Now that the so-called European Super League has collapsed in on itself amid a flurry of fan revolt, recriminations and stilted apologies from billionaires, we can gaze back to those heady moments long ago when the plan was announced on Sunday night. It was clear from the start that there were flaws with the proposed breakaway competition hatched by a dozen of football’s megaclubs.
Notably, three major teams were conspicuous by their absence: Paris St Germain, Bayern Munich and Borussia Dortmund. Leaving aside the more opaque motives of the Qatar-owned French side, the two German clubs not being involved was pointed. Bayern are one of the real heavyweights on the international stage, in terms of sporting prowess and financial power. But the resolute rejection of the idea by Dortmund was even more surprising.
That’s because Dortmund are the only major German club listed on the stock exchange. You would think that at least some of Dortmund’s thousands of shareholders might be interested in a scheme promising huge profit. However, they weren’t even informed, let alone consulted. What would be a peculiar way to run a business in any other walk of life is possible in German football because of the country’s unusual club model. It’s unusual because it’s all about having your cake and eating it.
Without knowing the intricacies, most football fans will be aware that German clubs are not owned by companies or individuals, which is why there are no American billionaires, Russian oligarchs or Gulf states involved (only Austrian entrepreneurs, but more about that in a minute). The clubs are often, though not entirely correctly, referred to as “fan-owned”, which is widely interpreted as one of the key reasons why the Bundesliga is by far the most fan-friendly of the bigger leagues.
Suffice to say that the Bundesliga has just scrapped its lucrative Monday-night fixtures because of protests from supporters. So, wouldn’t the world of football be a much better place if more countries simply adopted this model? Indeed, Boris Johnson has already made noises about putting fans in greater control of the game while announcing plans for a review into how football is run in England.
However, copying the German model is complicated because its clubs are such strange beasts, for two reasons: history and culture. Until the 21st century – and this is not a typo – even the biggest and richest German teams were essentially amateur clubs run by volunteers. The idea that football is not a business and that football clubs are not part of the entertainment industry still permeates the German game to an astonishing degree. Though it’s perhaps not quite so shocking given that Germany was the last halfway-important footballing country to legalise professionalism and form a nationwide league, the Bundesliga, which came into being only in 1963.
Until that point, all German clubs had followed the same format. They were set up by enthusiasts to serve a local community. Anyone interested in an athletic activity could join and vote on all club matters. That’s why those clubs were not only public, non-profit organisations set up for the common good, they were also usually multisport clubs. Borussia Dortmund’s track-and-field division, now defunct, was instrumental in getting the club admitted to organised sports leagues, while in the 1980s Bayern Munich dominated German chess.
Football, however, began to draw such huge crowds that the question of paying the players for their services was debated for decades. A compromise of sorts was reached after the second world war, when the clubs were allowed to sign footballers to semi-professional contracts. (The members of the West Germany team that won the 1954 World Cup all held down a regular job on the side.) But this arrangement eventually crumbled when it became clear that the German game couldn’t survive as an island, as players moved abroad to turn fully professional. Germany eventually followed suit, but helpfully the clubs were allowed to maintain their charitable status (and thus their tax benefits).
For four decades after professionalism, German clubs were able to hold the demons of commercialisation at bay. Unpaid presidents elected by the members ran some of the best teams on the continent, and the money to pay their wages came from the gates and sponsors – and the occasional beneficiary who bankrolled a club for sentimental reasons. However, the football boom of the 1990s made this model look increasingly antiquated. The old-fashioned German clubs – owned by nobody because they couldn’t be bought or sold – were competing in Europe against businesses and powerful investors. Something had to give.
In 1998, the German football association changed its laws and allowed clubs to turn their professional football teams into limited companies. However, there was a twist. In order to make takeovers, foreign or otherwise, impossible, the now famous 50+1 rule was put into place, which says that more than 50% of the voting shares must remain in the possession of the parent club, and therefore its members. It is an unusual rule because it asks an investor to spend considerable money on a company without ever being able to acquire a controlling interest. (Hasan Ismaik, an investor from Jordan, found this out the hard way: having pumped millions into 1860 Munich since 2011, he was then barred from actually running the club.)
To many fans outside Germany, this set-up may seem attractive – but replicating it could be extremely difficult, especially as it’s unclear whether such a structure would hold up in court if challenged. When Martin Kind, the Hannover 96 chairman, threatened to tackle the legality of the rule, it was quickly amended to allow an individual who had invested heavily in a club over a long period of time (“more than 20 years”) to take over the majority of shares. While Kind still hasn’t done so, the longtime Hoffenheim benefactor Dietmar Hopp used this loophole to buy a controlling share in the club in 2015. It means Hoffenheim are now one of four exceptions to the 50+1 rule.
Two others are Leverkusen and Wolfsburg, which started out as company teams for Bayer and Volkswagen respectively, and were thus granted exemptions in 1998. The fourth, and by far most controversial, exception are RB Leipzig, for all practical purposes controlled by the Austrian company Red Bull. The energy drink giant came up with a way to get around the rule that caught the German FA unaware: in 2009, Red Bull simply formed a new club in Leipzig and then stopped non-Red Bull employees from becoming members. Despite widespread concerns, and Leipzig’s relative success – the team reached the Bundesliga in 2016 and the Champions League in 2017 – the Red Bull ploy has not sounded the death knell for the 50+1 rule and thus the German club model.
During this frenzied week of off-field football, politicians and pundits have suggested a version of the club ownership model could be implemented in England to give power back to fans above wealthy owners. It’s an admirable intention, yet the legal and technical problems would be manifold. It’s hard to see, for instance, how the ownership of an English club could be changed without forcibly expropriating the assets of those who acquired the company fair and square. The backers of these football teams, clearly with deep pockets, are unlikely to let go without a fight: expect some heavy challenges in the courts.
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