German Bundesliga Football Involves Fans, Keeps Oligarchs Out
The highest level of football in Germany, the Bundesliga, is a unique case study of a highly regulated sports league. It’s the 7th-most valuable sports league in the world and the 3rd-most profitable out of the Big Five leagues in Europe (Serie A, Ligue 1, Premier League, La Liga, and Bundesliga). Yet, the Bundesliga’s total expenditure in a transfer window can be dwarfed by a single Premier League club.
The regulations have made Bundesliga a stable, enjoyable league, but what’s holding it back from being on the same level as the English Premier League (EPL)?
Like most footballing nations with a pyramid system, playing in the top flight leads to more financial success. Playing in the Bundesliga means a larger share of national television revenue between clubs. The rest of a team’s money comes from concessions, ticket sales, merchandise, sponsorships, player sales, and European competition qualification.
The Bundesliga table hosts 18 teams. Finishing 1st-4th leads to Champions League qualification, 5th and 6th qualify for Europa League, and 7th for the Conference League. Clubs are awarded more money for advancing through these tournaments.
Photo courtesy Google
The relegation style is different from England or Spain. In Germany, 17th and 18th place go down immediately, with the winner of the 2. Bundesliga and 2nd place automatically promoted. 16th place is pitted against the 3rd-place finisher in the 2. Bundesliga. The two play each other to decide who goes down or up into the first division. Relegation hurts a team’s finances, as there is less media coverage and less money in the lower leagues.
TV money is distributed in a few ways. Around 25% of international broadcast money is evenly distributed across the 18 teams. Based on a club’s international performance, another 50% of broadcast revenue is paid out across five years. The league uses UEFA’s club rankings to determine the 50% share. Another 25% is distributed based on the number of Champions League or Europa League games played.
The most significant difference between the Bundesliga and the Premier League is not on the pitch but in the boardroom.
The 50+1 rule has garnered a lot of attention in recent years. Unlike England, where venture capitalists and oil barons have bought up clubs with little interference, the Bundesliga doesn’t allow for reckless spending. Clubs must hold 50% plus one fan vote to make business decisions. Fans must have voting rights and a say in the club’s operations. It has stopped private investors from making costly decisions without the consent of fans. Clubs cannot play in the Bundesliga or 2. Bundesliga unless they adhere to 50+1.
Though many clubs are private entities, executive power is limited. For example, Bayern Munich are majority-owned by a holding company in their name, but companies like Adidas, Audi, and Allianz have 7-8% stakes in the club ownership. Additionally, Borussia Dortmund is traded publicly on the Frankfurt Stock Exchange. Businessman Bernd Geske has an 8% share of the club, and firms like Signal Iduna and Evonik Industries have minority stakes. The remaining 72% is open to public investment.
Photo courtesy Borussia Dortmund
“The 50+1 rule does significantly more good than harm in Germany,” Dortmund CEO Hans-Joachim Watzke told SportBild in 2016. He’s right, as Germany has some of the lowest ticket prices in Europe, and clubs have some of the smallest debts in world football.
However, loopholes in 50+1 are changing the landscape of German football.
One club is the exception. RB Leipzig is the most disliked club in the Bundesliga because it violates the 50+1 concept. Austrian energy drink maker Red Bull took control of a Leipzig club playing in the 5th division in 2009. Because the Bundesliga only governs the top flight and 2nd division, the 50+1 rule isn’t enforced for amateur or semi-pro teams. Red Bull came in, rebranded the club with the brand logos, and funded the squad.
In 14 years of existence, Leipzig has been promoted to the top flight, qualified for the Champions League every season since 2017-18, made a Champions League semifinal once, won the DFL-Pokal (German Cup) twice, and made the final four times, made a Europa League semifinal, and finished 2nd in the Bundesliga once. They’ve developed some of the best players in Europe, as shown by Chelsea’s purchase of Christopher Nkunku for 60 million euros and Dominik Szoboszlai’s 70 million euro move to Liverpool.
Photo courtesy RB Leipzig
Effectively, Red Bull bought 49% of Leipzig’s club shares, technically not violating 50+1. They found loopholes in the regulations about using Red Bull branding as club logos and sold the remaining 51% of shares to select investors. It’s not the first club to be associated with major corporations. Volkswagen and Bayer Pharmaceuticals own VfL Wolfsburg and Bayer Leverkusen, respectively. However, these clubs are grandfathered into the Bundesliga because these companies owned these teams for over 20 years. Leipzig hasn’t existed for more than 15 years.
The sentiment among fan and executive discourse is Leipzig’s scheme will open the door for similar practices. Rival fans accuse the team of being “plastic,” meaning they lack significant footballing heritage and are a product of an energy drink company’s marketing campaign. Red Bull owns additional football clubs in New York, Brazil, and Austria.
Regardless, Leipzig is the third most valuable club in Germany. It only trails Dortmund in 2nd and Bayern in 1st.
Bayern has won the past 11 league titles. With merit fees awarded by the league based on a club’s finish and performance in Europe, the same club has reaped the awards for 11 unchecked seasons since 2013. Factoring in two Champions League triumphs (2013 and 2020), Bayern’s brand power is unmatched. It’s allowed them to buy elite players, many of whom come from smaller Bundesliga clubs. The player pipeline to Bayern from rival clubs is massive.
Despite efforts by Leipzig and Dortmund to thwart the Bayern monopoly, Dortmund is seeking its first league title since 2012; Leipzig doesn’t have one yet. Bayern has made the most money at the expense of the rest of the league’s prosperity.
50+1 also means clubs have to make tough decisions about squad building. The most high-profile exit from the league is Jude Bellingham, who joined Real Madrid this summer for 103 million euros. That’s 103 million euros for ONE midfielder. Those funds can help a club pay off debt, make stadium improvements, and buy new players in the transfer window. But because most of these clubs don’t have Bayern’s global appeal and don’t win as often as them, they are forced to sell significant assets like star players to raise cash.
German football has the potential to change course if a team can pip Bayern to the title. Dortmund and Leipzig look the most likely to do it. Even teams like Eintracht Frankfurt won the Europa League with a fraction of Bayern’s budget.
Photo courtesy UEFA Europa League
Most notably, German football’s international presence is growing. A new media rights worth around 2.9 billion euros was proposed in February 2023 and would increase global coverage, injecting new cash into clubs. More money can make the table more competitive, improve infrastructure, and wouldn’t require loans from lenders.
The Bundesliga is quite profitable and very socially involved. Many fans of competing leagues want similar policies implemented.
While it may not be the most competitive league, it is highly entertaining and contains some of the best stadiums in Europe.