Last year I wrote a case study that provides a comparative analysis of the business practices within the Bundesliga, with a particular focus on FC Bayern München AG (Bayern Munich) and explores the implications of the 50+1 rule. By examining the similarities and differences between the Bundesliga and other prominent European leagues, such as Ligue 1 in France, this study raises the question of whether Bayern Munich’s financial strength and on-the-field dominance will have comparable effects on the Bundesliga as Paris Saint-Germain (PSG) had on Ligue 1. The Eredivisie (Netherlands) and the Jupiler Pro League (Belgium) have recently supplanted Ligue 1 in the Top 5 competitive leagues in European football, according to the UEFA national association rankings.
The 50+1 rule, which ensures that clubs maintain a majority ownership stake in their respective organizations, is a uniquely German rule and is part of the reason why German football and the Bundesliga have been able to remain competitive in a larger European market. Is this rule good for the sport overall? One could argue that it is, as it is impossible for clubs to “buy” success and also has the ability to prevent horrendous financial decisions and mismanagement. If applied to English football, for example, it would have been much more difficult for a club such as Manchester City to reach its position of prominence so enjoyed these last few years. As well, Manchester United would also be in a more advantageous position as the leveraged buyout utilized by the Glazer family would not be allowed. It should be noted that the English FA has since prohibited this method of purchasing a club.
The 50+1 theoretically allows for a fairer competition. At its core, it prevents singular individuals from financing a club. The idea is that clubs should be rewarded for performing well. A Darwinian idea if nothing else. The more a club wins, the higher the financial reward which means more budget to spend on players, infrastructure, managers, etc. At the same time, it makes it more difficult for underperforming teams to succeed in an industry where cash is king. Just this aspect alone has continued to stoke the fires of a heated debate for years. There are a couple of exceptions. Wolfsburg and Bayer Leverkusen were formed by workers from Volkswagen and Bayer, respectively, and were in existence before the Bundesliga. Dietmar Hopp was allowed to purchase a majority stake in 1899 Hoffenheim by being the single largest financial contributor to the club for more than 20 years. Red Bull, however, have taken a different route with RB Leipzig. “RB” in this case meaning RasenBallsport, or Lawn Ball Sport, making it a clever way to maintain brand recognition in a league where it is prohibited for a club team to carry a corporate name. Red Bull purchased a football license from a smaller club in the bottom tier of the German FA pyramid and keep the club membership at only 21 members, all of whom have ties to Red Bull.
Collective club ownership, however, does not provide a firewall against financial mismanagement. The people in charge of the club’s day-to-day operations still must make reasonable, responsible business decisions. In the cases of Manchester United and FC Barcelona, poor organizational practices and irresponsible spending have led to financial positions that would cost many CEOs their jobs in the private sector. These clubs can leverage the strength of their respective brands to maintain some level of relevance, but unless this is accompanied by on-field performance it is only a matter of time before that too will fail. Clubs are only profitable when they are winning competitions. One could argue that Manchester United is profitable despite having not won a major trophy in nearly a decade, but this is only true of the business side. It is a profitable brand, not a profitable football club, having overpaid for players which were considered investments to be sold at a later date. There was no clear strategy for club operations in the post-Sir Alex Ferguson years. FC Barcelona, on the other hand, grossly inflated its own wage structure which resulted in losses of more than $300 billion just two years ago. Their respective failures in international competitions only increased these financial problems. In both cases, there seems to be an apparent shift in vision and a “steady hand has been returned to the wheel” as the clubs are moving forward.
International competitions provide the largest budgetary supplements for clubs. The added television revenues, ticket sales and prize money can set the budget for some clubs for years. Some clubs might also forgo focusing on their domestic competitions in order to perform better in the international ones. But even when focusing on just one competition, some clubs can find it difficult to succeed. PSG, for example, considers the Ligue 1 title to be a foregone conclusion every season, having won the title in 9 of the last 11 years, but to date has failed to win the Champions League, having made it to the final match only once, despite having some of the world’s best players.
Football fans, the true believers, will always support their clubs. They will stand in the rain and snow, win or lose, and never lose their voice. But a club’s financial success is not built solely on the ultras. Television networks will not carry matches for teams that no one wants to watch. A growing football market, like the United States, can easily follow Major League Soccer and Liga MX (Mexico), the Premier League (England), La Liga (Spain), the Bundesliga, the Eredivise and Seria A (Italy) but Ligue 1 is much more difficult to find. What all of these leagues have in common is that none are dominated by just one club in the way that PSG dominates Ligue 1, with the exception of the Bundesliga, as Bayern Munich has won the league 11 times in a row. This then raises the question: Does the 50+1 rule protect the Bundesliga as a top competitive European league?
Does the German idea of collectiveness – i.e., we all succeed when one succeeds – allow for the success of the 50+1? Other leagues could learn from this model but removing the cash cow that is a successful football club from private ownership would require action from the respective football associations if not also an act of the legislative bodies of the respective governments. Football is a beautiful game that has the power to unite people across cultural boundaries. Yes, it can be a lucrative investment, but it is something that in its soul belongs to the people. The club and owner which understands this fundamental principle will find itself to be successful.
In an era that is becoming overrun with governments sportswashing their regimes, a 50+1 adaptation in areas outside of Germany could serve as a firewall against the further corruption of a sport, which at its core, belongs to the fans and supporters. No one club, no one player, no one owner, no one association is more important than the sport itself.