bundesliga: the most financially sound and popular football league in europe
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This brief document explains the commercial success of the German Bundesliga, looking at the business elements of this model which make it so financially sound and popular and the reasons behind this.TRANSCRIPT
Bundesliga: the most financially sound and popular football league in Europe
This case study looks at the commercial success of the German Bundesliga, looking at the business elements of this model which make it so financially sound and popular and the reasons behind this.
Highest attendance and lowest ticket pricesThe average attendance at a match in the Bundesliga for the 2008/9 season was 41,904, compared with 35,592 in the Premier League and 28,478 in the Primera Division. Furthermore, the average capacity of a Bundesliga stadium is 46,747, which is the highest in Europe and significantly exploitation of the stadium capacity is over 90% for the league. Many of these stadiums are branded as elite, UEFA’s highest quality standard, thus they are high in comfort, have a high security standard and have excellent infrastructure.
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Bundesliga Premier league Primera Division Seria A Ligue 1
Average attendance 2008/9 season
The average price per ticket for the 2008/9 season was 21 Euros, compared with 43 in the Premier League and 40 in the Primera Division. Clubs in the Bundesliga also, on average, spent 45% of their total revenue on payroll i.e. player and staff wages, which was far less compared with their counterparts in the Premier League (63%) and the Primera Division (62%).
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Bundesliga Ligue 1 Seria A Primera Division Premier league
Average price per ticket 2008/9 season
Increasing turnover and balance revenue mixThe total turnover of the Bundesliga has increased dramatically by 60.3% since the 2003/4 season, when it made €1.27 billion, to the 2008/9 season, when it made €2.04 billion. Furthermore, the Bundesliga is not overly reliant on one revenue stream with sponsorship (€573) and media rights (€594) the main revenue streams, followed by gate receipts (€425), merchandising (€276) and transfer fees (€168) in the 2008/9 season.
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Transfer fees Merchandising Gate recipets Sponsorship Media rights
Revenue streams 2008/9 season (millions)
Why is the Bundesliga so popular and successful?For the past 40 years, no club in the Bundesliga has gone bankrupt during a season or was unable to complete a season. This benchmark gives business partners an additional appeal and security, which reinforces the integrity of the competition. Essentially, this is down to:
1. Strictly enforced licensing systemIn the Bundesliga and Bundesliga 2, clubs can only compete if they have been granted a licence by the League Association. If a club is refused a licence then it will not be able to compete for the forthcoming season.
A licence is given to a club on an assessment of its economics for the forthcoming 18 months. A club must prove it will have positive liquidity and positive net equity at the end of the season. The liquidity forecast must show that:a. Payment obligations can be fulfilled at all timesb. Regular match operations are guaranteed at all timesc. A financial irregularity can be countered successfully
2. Restricted ownership structureThe 50% + 1 clause in the Bundesliga means that a football club (members association -Verein) must hold the majority of voting rights of the football company, i.e. the fans/members control the voting rights of the club.
Simplified Diagram of the 50+1 Rule
50%+1 vote
Limited Company
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50%+1 vote
General Meeting
Supervisory Board Management Board
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