Germans Say No to Takeovers in Football

GuidoAnalyst INovember 10, 2009

MANCHESTER, ENGLAND-AUGUST 9 : (L to R) Joel Glazer, Avram Glazer and Bryan Glazer, sons of owner Malcolm Glazer, are seen before the Champions League third qualifying round, first leg match between Manchester United and Debreceni VSC at Old Trafford on August 9, 2005 in Manchester, England.  (Photo by Clive Brunskill/Getty Images)
Clive Brunskill/Getty Images

In business, a takeover is the purchase of one company (the target) by another (the acquirer, or bidder). Over the past few years, we've seen a few of these takeovers in football. Malcolm Glazer and Manchester United spring to mind, as do Roman Abramovich and Chelsea and Liverpool's American owners, George Gillett and Tom Hicks.

I'll not pass judgement on how these deals have turned out for the involved clubs, but instead, I will refer to Germany and the professional football in this country. You see, the Germans have come up with a rule to prevent takeovers in football.

In Germany, people believe the clubs should not be owned by one man or one company, to prevent the commercialization of the club and potential loss of the club’s identity. Regarding the commercialization of a club, just look at Manchester United, where ticket prizes have gone up by over 42 percent (12.3 percent, then 14 percent, then 11 percent [1]) since 2005.

Either way, in an effort to protect their clubs from takeover, the Germans have come up with the so-called “50+1” rule. This rule implies that one person can only hold shares by the size of 49 percent of a club. Because of this, a prospect club owner has no majority vote and cannot conduct the club operations, which tends to scare potential German Glazers or Abramovic’ off since the club board can always overrule them.

Hannover 96 boss Martin Kind recently proposed the abolition of the 50+1 rule, so that German clubs could bring in bigger sponsors and be able to compete internationally against English, Italian, and Spanish clubs, who can all bring in more money.

According to Kind and his followers, German clubs are not able to rival the financial power of other European clubs, most notably the English and Spanish ones. German clubs are unable to attract stars like Kaka or Cristiano Ronaldo and they are unable to compete with clubs from Spain and England in the Champions League because of this.

This proposal by Kind to abolish the 50+1 rule and effectively pave the way for private owners to take over a football club was vetoed by the German clubs themselves, with only two clubs voting in favor of the proposal. A successful abolition would have needed a two-third majority at the conventions of the DFL (Bundesliga) and the DFB (The German Football Association).

I’m curious to see what the future brings for German football. After all, ticket prizes are lower compared to England and percentage-wise, attendances are higher. On the other hand, the English clubs have the financial muscle to buy their way to success, which they have done over the past decade.

I wonder if the German approach to football will one day triumph over the more capitalistic English approach. I sure hope it does...

[1] -