The European League of Football (ELF) is “not far away” from profitability as it prepares to enter its fifth season and after cutting costs by turning to a remote broadcast production model, according to co-founder Zeljko Karajica.
Costs jumped as the ELF expanded from 43 games in year one to 107 games by 2023 and with the production standard required to be of sufficient quality to attract broadcasters.
That spending was supported by an investment round in 2022. A further funding round announced seven weeks ago saw German entrepreneur Klaus Meier and his private equity firm D2D4 secure a 10-per-cent stake in the league.
As a start-up, the ELF incurred losses of €1.51m ($1.56m) and €1.6m in 2021 and 2022, respectively, according to the most recently available accounts published by the commercial registry in the league’s core market of Germany.
First, the Covid-19 pandemic and then the war in Ukraine disrupted the ELF’s plans to produce and develop a league self-titled the “Champions League” of American football in Europe. Last year, the league was subject to late payment claims from service providers amid a wider dispute over the quality of production elements in season three.
Speaking to SportBusiness, Karajica maintained that profitability is now within sight after moving to a system of 71 per cent of production being carried out remotely. Money has been saved by largely removing the need for on-site outside broadcast and SNG (satellite uplink) vehicles.
“We’re not far away from being profitable”, said Karajica, who described the league as now in its ‘start-up 2.0 phase’. “We worked hard on the cost side, which is why we started this innovation to go other ways in production to save some money. On the other side, there are revenue gains from sponsorship and [media rights] distribution.
“We try to collect some revenues in every area. For sure it’s a hard business…[but] we’re going forward. All of our big sponsors from 2024 will extend their contracts and stay with us in 2025. This is a great base to develop further. They are happy with the product, reach and the numbers.
“That’s the way we’re trying to become profitable and healthier in the future.”
The ELF derives its revenues mainly from sponsorship and media rights deals, merchandising and OTT subscription revenues, plus event-related revenues from the Championship Game. It is looking to develop its hospitality and licensing revenues, and secured its first betting rights revenues in a deal with Genius Sports agreed in 2023.
Having started with eight teams in 2021, the ELF rose to 17 teams within two years. Season five will feature 16 sides with the arrival of Nordic Storm based in Copenhagen and Malmö helping to offset the exit of the Barcelona Dragons and the Milano Seamen’s one-year hiatus.
Some team names and logos from the NFL Europe era live on in the ELF. The National Football League (NFL) folded its European operation league in 2007 amid reports of annual losses in the region of $30m (€29.1m).
With the addition of more teams, the ELF’s total attendance has risen year on year, hitting 473,370 fans in 2024. Average audiences for regular-season matches hover between 50,000 and 130,000 on German free-to-air commercial channel ProSieben Maxx, which now airs 30 matches per season.
Broadcast rights were distributed in 13 countries in 2024 with those taking games including O2 (Czech Republic), beIN Sports (France), Network4 (Hungary), Polsat (Poland) and iQiyi Sports (China). The ELF has earmarked deals in a total of 20 countries for season five. The contract with ProSiebenSat.1 has another two seasons to run.
“We’ve generated more revenues but in order to produce all of these games on a level that is good enough to bring to the big TV screen in Germany and other countries, then you have to spend a lot of money,” said Karajica, who himself held senior management positions at Plazamedia, Sport1 and ProSiebenSat.1.
“We said that it was an investment we had to make and it’s the reason we started the first [investment] round in 2022 to raise money to support this kind of growth.”
Ahead of season three, the ELF worked with its appointed production company Novel Media and Amazon Web Services (plus its service provider Logic Media) to put in place a new cost-efficient, cloud-based remote production. The work continued in season four with 75 of 106 matches produced remotely from studios in Munich.
Payment disputes
Last year, the ELF faced late payment claims from at least two production service providers for work carried out during the 2023 season, SportBusiness understands.
Combined, these claims are thought to have totalled a low six-figure Euro sum.
The ELF is thought to have informed at least one service provider that it was waiting to close its capital round last year before settling outstanding invoices. However, the outstanding payment claims were also wrapped up in disputes over the quality of the services provided. The league is no longer working with the providers in question.
Questioned by SportBusiness as to whether the claims had been settled, Karajica refrained from commenting on specific commercial relationships, but said: “Everybody since we started four years ago has been paid and what we agreed on.
“As always when you start to produce something, it’s not always a one-sided thing. If a big league like the German Football League (DFL) doesn’t pay a provider because it didn’t work properly, then nobody would ask anything.”
The ELF continues to work with the likes of AWS, Novel Media, broadcast graphics company NetVenture and Endeavor Streaming, which provides the streaming technology for the ELF Game Pass OTT platform.
Karajica added: “We’re moving forward and better positioned in the market day by day, also with the partners around us who help us to be better established.”
That better market positioning includes a “broader view on sponsorship, distribution and wider development” thanks to the involvement of private equity backer Meier, according to Karajica.
“Now we are facing the fifth year, so we know what to do, what we need, and we need some bigger partners like Klaus Meier to establish ourselves in the sports landscape in Europe.”
The need for capital beyond that provided by D2D4 will depend on elements such as the future expansion strategy or unexpected costs, reflected Karajica.
“Are you maybe losing a partner or you can’t fulfil your business plan you had in mind? These are the factors that affect the capital strategy.
“From now we are OK with what we have done but I would never say never. Maybe there is a big opportunity to do something, or things may change. The good thing is that we’re now able as a league facing its fifth season to acquire capital. People outside believe that it’s worth investing in the ELF.”