THE independent fan-led review of football governance in England and Wales that was ordered by Westminster in the wake of the failed attempt to form a European Super League in 2021 raised a possibility that alarmed many owners – and delighted a large number of fans.
Namely, the famous 50+1 rule which has existed in the upper echelons of the German game since 1998 and which prevents, a few exceptions aside, private investors from taking complete control of major clubs being brought in down south.
An online petition calling for it to be enforced in the United Kingdom attracted 107,066 signatures and the government pledged to examine different structures and ownership models in other countries in response.
The white paper that was published back in February stopped short, much to the dismay of those supporters who are feeling increasingly powerless as the game they love becomes more and more of a business, of recommending a move towards the system.
There have been myriad benefits for the fans of German clubs; ticket prices are low and attendances high, debt and wages are under control, alcohol is sold on the terraces, traditions are respected and any president they dislike is easily ousted.
But could the 50+1 rule be on borrowed time in Deutschland itself?
For decades, German football clubs were non-profit organisations which belonged entirely to their members, the fans. But when other leagues across Europe started to receive substantial sums of money from the super rich, senior officials recognised they were in danger of falling behind.
In 1998 the German Football Association (DFB) granted them the ability to accept investments from private and public limited companies. On one condition. That fans held the majority of the voting rights.
However, not everyone was enamoured with the situation. Martin Kind, the multi-millionaire hearing aid magnate and president of Bundesliga club Hannover 96, was incensed when his bid to receive an exemption under the “substantial support” criteria was turned down by the German Football League (DFL) in 2018.
Hannover responded to the decision by releasing a scathing statement that described the 50+1 rule as “incomprehensible and obviously wrong” and warning that “all necessary and legal steps” would be taken to overrule it in the German courts.
A compromise was reached following talks with the combative and colourful Kind – who has in the past described his own club as "s****y" and their followers as "a******s" - before Hannover members voted for his removal as president in 2019.
The DFL asked the Bundeskartellamt, the federal competition authority, to examine the rule and provide them with “legal clarity”.
Their preliminary conclusion, which was published in 2021, found that it was not in breach of anti-trust laws. They actually asked for it to be strengthened. They stipulated that “benefactor exemptions” should be dropped in the future so that there was uniformity across the top two divisions.
Bayer 04 Leverkusen, TSG Hoffenheim and VfL Wolfsburg had been granted special dispensations because their owners, pharmaceutical company Bayer AG, car manufacturer Volkswagen and the founder of software giants SAP SE respectively, had funded them continuously over a period of more than 20 years.
The Bundeskartellamt argued the exemptions undermined the objectives of the 50+1 rule, made it easier for those clubs to raise capital than their opponents and skewed the balance of sporting competition instead of contributing to it. They recommended that new “grandfathering” conditions be introduced.
A consultation process is ongoing. But if passed the amendments will give the parent club the power to appoint at least one representative, who is able to veto any changes to “identity-forming characteristics” such as logo, colours or safe-standing capacities, onto the supervisory body of the corporation that invests in the club.
Dietmar Hopp, the billionaire owner of Hoffenheim, has already indicated he will transfer the majority of voting rights back to the parent club in due course meaning the Bundesliga outfit will not be subject to the new rules.
Markus Friedl, a German sports law expert and partner at Pinsent Masons in Frankfurt, explained the reasons for what has been a protracted process.
“The 50+1 rule is highly disputed in Germany from a legal perspective,” he said. “Some say it violates anti-trust laws, European anti-trust laws in particular. Others say there are no problems with it.
“The cartel office came back to the DFL and told them they felt the rule was fine – but they stated that the exceptions to the rule were a problem. The DFL set up a taskforce to look at what they could do with the three clubs, Bayer Leverkusen, Wolfsburg and Hoffenheim, who had exemptions.
“The new guidelines have not been published in whole. But it appears like the DFL will not allow any further exemptions. Furthermore, they will agree measures with the two clubs with exemptions that sees their corporate groups’ influence diminish and other groups’ influence increase.
“It is definitely an attempt to protect the 50+1 rule against legal challenges, to tighten it so that it is compliant with the German legal system, in particular with German competition laws.”
But RB Leipzig, which is owned and run by Austrian energy drink manufacturer Red Bull GmbH, have shown the 50+1 rule can be circumvented in recent years. The Saxony outfit, who rose from the fifth tier to the top flight in the space of seven seasons thanks to the millions Red Bull poured in, are loathed by rivals fans in Germany as a consequence.
“The football company is owned by the club and they receive the licence needed to compete in the Bundesliga,” said Stephan Dittl, an Eintracht Frankfurt fan and freelance lawyer. “But the club only has 20 members (Borussia Dortmund had, in stark contrast, 168,163members last year) and they are employees of Red Bull.
“There is a lot of unhappiness among the supporters of other clubs in Germany about what they have done. The worst situation came last season when they won DFB-Pokal (the German Cup). One of their players poured a bottle of Red Bull into the cup. Usually the players pour beer into the cup. A lot of people disliked that.”
Despite the widespread anger about the Leipzig approach, opinions about the 50+1 rule remain sharply divided across the football-obsessed nation because of the inability of German clubs to compete with Bayern Munich in the Bundesliga as well as with European rivals who are bankrolled by wealthy investors.
Dortmund, Eintracht Frankfurt and RB Leipzig were knocked out of the Champions League at the last 16 stage by Chelsea, Napoli and Manchester City respectively last month. Union Berlin were beaten by Union Saint-Gilloise of Belgium in the same stage of the Europa League.
Will their followers grow frustrated at the lack of success on the continent and agitate for change in future? That very much appears to be the direction of travel.
Kind put forward a motion calling for the 50+1 rule to be revoked way back as in 2009. It was defeated by 32 of the 36 Bundesliga and 2. Bundesliga clubs.
But in another vote in 2018 the outcome was nowhere near as emphatic. Only 18 clubs backed its retention. Karl-Heinz Rummenigge, the former German internationalist and Bayern president, opposed it on the grounds that European clubs were pulling away from them.
Both Dittl and Friedl can foresee further issues arising in the years to come as far wealthier rivals in England, France, Italy and Spain continue to flourish and are uncertain if the rule would withstand a legal challenge like that which Kind threatened.
“There are traditionalists who don’t want foreign investors into clubs, who want German football to be a sport first and foremost and a business second,” said Friedl.
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“But there are modernists who feel the UEFA Financial Fair Play rules are not really working and who want German clubs to be able to compete internationally with investor-led clubs. The opponents of the 50+1 rule tend to have the loudest voices and make the most noise.”
He added: “In the short and mid-term I expect the rule to stay. In the long-term, my personal opinion is that fans of German clubs will see they are not competitive enough when it comes to playing against clubs from the larger European leagues.
“It depends on a lot of factors. The DFL is now optioning its media rights and a lot of the money they take in will flow out to the clubs and help them come out of the red after Covid. We will see what the result of that.
“But, at the end of the day, every fan wants his or her club to be successful. If this is not happening and if they feel that European success can only be achieved with outside money, there might be a new wave of discussion on the 50+1 rule over and whether it should stay or not. But that is a long-term scenario.
“A short-term scenario might be that an investor such as Martin Kind who is unsatisfied with the situation takes legal action. The cartel office might be fine with the 50+1 rule, but a German court has never ruled on it. If a German court ruled on it they may ask the European Court of Justice what they think about it.
“The European Union guarantees free movement of capital. A private investor in a German club does not have control. That could be seen as a restriction of capital movement by the EU. They might rule that is goes against European law. But nobody knows for sure until it is challenged.”
“It is a good situation,” said Dittl. “For now, the relationship between the club and the supporters is quite strong. Tickets are not as expensive as they are in England. We feel that in England football is viewed as an entertainment business. It is different in Germany. So most people are happy.
“But fans know that, outside of Bayern Munich, there is no way German clubs can compete with the likes of Paris Saint-Germain, Manchester City and clubs like that. You have the national market and the international market. Internationally, German clubs have no chance.
“It was quite a surprise when Eintracht Frankfurt won the Europa League last season. But it was not the Champions League. Yes, we got to the knockout rounds of that competition this season. But everyone saw how we got on at Napoli (they lost 5-0 over two legs).
“A lot of people want to keep it. But I am not sure it will be the same in five or 10 years. The more money available in the market and the more opportunities for circumvention, I don’t know if people will care so much about it.”
