German FA announces distribution plan for €4.64 billion TV cash windfall

The German Football League (DFL) has agreed on a new system to distribute TV money once the new €4.64 billion contract takes effect next season.

A new four pillar system has been introduced, with one of the four pillars offering a parachute payment for relegated clubs from the top tier.

In June, the DFL signed a new four-year TV contract worth €1.159bn per season from 2017-18, an 85 percent income rise for Germany's top two divisions from the current deal.

With an expected increase in revenue from international Bundesliga rights in the next few seasons, the DFL's income is likely to top €1.4bn a year.

Thursday's announcement of the new distribution system came after the original decision, set for June 2016, was delayed until nearer the end of the year.

The distribution of domestic TV money will be based on a new four-pillar system. Seventy percent of the overall income will be based on a five-year ranking for each league, with the last season weighted with the factor five down to one for the oldest season to go into the ranking.

The top team in Bundesliga will get 5.8 percent of the overall income and the last 2.9 percent. The top team in Bundesliga 2 will receive 1.69 percent and the bottom club 0.75 percent.

The second biggest pillar called "competition" offers a parachute payment for relegated clubs. It is also based on a five-year ranking and makes up 23 percent of the money distributed overall.

All teams from the upper two tiers go into the weighted ranking where again the last season is weighted according to the five-year ranking. No Bundesliga club can drop lower than 24th and no Bundesliga 2 club can be higher than 13th in the ranking. The clubs on the first six spots all receive 6.5 percent from that pot.

With 93 percent of all domestic money already distributed, the other two pillars can be neglected. The third pillar called "sporting sustainability" makes up for five percent and again includes all 36 clubs. The ranking is based on the overall performances in the last 20 seasons, with all seasons having the same value.

The fourth, and final, pillar honours the academy work of each clubs. It makes for only two percent of the total, and will be distributed on a ranking based on the playing time for under-23 players trained in the association. Foreign players need to be registered within the association before their 18th birthday.

The DFL also announced a new three pillar distribution system for the growing foreign TV market. The 18 clubs of the second tier will divide a total of €5m among them next term, with the figure rising to €8m in the last season for the new deal.

Twenty-five percent of the rest will be equally distributed among the 18 Bundesliga clubs, and a further 50 percent will be based on all 36 clubs performances in the European competitions over the last five years. The final 25 percent are distributed based on a 10-year ranking, based on participations in the all European competitions.

DFL president Reinhard Rauball praised the unanimous decision by all 36 clubs as a "strong signal for the working cooperation in professional football in Germany," adding that "despite contrary opinions" the league reached an agreement which combines the "performance principle and solidarity."