German football’s so-called 50+1 ownership rule is set to remain in place after Germany’s Federal Competition Regulator, the Bundeskartellamt, accepted commitments offered by the German Football League (DFL) regarding current exemptions to the rule.
As the Regulator announced on Thursday, the three Bundesliga clubs which are currently exempt from the rule — Bayer Leverkusen, VfL Wolfsburg and TSG Hoffenheim — will retain their current status, but the DFL’s statutes will be amended to rule out any further exemptions in future.
What’s more, Leverkusen, Wolfsburg and Hoffenheim will be required to meet stricter conditions regarding member participation, their majority shareholders will not be permitted to balance out losses with additional payments and the clubs will have to pay a form of compensation for the financial advantages they enjoy courtesy of their exemption from 50+1.
The announcement — which is not yet binding, pending final agreement from the clubs concerned — comes as a long-running discussion over the legal status of the 50+1 rule nears its conclusion.
“The DFL’s commitment to erasing from its league statutes the possibility to grant benefactor exemptions removes our concern that a coexistence of clubs, of which only some have been granted benefactor exemptions, may run counter to DFL’s sport policy objectives,” said Bundeskartellamt president Andreas Mundt in a statement.
“It is true that professional sport, and sport associations in particular, continue to be subject to competition rules, and restricting participation in league matches to not-for-profit membership clubs continues to constitute a restraint of competition that has to be legitimized by a sport policy,” he continued.
“Nevertheless, the commitments offered by DFL appear generally appropriate to dispel our preliminary competition law concerns.”
What is the 50+1 rule?
DFL regulations stipulate that 50% of the voting shares in the commercial companies which operate most Bundesliga clubs’ professional football teams remain in the hands of the members of the parent clubs — plus one share.
Advocates of the rule argue that it protects clubs from the sort of majority takeovers by external entities seen in other countries, most notably in England’s Premier League, thus safeguarding the comparatively fan-friendly nature of German football.
Critics, however, lament that it discourages investment in German clubs on the scale required to enable them to compete with top European clubs in international competition, and indeed with Bayern Munich domestically.
What has the Federal Competition Regulator been investigating?
Against the backdrop of a number of challenges to the 50+1 rule on the grounds that it would constitute an artificial restriction on the free market, the DFL turned to Germany’s Federal Competition Regulator for an appraisal of the legality of the 50+1 rule in terms of German and European competition law in 2018.
In 2021, the Regulator reached a preliminary conclusion that the rule did indeed constitute a restraint of free market competition but that this was “unproblematic” given the sporting and sociopolitical objectives it pursues — namely a fair sporting competition among member-orientated football clubs.
The Regulator did, however, find the existence of exemptions to the rule to be problematic. According to DFL statutes, exemptions to 50+1 can be granted if an individual shareholder can prove that they have provided substantial and uninterrupted financial support to a football club over a period of 20 years.
Such exemptions have been granted to pharmaceutical firm Bayer in Leverkusen, automobile giants Volkswagen in Wolfsburg and software billionaire Dietmar Hopp in Hoffenheim.
In 2017, German hearing aid mogul Martin Kind had sought a fourth exemption at Hannover 96, but this was rejected after the DFL found that his financial support for the club not been sufficiently substantial nor uninterrupted.
It was Mr. Kind’s legal threats over 50+1, among other things, which initially prompted the DFL to approach the Bundeskartellamt and launch the process which is now nearing completion, although the affected clubs will first have a chance to officially respond to the agreement.
How have German clubs reacted?
In the meantime, a spokesperson for VfL Wolfsburg told DW that they welcomed the “workable solution for all involved and for the benefit of football”.
Back in March, Bayer Leverkusen chief executive Fernando Carro, an outspoken opponent of 50+1, said that “given the direction of majority opinion in German professional football, it was important to reach a workable solution for all parties. For this reason, we have agreed to this somewhat painful compromise.”
But advocates of 50+1 are also not entirely satisfied and say that the findings do not go far enough.
“It is important that the 50+1 rule has been fundamentally found to be legally conform and has therefore been strengthened,” said Robin Krakau, board member for communications and marketing at Hannover 96 since the removal of the aforementioned Martin Kind.
“However, the advantages which the exempt clubs enjoy remain almost unchanged, thus continuing to put Hannover and others at a competitive disadvantage,” he told DW.
“Fundamentally, we don’t want any exemptions to 50+1 and we’d like to see the currently exempt clubs alter their structures in such a way so as to resemble the rest of the league.”
What about RB Leipzig?
Conspicuous by its absence in the Bundeskartellamt‘s announcement is any reference to RB Leipzig.
Often cited as a fourth exemption, RB Leipzig do adhere to the 50+1 rule on paper, with 99% of the voting shares in the commercial entity which operates the club’s Bundesliga side in the hands of club members. There are, however, as of 2023, only 21 members, all of whom are linked directly or indirectly to Red Bull. Normal fans cannot become voting members.
For many critics, this constitutes a circumvention of the 50+1 rule and affords RB Leipzig structural and financial advantages over the rest of the competition, most notably seen in the high number of transfer deals involving Red Bull Salzburg.
Criticism and rejection of RB Leipzig remains widespread in German football, but a Bundeskartellamt spokesperson explained to DW that the Regulator had not dealt with the case of RB Leipzig since it had not been part of the initial DFL query.
Rather, the extent to which RB Leipzig constitute a member-led football club as required by the DFL’s own statutes is a question for the league itself, and involves associations rather than monopolies law. Similar issues could also be raised at Hertha Berlin, Augsburg, Hamburg and others given the influence wielded by external investors.
As Hannover board member Krakau told DW: “Regardless of the decision, it’s up to the DFL to ensure that 50+1 is consistently implemented among its member clubs. And this is not yet the case.”
What next?
A final agreement to make the DFL statute amendments binding is still to come but German football has committed to the 50+1 rule, at least for the near future.
Earlier this year, German clubs also voted against league plans to enter into a multi-billion euro partnership with a private equity investor, which would have secured an immediate €2 billion investment in exchange for a share of future broadcast rights revenues, partly as a result of vociferous fan protests.
Similar protests led to Bayern Munich’s decision not to renew their current shirt sleeve sponsorship with Qatar Airways.
The general tenor is clear: at a time where debates rage elsewhere over state ownership, sportswashing and Super Leagues, German football clubs — and their fans — want to compete, but not at any price and not at the expense of their status as member-led associations.
Edited by James Thorogood
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