Football fans hoping a German-style ownership model can be adopted to curtail the power of private investors like the Glazers, Stan Kroenke and John W Henry have had a setback.
England fans supported the Bundesliga’s ’50+1′ rule in the wake of the failed European Super League project in April, in which the Big Six English clubs applied but no German teams entered.
Manchester United supporters were particularly vocal in support of the German structure.
Manchester United fans were among the loudest promoting the German system
Supporters across England have seen advantage of the ’50+1′ ownership model to empower fans
They were photographed with ’50+1′ banners in United’s training ground and at Old Trafford, expressing anger at the club’s support for the project
But the vaunted rule is now being questioned in Germany itself.
The German market authority has raised the questions, with some lawyers even suggesting that this could be the beginning of the end and at the very least underlining why it won’t work in England.
Under the system, in effect in the German Bundesliga since 1999, members hold 50 percent of the vote plus one in the parent companies of the clubs, limiting the power of private investors.
The ’50+1′ rule has drawn attention here since 12 clubs from England, Spain and Italy, including Real Madrid, Barcelona and Juventus, announced they were starting a Super League. A project that collapsed in just over 48 hours.
United fans showed banners during protests at the club’s training ground and stadium
They also had signs with the slogan ’50+1′ during their club’s match against Fulham
It fueled longstanding animosity from Manchester United fans towards the club’s owners Avram and Joel Glazer and sparked protests against the owners of other clubs, including John W Henry at Liverpool and Stan Kroenke at Arsenal, with many taking more power. demanded for fans.
As the battle lines were drawn, Culture Minister Oliver Dowden also expressed the government’s interest in the German approach.
Now that the Super League threat has passed, the ’50+1′ system will be considered in the fan-led assessment of football, which began gathering evidence last week.
And the strong feelings of English fans are evidenced by a petition to ‘enforce the ’50+1′ rule on ownership of professional football clubs in the UK’, which has attracted nearly 107,000 signatures.
But after a four-year investigation, the Bundeskartellamt, the equivalent of the UK’s Competition and Markets Authority, has finally made a complex decision that could have far-reaching consequences.
However, the German market authority has said that the application of the rule is ‘problematic’
United fans have a long history of protesting against Joel and Avram Glazer who own the club
Joel (right) and Avram Glazer own Manchester United – the family took charge in 2005
The Bundeskartellamt has said that the ’50+1′ rule restricts competition, under European law, but this may be allowed because the German football league uses the rule to “maintain the club character of the sport and ensure a sure balance in the sport’ match’.
It remains to be seen whether the UK authorities would have the same interpretation.
Culture Secretary Oliver Dowden says he will legislate to change football governing body if necessary
The problem for the German league, however, is that the Bundeskartellamt found the application of the 50+1 rule ‘problematic’, as it allows exemptions for three clubs – Bayer Leverkusen, Wolfsburg and Hoffenheim – while the others are forced to abide by it.
This could open the door to challenges from the other clubs, who may also demand waivers. For example, in September 2017, Bayern Munch CEO Karl-Heinz Rummenigge said he felt it should be left to each club to decide whether they welcome outside investment.
The Bundeskartellamt’s investigation was prompted by the Deutsche Fußball Liga (DFL or German football league), which sought reassurance that it was complying with competition law after complaining to the market authority.
Manchester United, Manchester City, Liverpool, Chelsea, Arsenal and Tottenham are the six English clubs that have signed up for the highly unpopular European Super League
The authority said in a statement Monday: “The decision requested by DFL that there are no grounds for action by the Bundeskartellamt in this case cannot be given at this stage.
“The DFL now has the opportunity to comment on the preliminary assessment of the case by the Bundeskartellamt. The clubs and investors who have been admitted as third parties to the procedure can also make their comments.’
The decision provides a ‘catch 22’ for the German league. On the one hand, the authority says that the restriction of competition by the 50+1 rule is acceptable if it is used to promote sporting balance.
Germany’s 50+1 club ownership model keeps more power in the hands of the supporters
Bayern Munich CEO Karl-Heinz Rummeniggehas said German clubs should have more say in private investment
Low ticket prices and fan rights create a lively atmosphere in Germany
On the other hand, if the league uses this argument to justify the rule, then it must apply it fairly for everyone and since it grants exemptions to some clubs and not others, it may not achieve that.
WHAT IS ’50+1′?
It is a system used by the German Football League (DFL) to ensure that clubs are not influenced by outside investors such as Russian oligarchs or Middle Eastern sovereign wealth funds.
In principle, 50 percent of the club’s shares, plus one share, must belong to members – the fans of the team.
This ensures that supporters retain majority voting rights on issues affecting the club and that a single investor cannot take control.
Without compliance with the 50+1 rule, the DFL would not license a club to play in the Bundesliga.
There are exceptions for Bayer Leverkusen, which was founded in 1904 by employees of the pharmaceutical company Bayer, and Wolfsburg, which grew out of the community of employees at Volkswagen.
Investors can apply for an exemption if their commitment lasts longer than 20 years, including Hoffenheim.
A complex situation concerns RB Leipzig, which is financed by the energy drink company Red Bull. The club has not broken the 50+1 ownership rules, but instead of democratically involving thousands of members in decision-making, they have just 20 members, all Red Bull employees.
“The Bundeskartellamt has essentially banned the 50+1 rule,” said a lawyer approached by Sports post with detailed knowledge of the system.
“The exemptions given to three clubs cannot be revoked, because this would be expropriation. Therefore, in my opinion, the transfer of 50+1 to England is impossible, where there are many investor-led clubs.”
Another lawyer, who spoke with Sports post, agreed that it would be difficult to implement here.
“I think the problem with Germans and English football is that capital investors have property rights that are very difficult to take away,” said Noel Beale, a competition expert at Burges Salmon.
“I note that when the German rule was introduced in 1999, it was intended to allow deviation from the previous non-profit model, but being forced to go the other way would be challenging because investors somehow have to be compensated.’
Following the announcement of the European Super League, the British government promised to drop a ‘legislative bomb’ on the project.
One of the options on the table would be an amendment to competition law, although the details of such amendment have not been made clear.
After the breakout, the government has continued to make it clear that it is ready to legislate to improve football governance and strengthen the voice of fans.
Ministers are now awaiting the report of the fan-led evaluation before deciding on the next steps. An interim document is expected in July with a final version in the autumn.
In response, some clubs, including Chelsea and Tottenham, have announced plans to introduce fan representatives to their boards, but this does not go far enough for supporter groups.
The German Bundesliga will now have to give its opinion to the German authorities on ’50+1′