FC Bayern chairman Karl-Heinz Rummenigge wants the German 50+1 ownership rule to disappear. Is that a good idea for FC Bayern and German football in general?
Let’s take a look at how the rule works, the exceptions, and the potential consequences of a hypothetic change. I am far from sure that it will happen, but the possibility should be explored.
How 50+1 works
According to Deutsche Fußball-Liga (DFL) regulations, a club must hold a majority of its own voting rights. To achieve this, you can set up what we could call Company A, which sells annual membership to the fans. Company A holds a majority of voting rights in Company B, the actual organisation that runs football operations.
The principle behind that rule is that a German football club that competes in the Bundesliga does not allow other individuals or corporate groups to hold “50% plus one” voting rights.
Three exceptions stand. Bayer 04 Leverkusen and VfL Wolfsburg have their respective parent companies as majority owners. Pharmaceutical company Bayer and carmaker Volkswagen have provided funding to their respective clubs, founded by factory workers, for well over 20 years.
Dietmar Hopp, co-founder of software giant SAP, is a “special exception” here. He took a majority stake in TSG 1899 Hoffenheim in 2015, becoming the first private owner in the Bundesliga. Just what the rule was originally designed to prevent.
Then, RB Leipzig stand as the problem child. They created a structure in which a limited number of handpicked people are “members”. With this spoof, Red Bull have de facto control of the club. This violates the spirit of the rule while legally sticking to the letter of the law. In other words, Red Bull has brought corporate bullshit to German football.
The consequences of 50+1
Grassroots ownership is highly celebrated in Germany, a country that prides itself on the authenticity of its sports fandom and the purity of its beer. Not stained by the personal ambitions of foreign billionaires or greed of investor groups, it creates a level playing field for any club to rise, become and remain one of the best in the country based on skills. You cannot say that about the English Premier League at the moment.
The best example of that is the club that we cheer for. A mildly successful organisation until the mid-1970s, FCB won three European Cups in that decade, but it was in financial distress. The likes of Uli Hoeneß cleaned it up, made it financially successful and the Reds rose as one of the world’s football superpowers.
Under 50+1, any club could potentially do that.
However, quality managers are few and far between. They seem to be overly concentrated in Munich at the moment. Clubs such as Borussia Dortmund, Hamburger SV and others had success. Hell, BVB had the second most successful team on the planet in 2013! On the other hand, those clubs have also all found imaginative ways to fail either financially or on the pitch. Sometimes both.
Without an incredible wealth of club managers in the country, German clubs cannot recruit outside investors that would provide them with the kind of short-term cash needed to build up the way Hoffenheim did. Or the way Chelsea FC, Manchester City and Paris-Saint-Germain have done elsewhere in Europe.
Thus, Germany’s level playing field is anything but strong on the European stage. Lack of success in the Champions League denies non-Bayern clubs the prestige to sign ambitious players who set their eyes on the big-eared trophy. As if that wasn’t bad enough, English teams benefit from international TV rights that makes them far richer.
Bavarian call for change
In his call for 50+1 to end, Rummenigge warns that Germany’s Bundesliga is increasingly unable to compete with the other big leagues. What I consider as a grassroots mentality he calls populism.
He may have a point. In the name of footballing purity, Germany cannot “manufacture” a second superpower. There are smart managers at some of its clubs, such as Bayer Leverkusen and BVB, but their organisations do not have the clout to rise above their second-tier status in Europe. As soon as they have success, larger and richer clubs such as FC Bayern, Manchester United, Arsenal, Real Madrid, FC Barcelona, Manchester City and PSG raid them.
Look at Borussia Dortmund. It could not resist an incredible offer for Ousmane Dembélé when FC Barcelona knocked on the door in the summer of 2017. Why? The money was massive and the player’s ambition made him want to leave. Having an unhappy player for four full seasons is, to make an understatement, potentially problematic. Prestige and money hit hard.
Potential winners in a reform
In an ideal world, the DFL’s member clubs would vote to abolish the 50+1 rule and let investors take majority stakes while investing money in clubs that they cherish.
New funding would allow some teams such as BVB, Leverkusen and others to flash the cash in the short term with the promise of building more than second-tier teams. It would take a few years, but the cash injection paired with already-existing football knowledge could flourish and turn them into European powerhouses.
That, in turn, could be beneficial to FC Bayern. The Bavarians did not only win six league titles in a row. They earned a few of those trophies with huge leads. They have too little domestic competition and that hurts their European prospects.
You don’t believe me? Then remember how two straight Bundesliga wins by BVB forced FC Bayern to make a series of decisive squad changes in summer 2012, with the coup de grâce being the Javi Martínez signing for €40 million. A determined and beefed-up team went on to steamroll over Europe. Nobody stood a chance.
Since 2013, an easier Bundesliga has made the Bavarians lose steam at the worst of times… on several occasions. They need more competition and the end of 50+1 could give them just that.
Potential risks of a reform
Would the German football world necessarily be all flowers, fairies and unicorns? Hell no. Serious risks would pop up.
Investors would eventually take over clubs, put piles of money on the table and ask for short-term success. That success would bring in new revenue in terms of ticket sales, merchandise sales, new sponsorships and Champions League money.
How do you achieve that? Patiently building football academies that could produce stars from their backyard in a few years would provide a solid base for the future, but they would have to turn to the transfer market and be aggressive. They would go after both established stars and explosive young talents. High wages and inflated transfer fees would follow.
Would it matter if they were to come from Germany, France, Brazil, Cameroon or Japan? Nope. They would want to win now!
The direct consequence of transfer market aggression usually is new domestic and European success. German clubs with new financial backers could beat FC Bayern to the Bundesliga title.
Would that guarantee them Champions League wins? Not necessarily. Since they found their new backers, Manchester City and PSG have failed to win the European Cup. Chelsea only got theirs in 2012 because FC Bayern had an epic meltdown. It was a fluke.
Who would pay the price?
Let’s look at the English Premier League for a scary outcome.
First, smaller clubs are unable to compete at the same level. The EPL has a top five made of Man City, Man United, Chelsea, Liverpool and Arsenal. The last two have not won the league respectively since 1990 and 2003. Even United has been denied that trophy since 2013. Investor-backed Chelsea and Manchester City have been more successful in the last five years and only United were able to deny them until 2013. Leicester City’s 2015-16 win was a rare fluke.
The second loser is the national team. By going after stars with short-term success firmly in mind, investor-backed clubs put little faith in academies and local talent, save for Manchester City since Pep Guardiola joined. This has destroyed potential positive reinforcement between English clubs and the English national team for years. England rediscovered its ability to do well at the World Cup this year thanks to a few daring selections such as Jordan Pickford (Everton) at goalkeeper.
Do we want to see that happening in Germany? It’s a massive question.
In economic terms, more aggressive German teams would help push up the prices of individual players on the transfer market and they could raise ticket prices. Watching your favourite team in the stadium would cost more than €20 to €40 at the gate.
What do we do?
The DFL’s member clubs could vote in favour of abolishing 50+1 in the future. There would be benefits, but German clubs would have to accept important tradeoffs. There is a genuine risk that two tiers would emerge from a reform.
The first tier would be involved in a heated, disputed title Bundesliga race every year between four or five clubs. Those teams would become more competitive in Europe. The second tier would have a hard time cracking the top five positions and rarely see the Champions League. Domestic wins would be rare.
In addition to that, there could be unforeseen risks. Germany is not England and we do not know if something else could turn sour.
Final thought: risk it
No matter how dangerous it is to shoot down 50+1, I will advocate abolition. I am an FC Bayern fan first and foremost, and an increasingly selfish one at that.
If finding stronger competition at home means sacrificing the already-bleak title prospects of Schalke 04 forever, I am all for it. If it means making tickets a bit more expensive, I don’t mind. I can pay. If it means having enough Bundesliga contenders to force FCB to be a stronger team and win the Champions League more than once per decade, I am all for it.
I am not saying it with joy, but bring it on.