Why Bundesliga clubs cannot seek foreign takeovers?

Football in Germany and the ownership structures are very different to the Premier League, La Liga and Ligue 1.

Newcastle United’s takeover by Saudi Arabia’s Public Investment Fund (PIF) is in its final stage. The Tyneside club will be taken over by PCP Capital Partners (10% share), owned by Amanda Staveley, Rueben Brothers (10%) share and the rest will go to PIF. If the takeover is completed, it will make Newcastle’s owners the richest in world football, whose worth is over £260bn - something which the clubs in Bundesliga can not replicate.

While Premier League clubs continue to invite investment from global bigwigs and level-pegging in French football has been crushed since PSG’s takeover by the Qatar Sports Investments, there is still a country in Europe’s elite that has managed to wade off the charms of such massive money moves – Germany.

In German football, the financing and ownership structure is very different to those in Spain, England, France and most other top footballing nations. The main reason behind it is the 50+1 rule that stipulates that a club must retain at least 51 percent of shares in its professional football team. Thus, most German clubs still have a very solid organizational setup, and fans run the show, holding the teams deep rooted to values.  

At the opening of the 41st DFB Congress in 2013, former UEFA president Michel Platini singled out the Bundesliga model as a golden standard: “While the rest of Europe has boring leagues, half-empty stadia and clubs on the verge of bankruptcy, German football is in remarkable health.” 

In essence, this means that oligarchs/businessmen from any part of the world cannot take over clubs to make money. This control prioritizes the wishes of supporters, giving them the controlling voice in how the club is to be run.  The ruling also protects against reckless owners and safeguards the democratic customs of German clubs.  

This acts as a major controlling factor in fending off three-digit money moves, while also laying enough stress on development of young talent. With fans at the forefront, the cost of prices for the Bundesliga is the lowest in the world, earning the maximum audiences in Europe. Fundamentally, fans in Germany consider themselves as a pillar of the game, and not just as an audience. Germans believe that commercialization will raise ticket prices and push organic fans out of stadiums. 

There is a rule that exempts investors who have an interest for more than 20 years from the 51% rule. Clubs like Hoffenhiem, Bayer Leverkusen and Wolfsburg have benefited from the exemption. Investors like pharmaceutical company Bayer AG found the club in 1904, and have owned it after the initial few years. The pharmaceutical giants have invested heavily in both the senior and youth projects of the club over the years, earning a very loyal fan base. 

RB Leipzig was founded in 2009, followed the same pattern. The club came into being when energy drink giant Red Bull rebranded fifth-tier team Markranstädt. Leipzig over the years climbed up the ladder and finished as Bundesliga runners-up in 2016/2017 and qualified for the Champions League.

When Uli Hoeness was elected club president of Bayern Munich in 2016, some 290,000 members of the club voted for the same. At Leipzig, a mere handful –employees of the parent company Red Bull – are afforded the same privilege.

In December 2014, software magnate Dietmar Hopp was agreed upon to be given majority control (96%) of Hoffenhiem. The billionaire had invested heavily in the club for over twenty years and has not really changed things at the club, with the club in the top half of the table this season. 

This double-edged sword has made German clubs languish behind at the European level, with Bayern Munich the only big name that consistently performs at that highest level. Arsenal keeper Bernd Leno had in 2018 said on this situation, “How stupid are we in Germany?” He was speaking about what he perceives as a lack of respect towards investors, whose resources, according to him, benefits clubs and their communities.

On the other hand, Borussia Dortmund CEO Hans-Joachim Watzke supports the filling of stadias and a level playing field for most clubs. In an old interview, Watzke had said that he never wanted to see German fans being “milked” for money “as is happening in England.”

This binds German football very tightly in a socially-knit web. The fans who invest time and money in their clubs, do not just expect money out of it like a millionaire owner would. They look at wider aspects like the grooming of talent in their areas and community services as well. Football, for them, is more than just winning or losing – it’s a way of life.