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35. Bull, Bear & Beyond – Borussia Dortmund: executive interview: TV marketing deal image

35. Bull, Bear & Beyond – Borussia Dortmund: executive interview: TV marketing deal

S1 E35 · Bull, Bear & Beyond by Edison Group
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In the second interview, we discuss Borussia Dortmund’s TV marketing revenue. TV marketing is the company’s most important revenue stream, at c 40% of the group total, and over the long term has provided strong growth, a CAGR of c 15% in FY05–24. We focus on how the Bundesliga’s broadcasting rights compare with the other major European leagues, the opportunities for developing Bundesliga rights and the visibility and predictability of the broadcasting rights for all the competitions in which Borussia Dortmund participates.

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About ‘Bull, Bear & Beyond’

Bull, Bear & Beyond': features candid conversations with senior executives and from our own team of experts from across industries, exploring strategy, innovation, and the opportunities shaping their markets and 60-second pieces are a compressed summary of content designed to convey our message in a single, easily shareable hit.

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Original interview published on 16/12/2024 and reposted as a podcast

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Transcript

TV Marketing's Role in Bundesliga Revenue

00:00:08
Speaker
So Thomas, TV marketing is the most important source of revenue for the company. It's about 40% of total revenue and it's grown very strongly over the long term, ah about 15% since about 2005. Could you talk about how the Bundesliga compares with other European leagues, where the opportunity is for the Bundesliga in terms of its rights and equally ah Is there something which hinders Bundesliga getting to where the other leagues are?

Broadcasting Revenue Comparison with Premier League

00:00:36
Speaker
Well, the Bundesliga realises for their national broadcasting about 1.2 billion a year, which is, say, less than the surge what the Premier League realises every year.
00:00:50
Speaker
And this is hard for our competitiveness in the international market, especially in the Champions League. where the last in the British Premier League earns more broadcasting and from the national broadcasters than the first in the German League.
00:01:08
Speaker
And so we have not so much money to compete on the international transfer market.

International Broadcasting Revenue Challenges

00:01:14
Speaker
of This is a real problem for us. We cannot buy the big stars.
00:01:20
Speaker
And the more big stars you have in in your league, leak the more are you attractive for international audience. This is something very difficult for the German League. The German League is the third in the European market and to Spain is much higher. where but but Germany has billion Spain realizes 2 billion and the Premier League nearly 4 billion

Opportunities for International Brand Growth

00:01:52
Speaker
euro.
00:01:52
Speaker
So this is very crucial for us and what is very complicated is that our international share of broadcasting is comparable low. The German football broadcasting revenues from international markets are just 14% of the total revenues of the the German League and in the Britain it' we talk about 48%. And this is also a chance for the Bundesliga to develop their own brand, their own product.
00:02:25
Speaker
They have to go more abroad to develop the Bundesliga international wise.

Target Markets for International Expansion

00:02:31
Speaker
to get higher international revenues from broadcasting and to be more and more competitive.
00:02:38
Speaker
But we surely will not reach the level of the Premier League because they have a success story, I guess, over 40 years and the Bundesliga maybe the last 20.
00:02:50
Speaker
So the international rights for the Bundesliga are relatively low. well Which markets do you think presents the best opportunity for the Bundesliga to develop? Well, on the final end, I guess it's the Asian market because there's a very big fan base of football there.
00:03:08
Speaker
The British brands are very well known there. Well, they developed also the Spanish ones, but the Bundesliga has still a way to go to develop his own brand there.

Diverse Revenue Streams and Predictability

00:03:19
Speaker
And I guess in the near future, it will be the American market, the Northern American market. because we have, for example, in the year 2025 the World Championship there in the US and in the year 2026 the world Championship.
00:03:36
Speaker
And the Latin ten market is very interesting. Those are the major target markets for for international broadcasting for the Bundesliga, I guess.
00:03:47
Speaker
So if we if we look at the TV marketing revenues there, you disclose three three revenue lines. One is Bundesliga, one is international, then there's the domestic cup. Would you talk about the variability of those revenue streams and the the relative predictability of those different revenue streams? The best predictable revenue stream is the the national Bundesliga broadcasting market.
00:04:10
Speaker
that That revenues can be predicted for the next, so total next season without problem. ah The most difficult Champions League.
00:04:22
Speaker
Because if you play Champions League, your revenues can vary but create between, say, 68 million to 120 million. And that depends on how far you can go in that competition.
00:04:35
Speaker
The last season we reached and the final in London and the the outcome was 120 million from the UEFA for that competition.
00:04:46
Speaker
And when we just played the say it that round of last 16, we talked about 80 million. So it's very a lot. And the National Cup varies, depends how surely also how far it goes in that competition, but the revenues are comparably low.
00:05:05
Speaker
If you reach the final in in Berlin, you may make 10, 12 million. And that is what you can lose. So this is the impact, the financial risk impact is quite low.
00:05:18
Speaker
But the most variability is in the Champions League. Or if you just play EuroLeague, which what would be worth.