. Otherwise the final decision remained with the DFL.

What emerged was the classic scenario with a detailed Sportschau broadcast. According to unconfirmed information, ARD pays around €100 million per year for package rights, which also includes a few live games and highlights of Sunday games.

Mr. Balkausky expects a tough fight among bidders.

“I am firmly convinced that all free-TV broadcasters will take a close look,” he said. “The German Soccer League wants to take in more money than before. In free TV, however, it cannot be refinanced past a certain point.”

Mr. Balkausky said private broadcasters are also limited, because they are only allowed 12 minutes of advertising per hour. “There is no automatic mechanism that says we have to retain the rights,” he said. “Everything is determined by cost effectiveness.”

Only this spring will ARD decide what to budget for acquiring rights to sporting events for 2017 through 2020. It is estimated that Mr. Balkausky has some €250 million per year for all sporting rights. “We will continue to operate in this framework,” he said. “There won’t be more money in the sports rights budget.”

In the meantime, opponents are lining up. Matthias Bolhöfer, spokesman for German TV broadcaster RTL, said the station was definitely interested. “But we will continue to be reserved regarding specific statements of intention, even after the call for bids has been made,” he said.

Constantin Medien, the sports and entertainment media group that currently features the Second League in particular, is also said to be interested in the free-TV package.

“With a view to the next period of rights, our goal is to at least maintain the status quo,” said board member Olaf Schröder, who is also programming director at Sport 1. “If further possibilities arise and they are financially feasible, we would of course also be interested.”

As head of communications at Deutsche Postbank, Joachim Strunk, is in charge of sponsoring. He also speaks as managing director for the “S20 lobby” — 16 large sponsors that invest a total of €500 million in sports each year.

He said an intensive presence on free TV was indispensable and that Sportschau soccer programming was crucial to sponsors.

“In purely commercial terms, we want our brands to be as widely visible as possible on free TV,” Mr. Strunk said. “And Sportschau is a big tanker for us. It is the dominant format that fans watch week after week.”