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Bundesliga works on financial emergency plan

The Corona crisis is hitting the Bundesliga hard economically. The DFL is negotiating with Sky on advance payments to secure the clubs’ liquidity. Should this fail, the league is working on a plan B.

The Bundesliga is still dormant in Germany, and it is still unclear whether the season can be played at the end due to the ongoing corona crisis. The German Soccer League (DFL) is doing everything it can to avoid having to cancel the season. An abandonment could cost the clubs in the First and Second Liga estimated revenues from TV money and sponsorships amounting to 750 million euros.

Due to the Corona pandemic, 13 clubs are said to have fallen into severe economic difficulties. The DFL is already said to be negotiating with the pay-TV channel Sky for financial support for the clubs. Sky is to grant the league a financial advance to secure the liquidity of the 36 clubs.

“We are in constant communication with our long-standing partner DFL, especially given the current situation of the Bundesliga and Second Bundesliga. In this context, there are active discussions to find constructive solutions, also concerning royalty payments and their potential timing,” said a Sky spokesman at a request from WELT.

Due to the Corona pandemic, 13 clubs are said to have fallen into severe economic difficulties

However, the DFL is pursuing a two-pronged approach and is looking at the worst-case scenario. According to the “Frankfurter Allgemeine Zeitung”, the league is said to have given a mandate to the investment bank Nomura for a financial emergency plan. This emergency plan is supposed to take effect if the season cannot be played to the end and negotiations with Sky fail or generate insufficient revenues.

Bridging loan for the DFL

Nomura’s mandate would then probably be to provide the DFL with a bridging loan. It is said to be worth hundreds of millions of euros. Both sides refused to comment to the “FAZ” newspaper. The DFL is said to have made contact with the Japanese financial house immediately after the crisis broke out when the Bundesliga games were cancelled. The plan probably provides that the clubs will then repay the loan with future income from media rights.

Due to the lack of TV revenues, some clubs are now missing a multi-digit million sum, and some of them are even threatened with insolvency, according to a “Kicker” report. The clubs are still waiting for the fourth and final instalment for the current season, which is actually to be paid by the TV rights holders in May. The last instalment alone is expected to amount to 300 million euros.

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