Why Bayern Munich's TV Revenue Proposal Would Be a Disaster for the Bundesliga

On Friday, Bayern Munich president Karl-Heinz Rummenigge proposed a serious change to the way the Bundesliga conducts business in terms of its television contract.  The former striker put forward a plan that would end the practice of collective negotiation, leaving clubs free to strike separate TV deals independent of one another.

Speaking to German business magazine Manager Magazin (h/t Deutsche Welle), he said: "If we were to market our own TV rights we could earn 200 million euros, four times as much as now."

Referencing a stipulation that would require more successful clubs to give a part of their TV revenue proceeds to their less profitable counterparts, Rummenigge added: "The Bundesliga - including the smaller clubs - would be better off with this model."

Currently, the Bundesliga's practice is in line with the long-term model for other top European leagues, with the clubs together negotiating a "package" deal with broadcasters and deciding amongst themselves exactly how to distribute. In terms of the percentage difference between revenue given to the first- and last-placed clubs in the league, only the English Premier League is currently more even in its distribution. It's a bit of a consolation prize for lower German clubs that compete in a league in which Bayern's overall revenue approaches double that of its nearest competitors and fully dwarfs that of most of the competition.

There are a couple problems with Mr. Rummenigge's proposal. To begin with, regardless of any solidarity payments to the smaller clubs to narrow the income gap, the percentage difference will only widen. Smaller clubs may even earn more overall, but regardless, Bayern will have a larger percentage and therefore more relative spending power.

An increase in income may benefit smaller clubs by making them more capable of paying higher wages and therefore less susceptible to losing their stars to foreign leagues, but it would also make them significantly more susceptible to losing their talents to a proportionally much richer Bayern. Ultimately, the potential extra money would do little to positively change the situation at the smaller clubs and might even have a net negative effect. On a local scale, it would be comparable to inflation.

Mark Schiefelbein/Associated Press

Rummenigge's proposal is a reasonable reaction after the Premier League secured a TV deal worth in excess of £5 billion, with that and the pound's strength against the Euro likely to mean that even minnows among the English top flight will soon be propelled towards the elite of Europe's overall earners. It's a very real possibility that Bayern will be unable to compete financially with the likes of Manchester United, Chelsea, Arsenal, Manchester City and perhaps even more. But the answer isn't individual negotiation of TV rights sales.

There is a precedent for what happens when individual clubs are left to negotiate their TV rights, in Spain. In La Liga, Real Madrid and Barcelona controlled the vast majority of funds overall, with each (according to Spanish Culture and Sports Minister Ignacio Wert, via ESPNFC) earning about seven times the lowest earners.

The enormous difference in income as many Spanish teams have been unable to even pay their taxes and amassed huge amounts of debt caused a backlash, and earlier this year, Spain ratified a law requiring collective negotiations from 2016. According to Wert, the goal was to change the ratio of biggest earners to smallest from 7:1 to 4.5:1 in the near future, and eventually reach 3.5:1.

According to Spanish sport ministry spokesman Miguel Cardenal, the changes were made so that Spanish football could "adapt to modern times." Curiously, Rummenigge's proposal is to do quite the opposite.

Martin Meissner/Associated Press/Associated Press

In fairness to the Bayern director, his proposal would not give rise to conditions as extreme as those in Spain; the solidarity fund would help limit the gap.

However, the entire perspective Rummenigge has backed essentially devalues the lower clubs and comes from a perspective that Bayern are the team that makes the Bundesliga worth watching, with the other clubs of significantly less value. Spain's new approach of collectivism is more to brand their league, which has been criticized for being winnable only by a certain financial elite, as something worth watching in general. It's an approach similar to that of the Premier League, and Wert's perspective was that the current deficiency in La Liga TV revenue relative to that of the Premier League should be lessened with collective negotiation. It's not a bad idea, either: Who is to say that Stoke vs. Sunderland is substantially better to watch than, for example, Koln vs. Hertha BSC?

If Rummenigge's plan goes forward, it takes the emphasis away from marketing the Bundesliga as a great league and more towards promoting Bayern as the redeeming feature of the German top flight and a charity-giver. That approach didn't help La Liga catch the Premier League, and it won't help the Bundesliga either. It would, however, enforce Bayern's hegemony at the top.

@Mr_Bundesliga