Football fans hoping that 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 suffered a setback.
English fans rallied in their support of the Bundesliga’s ‘50+1’ rule in the aftermath of the failed European Super League project in April, which saw the Big Six English clubs sign up, but no German teams join.
Manchester United supporters were particularly vocal in support of the German structure.
Manchester United fans have been among the most vocal promoting the German system
Supporters across England have seen benefit in the ’50+1′ ownership model to give fans power
They were photographed with ’50+1′ banners inside United’s training ground and at Old Trafford, as they as they vented their fury at the club’s support for the project
But the vaunted rule is now being questioned in Germany, itself.
The German markets authority has raised the questions, with some lawyers even suggesting it could be the beginning of the end and at the very least that it underlines why it won’t work in England.
Under the system, which has been in force in Germany’s Bundesliga since 1999, members have controlled 50 per cent of the votes plus one in the clubs’ parent companies, limiting the power of private investors.
The ’50+1′ rule has attracted 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 little more than 48 hours.
United fans displayed banners during protests at the club’s training ground and stadium
They also held placards with the ’50+1′ slogan during their club’s match against Fulham
It reinvigorated long-standing animosity from Manchester United fans towards the club’s owners, Avram and Joel Glazer, and prompted protests against the owners of other clubs including John W Henry at Liverpool and Stan Kroenke at Arsenal, with many demanding more power for fans.
As the battle lines were drawn, Culture Secretary Oliver Dowden also expressed the government’s interest in the German approach.
Now, the threat of the Super League has subsided, the ’50+1′ system will be considered in the government’s fan-led review of football, which started taking evidence last week.
And the strength of feeling among English fans can be seen in a petition to ‘enforce the “50+1” rule for professional football club ownership in the UK’, which has attracted almost 107,000 signatures.
However, following a four-year investigation, the Bundeskartellamt, which is the equivalent to the UK’s Competition and Markets Authority, has finally issued a complex decision that may have far-reaching consequences.
However, the German markets authority has said the application of the rule is ‘problematic’
United fans have a long history of protest against Joel and Avram Glazer who own the club
Joel (right) and Avram Glazer own Manchester United – the family took control in 2005
The Bundeskartellamt has said that the ‘50+1’ rule restricts competition, under European law, but this can be allowed because the German football league is using the rule to ‘maintain the club character of the sport and ensure a certain even balance in sports competition’.
It remains to be seen if UK authorities would have the same interpretation.
Culture Secretary Oliver Dowden says he will legislate to change football governance if necessary
The issue for the German league, however, is that the Bundeskartellamt found the application of the 50+1 rule is ‘problematic’, since it allows three clubs exemptions – Bayer Leverkusen, Wolfsburg and Hoffenheim – while forcing the others to comply.
This could open the door to challenges from the other clubs, who may also demand exemptions. For example, in September 2017, Bayern Munch CEO Karl-Heinz Rummenigge said he felt it should be left to each club to decide if they welcome outside investment.
The investigation by the Bundeskartellamt was prompted by the Deutsche Fußball Liga (DFL or German Football League), which sought reassurance that it was compliant with competition law following a complaint to the markets authority.
Manchester United, Manchester City, Liverpool, Chelsea, Arsenal and Tottenham are the six English clubs who signed up to the deeply unpopular European Super League
The authority said in a statement on Monday: ‘The decision requested by DFL that there are no grounds for action by the Bundeskartellamt in this matter cannot be issued at this stage.
‘The DFL now has the opportunity to comment on the Bundeskartellamt’s preliminary assessment of the matter. The clubs and investors admitted as third parties to the proceeding can also give their comments.’
The decision creates a ‘catch 22’ for the German league. On the one hand, the authority says the restriction of competition through 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’s CEO Karl-Heinz Rummeniggehas said German club’s should have more say on private investment
Low ticket prices and fan enfranchisement ensure a vibrant atmosphere in Germany
On the other hand, if the league uses this argument to justify the rule, then it has to apply it fairly for all and since it grants exemptions to some clubs and not others, it may not be achieving that.
WHAT IS ’50+1′?
It’s a system used by the German Football League (DFL) to ensure clubs don’t fall under the influence of external investors such as Russian oligarchs or Middle Eastern sovereign wealth funds.
Basically, 50 per cent of the club’s shares, plus one share, must belong to members – the fans of the team.
This ensures the supporters retain majority voting rights on issues affecting the club and one single investor cannot take control.
Without adherence to the 50+1 rule, the DFL would not grant a club a licence to play in the Bundesliga.
There are exemptions for Bayer Leverkusen, which was founded by employees of the pharmaceutical firm, Bayer, in 1904, and Wolfsburg, which grew out of the community of workers at Volkswagen.
Investors can apply for an exemption if their commitment is beyond 20 years, which includes Hoffenheim.
A complex situation involves RB Leipzig, which is funded by the energy drinks company Red Bull. The club hasn’t broken 50+1 ownership rules, but instead of having thousands of members democratically involved in making decisions, they have just 20 members, all employees of Red Bull.
‘The Bundeskartellamt has essentially prohibited the 50+1 rule,’ said one lawyer spoken to by Sportsmail with detailed knowledge of the system.
‘The exemptions given to three clubs cannot be undone, as this would be dispossession. Therefore, in my view, the transfer of 50+1 to England is impossible, where there are numerous investor-led clubs.’
Another lawyer, who spoke to Sportsmail, agreed it would be difficult to implement here.
‘I think the problem that the Germans have and English football would have is that capital investors have property rights which it would be 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 to allow deviation from the previous not-for-profit model, but enforced moving the other way would be challenging as investors would need to be compensated somehow.’
Following the announcement of the European Super League, the UK government promised to drop a ‘legislative bomb’ on the project.
One of the options on the table was believed to be amendments to competition law, although the details of such a change have not been made clear.
After the demise of the breakaway, government has continued to make clear that it is prepared to legislate to improve the governance of football and enhance the voice of fans.
Ministers are now waiting for the report of the fan-led review before deciding on the next steps. An interim document is expected in July with a final version into autumn.
In response, some clubs, including Chelsea and Tottenham, have announced plans to introduce fan representatives onto their boards, but this has not gone far enough for supporters’ groups.
The German Bundesliga will now have to give it’s opinion to the German authorities over ’50+1′