In the February issue of Labour Affairs we outlined the Workers Party policy advocating that fans take control over their own local football clubs.  It was noted that this is still to a large extent the case in countries such as Germany. There fan-controlled clubs are able successfully to fight off threats from powerful financial interests, as outlined below in an AP article.

BERLIN (AP) — If the German soccer league thought it had ended fans’ protests against outside investors, it was proven wrong on Sunday [25 Feb].

Both Borussia Dortmund and Eintracht Frankfurt supporters displayed banners during their teams’ respective games in support of German soccer’s 50-plus-1 rule that limits how much influence an outside investor can wield over a club. The rule states that club members need to retain control of voting rights – at least 50% and one vote.

“50-plus-1 is the foundation of our sport. Football lives through its fans!” the Dortmund supporters said on banners during their team’s 3-2 loss to visiting Hoffenheim. 

The Frankfurt fans briefly interrupted their side’s match against Wolfsburg by throwing small plastic balls onto the field behind one of the goals early in the second half. At least one small plastic pig was also thrown, landing beside one of the goal posts.

The fans also held a giant banner criticizing Volkswagen-backed Wolfsburg with an expletive, saying the “investor club” should be excluded from the German soccer federation because it does not adhere to the 50-plus-1 rule.

The game was held up for around six minutes while the items were removed before play resumed with Wolfsburg leading 2-1. Omar Marmoush went on to score in stoppage time to salvage a 2-2 draw for Frankfurt.

Sunday’s protests came despite the German soccer league’s midweek decision to scrap its controversial plan to sell a share in clubs’ future media rights income to an outside investor for an upfront payment.

Frankfurt’s supporters were objecting to Wolfsburg’s status in contrast to their own, where fans have a majority say in how the club is run.

The multi-sport club VfL Wolfsburg was founded in 1945, only seven years after the city of Wolfsburg was itself founded for Volkswagen factory workers. Wolfsburg is still backed by the German auto manufacturer, one of only two exceptions to the 50-plus-1 rule.

Bayer Leverkusen is the other exception, as it was founded for Bayer factory workers. The pharmaceutical giant still owns the club. Both Wolfsburg and Leverkusen are granted exemptions from 50-plus-1 because they’ve had the same backers for more than 20 years.

Hoffenheim was another exception, but backer Dietmar Hopp transferred most of his voting rights back to the club last year to bring it in line with the rule.

Leipzig, which was founded by Red Bull in 2009, dealt with the 50-plus-1 rule by limiting membership to a select few members associated with the energy drinks manufacturer.

The rule was strengthened last year when it was cleared by the Bundeskartellamt(Federal Cartel Office), but it remains a sticking point for supporters and club officials whose interests often divulge.

American investment group 777 Partners took over Hertha Berlin as its majority shareholder last year, but club members still retain the majority of voting rights. 

The league’s latest plan to bring in an outside investor for a share of media rights income led to extensive protests across Germany’s top two divisions over the last two weekends. No further protests were expected after it abandoned the idea on Wednesday.

Union Berlin fans were among those to celebrate the league’s decision on Saturday, and Dortmund’s fans followed suit on Sunday by displaying a banner that said, “Game, set and match – the winner is football.”

The 50+1 rule:

Explaining the Bundesliga’s 50+1 rule

Football in Germany is popular for many reasons: top-quality play, the highest average attendances in world football, low ticket prices and a great fan culture. A major contributing factor in this is what’s called the the ’50+1′ ownership rule. 

bundesliga.com takes a closer look at what the rule is, and exactly how and why it works…

“The German spectator traditionally has close ties with his club,” Borussia Dortmund CEO Hans-Joachim Watzke said in 2016. “And if he gets the feeling that he’s no longer regarded as a fan but instead as a customer, we’ll have a problem.”

The 50+1 rule guards against this. The name of the rule refers to the need for members of a club to hold 50 percent, plus one more vote, of voting rights – i.e. a majority. In short, it means that clubs – and, by extension, the fans – have the ultimate say in how they are run, not an outside influence or investor.

Under German Football League (DFL) rules, football clubs will not be allowed to play in the Bundesliga (or second division) if outside investors have the greatest say.

In essence, this means that private or commercial investors cannot take over clubs and potentially push through measures that prioritise profit over the wishes of supporters. The ruling simultaneously protects against reckless owners and safeguards the democratic customs of German clubs.

Historically, German teams were not-for-profit organisations run by members’ associations, and until 1998 private ownership of any kind was prohibited. The 50+1 rule, which was introduced that year, helps explain why debts and wages are under control and why ticket prices remain so low compared to other major leagues in Europe.

It should be noted that clubs adapted to these changes in different ways, with member ownership taking various forms. Many of the teams we know in the Bundesliga are, in a legal sense, a limited or joint-stock company, created as subsidiaries of the club (many of which have other departments that include other sports and/or women’s teams) to oversee the men’s first team. Some are floated on the stock market. And clubs below the DFL-regulated Bundesliga and Bundesliga 2 also follow similar approaches, partly because it aids compliance in the case of promotion.

However, the bottom line is that the parent club – i.e. the members’ association – retains majority control in some way.

Using the concrete example of Bayern Munich, the shareholders of the men’s first team (FC Bayern München AG) are the members’ club (FC Bayern München e.V. – 75%), Adidas (8.3%), Allianz (8.3%) and Audi (8.3%).

Things are organised differently at Dortmund. The members’ club (consisting of 168,163 members as of November 2022) actually only controls 4.61% of Borussia Dortmund GmbH & Co. KGaA, which oversees the men’s first team, reserves and U19s. Signal Iduna hold 5.98% of shares, Bernd Geske 8.24%, Evonik Industries 8.19% and the remaining 72.27% is floated on the stock market. However, the management company in charge of running the football club, Borussia Dortmund Geschäftsführungs-GmbH, is 100% owned by the members’ club, ensuring control of matters and thus compliance with 50+1.

And, as Watzke – the CEO of Borussia Dortmund Geschäftsführungs-GmbH and therefore CEO of the football club – argued, the upshot of the system is that fans are usually not taken for granted.

“The 50+1 rule does significantly more good than harm in Germany,” Watzke told SportBild, before suggesting that most prospective private investors would primarily be motivated by profits.

“Most clubs won’t get a Roman Abramovich, who in the first place wants to see Chelsea winning. Most of the investors want to earn money. And where do they get it from? The spectators.”

More recently there have been challenges for the 50+1 ruling. In 2009, hearing aid magnate and Hannover president Martin Kind sought to overturn it, but 32 of the other 35 professional clubs voted against the proposal. And in 2017, he sought an exemption to the ruling, which was refused the following year by the DFL.

His initial proposal was also in the same year that RB Leipzig was founded, when Austrian energy drink giant Red Bull purchased the playing rights of fifth-tier team Markranstädt and rebranded the club. Leipzig then climbed through the divisions to finish as Bundesliga runners-up in 2016/17 and qualify for the UEFA Champions League.

But while thousands of Bayern’s now 300,000+ members – the largest membership of any sports club in the world – are eligible to vote for Herbert Hainer as club president, for example, a mere handful – all employees of the parent company – are afforded the same right at Leipzig.

Another exception was agreed upon in December 2014, when software billionaire Dietmar Hopp was given the green light to take majority control of Hoffenheim after investing consistently over two decades in the club he once played for as a boy.

“Crucial in the assessment of Hoffenheim’s request was that for more than 20 years Dietmar Hopp has provided considerable financial support for both the professional as well as the amateur teams of the club,” a DFL statement read at the time.

However, in early 2023, it was reported that Hopp was preparing to return his majority voting rights to TSG 1899 Hoffenheim Fußball-Spielbetriebs GmbH, granting members an overall say in the running of the club. This would return the club to compliance with 50+1, although he would still retain his position as majority shareholder. It shows both the power of fans and also that clubs can change their structure to comply.

With foreign owners pumping billions into other leagues, some German clubs also feel that a change – not necessarily abolition of the rule – is required in order to stay competitive on a global level.

Former Bayern general manager and president Uli Hoeneß, whose forward-thinking approach over several decades allowed the Munich club to become the force they are now, has expressed concern that German clubs could be left behind European rivals financially, given laxer attitudes to ownership across the continent. He has said that it should be left up to individual clubs to decide if they open the door to outside investment, perhaps allowing so-called smaller clubs a greater chance to compete with most established names.

But others favour the retention of a ruling that has helped to fill stadia and create a memorable matchday experience. Watzke told SportBild that he never wanted to see German fans being “milked” for money “as is happening in England.”

Praise for the rule hasn’t just come from within Germany, though. 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.”

A decade on, that statement still rings true, with talk of financial issues or Financial Fair Play contraventions non-existent in Germany, while news of economic struggles and FFP sanctions are common in other leagues around Europe.