The German Alternative

Posted on October 18, 2010 by


Debt is a depressing term. Nobody likes the word, especially when the term is thrown about your beloved football club. This week we’ve seen a farce of court cases, public outcries , passionate scousers, and as far as I’m concerned, the take over of Twitter, that is the Liverpool FC situation with the Royal Bank of Scotland and the previous owners of the club, Tom Hicks & George Gillet. The week before that, we were all presented with Manchester Uniteds annual financial records that stated clearly that Malcom Glazer has done fantastically well at transforming the most profitable club in England, into a crippled mess. Both clubs stuck in a hole of debt, depressing the nation, all because of these foreign investors who have turned the supposed best league in the world into a financial rollercoaster for Englands most cherished clubs.

Perhaps this would be a good time to mention the German Bundesliga model to running a football club.

It stands up to the conservative giants of Spain & Italy, with their pyramid system of the usual teams at the top and the usual teams at the bottom, confidently waving them aside with its competitive league – five different sides have won the title in the past ten years and its full stadia of passionate fans. As well as this, the Bundesliga shapes up beside the Premier League the same way a smarter, younger brother would look to his older, louder sibling with a tone of sympathy and concern in his eyes. Although the German league might not be as flashy or successful as its English equivalent, its built on much stronger foundations and the envy of most around England, especially in Manchester and Liverpool.

Their clearly doing something right. The Bundesliga lays claim to the highest attended league in the world,with an average attendance across the league at 42,565 per game. ( Englands Premier League can only boast 35,600, while La Liga sits at 29,124 per game and Italy drags up the rear in 25,304 per game) and have broke the record five years running now. It has the cheapest season tickets throughout the top leagues across the continent.

For example, at Dortmund you can pick up a ticket for £10, and i mean pick up, bundesliga rules state that clubs must limit season tickets so anyone can show up on the day and buy a ticket. Oh and if that isnt enough, the ticket doubles as a free train home. Can you imagine a ticket to Stanford bridge costing that amount and covering your train back across London?

I hide no admiration for the Bundesliga, in my opinion it is the epitome of modern football, the way it should be run.For everything the Premier League stands for in the sense of why a free market system doesn’t work in football with the inflation of ticket prices and debt. The Bundesliga equally shows how effective a league system in which a smart governing body with the fans interest at heart, can flourish.

The league broke past the £2 billion mark in 2009 signalling a landmark of progress in Germany. It now brings in more sponsorship deals than any other in Europe, at £573mil a season, along side a rise in the revenue from broadcasting rights over the past few years, now reaching £594mil. Although probably the most impressive feature of all this is the fact that its all virtually debt free.

Recent figures show that Manchester United’s debt alone, is £156mil more than the combined debt in the Bundesliga. In England we also have the current carry on at Liverpool based around a meltdown of the clubs finances, as well as Porstmouth, & Crystal Palace, who struggle to survive while new bidders come in every day to dice with our football institutions and leave our domestic game on even weaker ground.

Figures published from Deloitte’s accountancy figures for the 2007-08 season(its probably much worse now) showed that every single club in the Premier League was in debt except one , Aston Villa. The Spanish are no better, La Liga has a combined debt of around £3.5billion – and its rising, aswell as concerning news that only one club (Numancia) made a profit outside of Barcelona or Madrid last season. In Italy where debt isnt as big a problem as perhaps it is in Spain and England, they struggle to make any significant effort at filling their stadiums while their domestic game is going through its most difficult period in decades.

So how do they do it? Whats the secret to our new Messiah’s of the beautiful game? Why is European football falling apart in a pit of doom while Germany prospers? Well its a ruling simply named ‘the 50+1 rule’. It’s basically a rule making it impossible for someone to own a majority share in any club in Germany. Every club in Germany is owned by fan shareholders that make up atleast 51% of the total shares of the club, meaning even if a single entity did own 49% of a clubs shares, they couldn’t treat it like a play thing or transform it into a failed money making scheme like so many examples in England. The only exception to this is if a company wants buy the majority shares in a club they can – after they’ve spent 20 years as minority share holders and proved their dedication to the fans of the club and the German FA. I struggle to hold back from laughter at the thought of the English FA trying to implement that over a boardroom table to Malcolm Glazer or Hicks & Gillet when they first came to buy United or Liverpool.

Ofcourse there are claims that the English system does have its examples of success, certain examples of Aston Villa with Randy Lerner or Chelsea with Roman Abramovich are good calls to defend the English system and they havent fallen on death ears in Germany. Martin Kind, president at bundesliga outfit Hannover 95, has passionately fought the 50+1 rule for years now, claiming it limits German teams in Europe and smaller German clubs against the bigger brawlers in the league.

“The rule means the loss of many Bundesliga clubs’ ability to compete nationally and internationally. And in some ways it prevents further development of German football, especially those clubs who play in the lower half of the Bundesliga as they do not have enough financial resources.”

And he may have a case, if you exclude Bayern Munich’s appearance in last season’s Champions League final, no German club has got to the premier club competition since 2001 when Leverkusen where comfortably brushed aside by Real Madrid and that Zidane volley. That the level of competition is down to the demise of Bayern Munich in recent years and perhaps that the league attendances are simply down to the low ticket prices.

Personally, I dont agree with the criticism of the league set up. This is a league thats been set up by smart people with the core rules put in place with the average fan’s interest at heart. The progress of the league might not be as quick and apparent as a new club in England with its new billionaire owner, but the progress is there in facts. The Bundesliga over taking the SerieA last season in the UEFA coefficients giving them an extra Champions League spot showed that the league is certainly making a mark in Europe, i can only foresee more success for the best run League in the world.

Luckily for those of us who enjoy the German setup, when Kind proposed this to the German FA, they put it to the 36 teams across the two divisions and 35 where in favour of keeping the current set up. Kind was laughed out of town and thankfully for the sport, it seems the 50+1 rule looks set to keep things in order in at least one small corner of the world of football, for now.

Posted in: Europe