German Football and the 50+1 Rule
Germany’s 50+1 rule is the source of much pride and envy among football supporters, but what exactly is it? German football expert Matt Ford breaks down the rule’s origins, controversy and explains why it’s now under threat.
From intricate choreographies and spectacular pyrotechnics to bouncing terraces and deafening noise, German fan culture can look and sound hugely impressive.
This February, Borussia Dortmund ultras on the club’s famous Südtribüne created two epic displays in the space of just five days.
Ahead of the Bundesliga game against Eintracht Frankfurt, they produced a two-part tribute to their city and club, featuring a gigantic tapestry hoisted from the roof, two huge banners unfurled in the middle of the stand and thousands of coloured sheets.
And then, for the visit of Paris Saint-Germain in the Champions League, they produced a display which covered three of the Westfalenstadion’s four towering stands.
But those few minutes – those snapshot moments which get beamed around the world – are just the spectacular tip of the iceberg. The flags, banners, flares and confetti seen in stadiums across Germany are not only the product of weeks and months of preparation and organisation; they are also representative of something which goes much deeper and is much less tangible.
They’re an expression of agency, engagement, involvement, ownership and co-determination – the difference between passive consumption and active support of a football club.
We all talk about how our club belongs to us, the fans, how without fans football is nothing. But most of the time there’s an emptiness to those words. Our clubs generally belong to millionaire magnates, billionaire businessmen and sovereign wealth funds.
We may be ‘members’, but it’s ultimately no different to being a member of a gym or having a loyalty card at a local supermarket. We don’t have a say.
We all talk about how our club belongs to us, the fans, how without fans football is nothing. But most of the time there’s an emptiness to those words.
Now, let’s not kid ourselves: top German football clubs are also multi-million-euro businesses – at least partially – but there is a fundamental difference.
The pulsating atmosphere, the vibrant fan culture, the standing terraces, the affordable tickets, the socio-political engagement – even the virulent protests, which push the boundaries of what is acceptable – are a result of the fact that, legally and theoretically at least, German football fans do have a say.
And at the root of that is the so-called 50+1 rule.
What exactly is the 50+1 rule?
Pull up the Wikipedia entry for any German football team and you will find the club’s full, official name, usually complete with a strange array of letters, numbers and abbreviations. “Fußball-Club Bayern München e. V.,” for instance, or “Ballspielverein Borussia 09 e. V. Dortmund.”
Complicated names, but deciphering them is key to understanding the 50+1 rule. So, first of all, a bit of German social history:
Back in the 19th century, the emerging German middle classes founded clubs to organise their bourgeois pursuits: reading clubs, sailing clubs, gymnastics clubs, riding clubs and, eventually, football clubs.
The clubs were democratic members’ associations and were placed on registers, making them officially registered clubs – or “eingetragene Vereine”, abbreviated as “e. V.,” letters which appear in the full titles of most German football clubs today.
German football clubs remained not-for-profit organisations controlled by voting members until 1998, when the German Football League (Deutsche Fußball Liga or DFL) altered its regulations to allow clubs to out-source their professional football operations into limited companies.
This out-sourcing opened teams up to private investment on the condition that the original parent club, the “e.V.,” retained 50% of the voting shares in the company, plus one share.
The “50+1” rule therefore ensures that a club’s members, in other words the supporters, always hold the majority of the voting rights and prevents external entities from acquiring a majority stake, as is the case with most English football clubs.
Bayern Munich, for example, may have sold 8.33% stakes in the “Bayern Munich AG” (a joint-stock company) to Audi, Allianz and Adidas respectively, but the remaining 75% belongs to the “Bayern Munich e. V.” and its members.
The “50+1” rule ensures that a club’s members, in other words the supporters, always hold the majority of the voting rights and prevents external entities from acquiring a majority stake.
Borussia Dortmund use a slightly different model. The “Borussia Dortmund GmbH & Co. KGaA” (a limited company) is listed on the stock exchange and the “Borussia Dortmund e. V.” only has a 5.53% stake. Crucially however, it retains majority voting rights.
As of 2020, only five Bundesliga clubs are yet to out-source their professional football operations and therefore remain 100% “e. V.”: Schalke 04, Mainz 05, Fortuna Düsseldorf, SC Freiburg and Union Berlin.
Exceptions to the 50+1 Rule and the Case of RB Leipzig
If an investor can prove they have “supported the sport of football within the parent club substantially and continuously for more than 20 years,” they are entitled to apply for an exemption from the 50+1 rule to enable them to take over full control of the club.
The first exemptions were granted to Bayer Leverkusen (in 1999) and VfL Wolfsburg (in 2001), “works clubs” who had been backed by pharmaceutical giants Bayer and car manufacturer Volkswagen since 1904 and 1945 respectively. The cities of Leverkusen and Wolfsburg are both inextricably linked to those corporations, which have historically provided the majority of employment.
In 2015, a third exemption was granted to Dietmar Hopp, the founder and owner of software company SAP, who helped propel his former team TSG 1899 Hoffenheim from the local village leagues to the Bundesliga between 1990 and 2008. Despite the exemption being entirely legitimate within the framework of 50+1, Hopp and Hoffenheim remain deeply unpopular.
Unlike Wolfsburg, Leverkusen and Hoffenheim, RB Leipzig are not exempt from the 50+1 rule; they adhere to it, on paper at least.
Like many clubs, RB Leipzig’s professional football team is a separate company, the RasenBallsport Leipzig GmbH. The company is owned 99% by Red Bull and only 1% by club itself, the RasenBallsport Leipzig e.V. but the club does hold 100% of the voting rights.
Crucially, however, the club only has 17 voting members, all of whom are either employed by or closely connected to Red Bull. The average RB Leipzig fan cannot become a voting member. In this way, Red Bull and RB Leipzig have been able to circumvent the 50+1 rule, which now forms the basis of much of the antagonism towards the club.
The model has its advantages. Ralf Rangnick is considered the sporting brains behind the rise of both Hoffenheim and RB Leipzig, having been Coach and Sporting Director at both, and he admitted in 2016 that “the short decision-making processes at clubs like RB Leipzig or Hoffenheim suit me.”
When building a club effectively from scratch and assembling a team which should play in a certain way, traditional elements such as annual general meetings and elected club boards only get in the way. It’s little surprise that Julian Nagelsmann – the former Hoffenheim and current RB Leipzig coach – has followed in Rangnick’s footsteps.
“I am a young manager and it appealed to me to work at a club where the structure is clear, where there are not 20 guys all with an opinion that takes you in different directions,” he told the Independent ahead of RB’s Champions League meeting with Tottenham. “Here, I can decide, and things happen quickly because the vision is the same across the club.”
Challenges to the 50+1 Rule in Hannover and Munich
Proponents of 50+1 believe that the ruling is essential to maintaining the relative supporter-friendliness of German football – affordable tickets, standing terraces, spectacular atmospheres and community engagement, all of which could conceivably come under threat were a club to belong exclusively to one external owner whose primary interest as an investor is profit.
Opponents, on the other hand, argue that the ruling discourages investment in German clubs, which in turn puts them at a financial and sporting disadvantage. After all, why should anybody invest money in an organisation they don’t control?
That’s the view of Martin Kind, the 75-year-old former President of second-division side Hannover 96. Kind, a businessman who made his fortune in the manufacturer of hearing aids, became president of Hannover in September 1997, and applied for an exemption to the 50+1 rule in August 2017.
But in February 2018, Kind withdrew his application following resistance from anti-takeover campaign group ProVerein1896, who were able to prove to the DFL that Kind’s financial support over 20 years had been neither substantial enough nor continuous (Kind had briefly stepped down as club president for a period in 2005).
Kind reactivated his takeover bid in May 2018 but it was rejected, leading him to initiate legal proceedings against the DFL, referring his case to the Federal Cartel Office (Bundeskartellamt), Germany’s national competition regulator, in the belief that the 50+1 rule constitutes a breach of free market competition laws.
In the same corner as Kind is Hasan Ismaik, the Jordanian billionaire who purchased a 60% stake in TSV 1860 Munich in 2011 – albeit only with 49% of the voting rights so as not to infringe the 50+1 rule.
In 2017, 1860 were relegated from the second division. In exchange for the €11m required for a third division license, Ismaik made demands for greater control, demands which the club “could not meet for legal and organisational reasons.” In other words, because they would have contravened 50+1.
Die Löwen (The Lions) were automatically relegated again and had to rebegin life in the regional fourth tier. While the team has climbed back up to the third division, Ismaik has joined Kind in submitting a complaint to the Federal Cartel Office – thus far without success.
“50+1 is an outdated instrument,” he told Munich’s Abendzeitung newspaper last summer. “The Bundesliga doesn’t have the revenue sources to keep up with England and Spain. We’re losing time!”
Ismaik and Kind have repeatedly threatened to take their cases to the European Court of Justice in the belief that the 50+1 rule contravenes EU law on monopolies and free trade. Legal experts are not so convinced.
“The highly controversial ruling would most likely stand up to European standards,” concludes one study at the University of Trier. “Ismaik’s case would have little chance of success.”
The Future of 50+1
In March 2018, the 36 Bundesliga and Bundesliga 2 clubs voted to retain the rule after the ‘50+1 stays!’ campaign handed over a petition to the DFL signed by over 3,000 fan groups from across Germany – but the rule faces an uncertain future.
Former Bayern Munich president Uli Hoeneß is not alone in his belief that clubs should be able to “decide for themselves” whether they open up to external investment, while Eintracht Frankfurt Sporting Director Fredi Bobic has warned of “monotony” in the Bundesliga if the “opportunities to generate income aren’t changed.”
Understandably, it’s the last thing fans want to be discussing when they’d rather be soaking up the fan culture and having a pint at a Bundesliga game.
Even Frankfurt chairman Axel Hellmann, an advocate of 50+1, has suggested reforms whereby investors would have to legally commit to a club’s location, its crest and colours, and socially inclusive ticketing. What’s more, the original club, the “e. V.”, should be guaranteed a say in any further selling of shares to third parties.
The debate is complex and intricate. Understandably, it’s the last thing fans want to be discussing when they’d rather be soaking up the fan culture and having a pint at a Bundesliga game.
But those atmospheres, choreographies and communities can only exist when fans play a genuine role in their clubs. Whether by way of 50+1 or a comparable model, when they’re active members and supporters rather than passive customers.