He's Back
October 10, 2007
The German Soccer League, the DFL, which represents the 36 first and second-division clubs, announced on Tuesday that the Kirch-led company Sirius will sell the domestic broadcast rights to the Bundesliga for six seasons.
The DFL said it set to earn some 3 billion euros ($4.2 billion) from 2009 to 2015 -- or 500 million euros a year -- from the new deal.
The league currently makes 440 million euros per season from a deal allowing the private, pay TV station Premiere to broadcast matches live and state-run television to show highlights. That deal expires in 2009.
Now the DFL is turning to the 80-year-old Kirch in an attempt to boost revenues and catch up with other, richer European leagues such as the English Premiership.
Lessons of History?
The Bundesliga has been around the block with Kirch before -- with near calamitous results.
Kirch founded Premiere, and for much of the 1990s, he owned live broadcast rights to Bundesliga matches.
But the Kirch Media Group repeatedly found itself in financial difficulty and was finally forced to file for bankruptcy in 2002. It was the largest insolvency in post-war German history.
The bankruptcy hit the Bundesliga hard, depriving clubs of millions in planned revenues and driving some deep into debt. The affair became known as the "Kirch Crisis."
The new deal is reportedly covered in full by bank guarantees, although no specific names of financial institutions have been released.
Mixed Reactions
DFL members who approved the deal were generally positive about what Kirch could do for the league.
"It's a quantum leap," Hans-Joachim Watzke, commercial manager of Borussia Dortmund, told the DPA news agency. "I consider Mr. Kirch a visionary entrepreneur who thinks strategically."
But Hamburg voted against the new deal.
"A decision with enormous implications was made under unnecessary time pressure," Hamburg Chairman Bernd Hoffmann told DPA. "The terms presented here didn't convince me."
And fans worry that Sirius, in its efforts to bring in increased revenues, might encroach upon the autonomy of soccer reporting or perhaps even do away with highlight programs on public television.