Bundesliga weighs change of football club ownership rules

Rule barring foreign investors from owning clubs seen as financially limiting

Germany's top football teams are discussing plans to sweep away rules prohibiting foreign investors from owning Bundesliga clubs, amid concern they lack the financial firepower to compete against rivals in the English Premier League and Spain's La Liga.

Christian Seifert, chief executive of the Deutsche Fussball Liga (DFL), the governing body of the country's two top professional divisions, said his organisation has "opened a debate" about changing the "50+1" ownership rule that means club members must hold the majority of voting rights.

In effect, the rule bars commercial entities from owning more than 49 per cent of German clubs in most circumstances.

The regulation, unique to German football, has contributed to a fan-focused culture, helping to ensure low ticket prices and the highest average match day attendances in world football.


Yet, there has been frustration at boardroom level, as the rule has dissuaded wealthy individuals and corporations from investing in German clubs because they cannot gain a controlling stake.

Mr Seifert said his organisation’s board has begun a consultation about altering the rule, ahead of clubs voting on the matter in the next month.

“We need to start an honest discussion . . . about the 50+1 rule,” said Mr Siefert. “We need at least to figure out if between radical positions – keep the market as it is, or blow it away and open up the market completely – there is a way in between.”

Pressure to alter the 50+1 rule has grown in recent years thanks to the riches enjoyed by English Premier League sides, as well as Barcelona and Real Madrid in La Liga.

Broadcasting rights

The Premier League’s 20 teams benefit from their share of £8 billion (€9 billion) in domestic and international broadcasting rights. The value of these rights may fall, after the latest auction to screen top-tier football matches in the UK recouped far less than the current £5.1 billion contract, although bidding to screen matches for certain rights packages is still under way.

Many English clubs, such as Manchester City and Chelsea, have also benefited from wealthy foreign owners that have invested heavily in acquiring players. In Spain, Barcelona and Real Madrid benefit from receiving a larger slice of broadcasting revenues than their domestic rivals.

"When I've had conversations with potential investors, the 50+1 rule has been something that has clearly prevented them looking at Germany, " said Ben Marlow, an executive at 21st Club, a football consultancy. "[If the rule changed], I would expect to see a few takeovers in the reasonably short term."

On Thursday, the DFL reported that teams in the Bundesliga, the top tier of German football, achieved revenues of €3.37 billion in the 2016-2017 season, a 4 per cent increase in revenue year on year. They will earn greater sums from this season, the first in a record four-year €4.6 billion television deal with Sky and Eurosport.

Despite these gains, German clubs still lag behind the highest-earning sides on the continent. Though the Bundesliga is the second highest revenue-generating league in the world, only three clubs – Bayern Munich, Borussia Dortmund and Schalke 04 – are among Europe's 20 richest teams, according to Deloitte.

Mr Seifert said the DFL’s clubs will discuss compromise measures to the 50+1 rule, such as ensuring that club members are still given the right to block changes relating to “football culture”, such as the colour of team’s strip or moving a stadium to a new part of a city or relocating a stadium.

Legal challenges

However, he warned failure to reform would lead to legal challenges to the rule by minority investors at German clubs who have grown impatient at their inability to control commercial affairs at teams. Twenty-four of the 36 clubs in Germany’s top two leagues must vote in favour for a rule change to be enacted.

“I think it’s fascinating at least to try to find a way that combines this very special German football culture, which is admired all over the world . . . with standing terraces, relatively low ticket prices, that welcomes the whole society into the stadium; with economically serious behaviour and opportunities to invest,” said Mr Seifert. – Copyright The Financial Times Limited 2018