The impact of company-run clubs in German football

Watching the Bundesliga relegation playoffs the other day between Hoffenheim and Kaiserslautern, one could not but realise the huge difference between both clubs. And I’m not talking about the difference in quality, but rather the difference in the grandeur of each club. Admittedly perhaps, Hoffenheim is one of the worst examples to give in this scenario but after seeing the atmosphere at the Wirsol Rhein-Neckar-Arena in the first leg and the atmosphere at the Fritz-Walter-Stadion in the second, it became quite apparent that there is an abyss between what both clubs can bring to the Bundesliga. And it’s not just Hoffenheim.

However, it’s best to start at the beginning.

Everyone who knows anything about German football will be aware of the 50+1 rule. For those of you who don’t, it basically boils down to the fact that no single individual can own more than 49% of a club, as the club must remain in the hands of its members and supporters, as it’s romantically conceived. However, the DFB inserted a loophole in this rule as Bayer Leverkusen are owned by the pharmaceutical company Bayer and always have been, being founded as a gymnastics club by the company’s workers, with even the name of the city coming from the founder of Bayer, Carl Leverkus, whose dye factory was taken over by Bayer (the city was previously known as Wiesdorf). This law was called ‘Lex Bayer’ or ‘Lex Leverkusen’ (depending on where you read it) and it stated that it was acceptable if a company owned a club as long as it had been doing so for longer than 20 years before January 1st 1999. However, this law also applied in turn to VfL Wolfsburg, who are owned by Volkswagen; the city of Wolfsburg was founded just before the Second World War to house all the factory employers who were building one of the company’s models.

With the arrival of Hoffenheim to the Bundesliga, a team owned and bankrolled by SAP founder Dietmar Hopp, it was three teams in the Bundesliga that had found their way around the 50+1 rule. Hopp had taken his boyhood club from the Verbandsliga to the Bundesliga in just eight years, achieving four promotions in the process and having financial power that was impossible to compete with in the eyes of their rivals. The difference between Hoffenheim and Leverkusen and Wolfsburg is that TSG 1899 Hoffenheim had no tradition and no considerable fan base, and criticisms began to arise, not least inspired by the fact that Hoffenheim itself has only just over 3000 inhabitants and yet the club averaged a crowd over 26,000 in their first Bundesliga season. In the eyes of those who considered themselves ‘true’ Bundesliga supporters, this was a bit of a slap in the face, a stranger in the league and an unwanted one at that.

The other side of the coin are clubs, big clubs, that have fallen on harsh footballing or financial times and that find themselves in the second or even in the third division, as has been the case of Karlsruher SC, even though they’ve come straight back up again after a season in the 3.Liga. Another example is the aforementioned Kaiserslautern, who have been yo-yoing between the Bundesliga and the 2.Bundesliga for some time now. However, the atmosphere at FCK against Hoffenheim was undeniably incredible, exemplifying that the support remains no matter in what league the team plays in, obviously taking into account that this was a special occasion.

[youtube=http://www.youtube.com/watch?v=ITJz7Lc6tXU]

It was a stark contrast between the relatively tame atmosphere that reigned at Hoffenheim’s stadium under a week prior, a stadium that, strangely enough for Germany, had visible empty seats in the stands, whereas at Kaiserslautern, you couldn’t fit another pin needle, not to mention the incredible atmosphere created by fans as we can see in the video. If we asked someone who had no idea about German football, which club was in the first division and which wasn’t, the answer would be quite obvious. So the question arises: which is a better ‘advert’ or example for the Bundesliga? What exemplifies best everything that German football stands for?

Atmosphere and fanbase

Last season, I attended Bayer Leverkusen against FC Barcelona in the Champions League at the BayArena. I was surprised at the small size of the stadium and the poor atmosphere, despite Bayer equalising the match at one point against all odds. After leaving the match, speaking to two guys on the train trip back to Cologne I asked them about Leverkusen fans, to which they simply replied “what do you expect from the worst fans in the league?”. Whereas I’m not sure how serious he was, as I did ask about Hoffenheim fans to which he replied “please do not see this as an example of German football. Come to Dortmund (his team) and you will see what it’s all about”. Back home, I decided to check the attendance figures for the Bundesliga in the 11/12 season, to which I found that Leverkusen, Wolfsburg and Hoffenheim were in the bottom four in terms of average attendance and , only ‘beaten’ in negative numbers by Freiburg. The stadiums of these three aforementioned teams were of exactly or just over 30,000 fans, numbers that were beaten even by teams in the 2.Bundesliga. In contrast, 11 teams overcame the 40,000 average spectators mark this season as did two in the 2.Bundesliga (Hertha Berlin and 1.FC Köln). As mentioned before, it is commonplace to see empty seats in the ‘Bundesliga Company 3’ stadiums, with Hoffenheim averaging just 87% of the gate, 89% for Wolfsburg and 93% for Leverkusen. Perhaps the last figure might not seem bad but we are talking about Germany’s third team here, a figure that only 6 other teams (or 8 if we include Hoffenheim and Wolfsburg) in the league have been below and who, with exception of Mainz, have still managed to average 40,000 or more in average. There is no doubt that the atmosphere at these places is below the Bundesliga par and that the sight of empty seats, is also an uncommon sight for what many consider the strongest league in terms of support in Europe.

2013-05-31_attendances_2012

Bundesliga attendances 2012/2013 (courtesy of soccerway.com)

Transfers

Another important matter regarding these teams, is how they access funds for their transfers and wages. Whereas most teams rely on their profits to be able to fund their purchases and afford their wages, funds seem unlimited for company-run teams, especially Wolfsburg and Hoffenheim.

In the last ten seasons, Wolfsburg have amassed a loss of over 135m€, only making a profit in two out of those ten seasons, both by narrow margins (4m€ and 3.3m€), mainly thanks to the big sales of Edin Džeko (37m€) and Martin Petrov (10m€) respectively.

Hoffenheim’s numbers appear a bit healthier, having just made a loss of 10m€ since being in the Bundesliga. However, to balance their books after their top-flight incursion, they have had to sell a few of their star players which effectively caused manager Ralf Rangnick, the man who took them from the Regionalliga to the Bundesliga, to resign. The sales of Carlos Eduardo (20m€), Luiz Gustavo (17m€), Vedad Ibišević (4.5m€) and Gylfi Sigurðsson (10m€), all within the space of three seasons, have proved that Hoffenheim’s financial model is unsustainable.

Bayer Leverkusen have held a more moderate approach but they too have also had to sell some of their star players in order to stick to the Bundesliga financial guidelines and not fall heavily into the red. The sales of Zé Elias (5.6m€ in 1998), Émerson (20m€, 2001), Robert Kovač (8.25m€, 2002), Zé Roberto (12m€, 2003), Lúcio (12m€, 2005), Dimitar Berbatov (15.7m€, 2007), Patrick Helmes (5m€, 2011), Arturo Vidal (12.5m€, 2012) and the impending transfer of André Schürrle to Chelsea for 23.25m€ all exemplify how Leverkusen’s income just cannot compete in order to stay at the top of the league and despite being a more-or-less regular top 3 Bundesliga team and having reached Champions League football regularly, they still have to sell their best players for financial reasons.

All of this points to the fact that teams run by companies have financial capacities beyond their means, that without the support of these companies behind them, they wouldn’t be able to enjoy the status they have today. Would Leverkusen have reached a Champions League final without Bayer’s support? Would Wolfsburg have won a Bundesliga without VW’s help? Would Hoffenheim have reached the Bundesliga without Hopp? It’s quite a resounding NO in all cases and one which ridicules the 50+1 rule, a rule that was bent for Bayer Leverkusen but that has also helped other clubs in the process.

Lower leagues

This is not just the case in the Bundesliga but also in the leagues below. The most famous case in recent years is RB Leipzig, owned by the energy drink giant Red Bull. Ironically , RB stands for RasenBall and Red Bull acquired the license of Oberliga team SSV Markranstädt in 2009 to give birth to their new club. RB Leipzig was founded and they moved to the impressive 44,000 capacity Zentralstadion in Leipzig, now renamed Red Bull Arena, quite a step from the 5,500 Stadion am Bad that Markranstädt were used to playing in. Still, today, RB Leipzig average a crowd of just over 7,500 in a stadium that’s far too big for them. However, RB won the Regionalliga Nordost this season and look set for promotion to the 3.Liga, whereas city rivals Lokomotive finished in 10th place, with half the points RB had. Lokomotive’s attendance for the game against their city rivals would be worthy of second or even first-tier football at a push, a figure that would no doubt increase with the ascent in the leagues, and yet it will be a long time until they do reach such heights, whereas RB’s owners are hoping to get into the Bundesliga within the next four to six years. Why not just invest in Lokomotive?
rbarena

A contrast between RB Leipzig games…

SOCCER - Lok Leipzig vs RB Leipzig

… and  derbies against Lokomotive

There is another lesser-known case in the 2.Bundesliga with FC Ingolstadt 04, who are all but run by Audi. Their stadium, the Audi-Sportpark, averaged 7,331 spectators this season, third lowest in the league, but the team finished a respectable enough 13th place. The 04 stands not for being founded in 1904 but 2004, as Ingolstadt are the result of a fusion between MSV 1881 Ingolstadt and ESV Ingolstadt, and they rose from the Bayernliga (4th tier) in 2004 to the 2.Bundesliga in just four years. A relegation to the newly-founded 3.Liga was quickly solved with coming straight back up a year later. Ingolstadt survive thanks to a 5m€ shirt sponsor by Audi, the highest in the league, and over half the members of their board of directors are also directors at Audi. Again, another case of a club living beyond its means.

The future

What does this mean for the future? Hannover 96’s president Martin Kind tried to bring down the 50+1 rule, instead changing his mind halfway through the process and wanting the deletion of the rule of the ’20 years before January 1st 1999′. In his eyes, he sees the funding of Leverkusen, Wolfsburg and Hoffenheim as unfair as it’s massive handicap for other teams who would like to or could do the same; in other words, what he wants to do and can’t at Hannover. On one hand he has a point regarding fairness but on the other, what he is attempting to achieve could be the downfall for what German football has prided itself on for a long time, the famous 50+1 rule and financial fair-play.

Another strong opposer to the 50+1 rule is, naturally, RB Leipzig. Also violating the clause that no team name or badge should advertise for another company, RB is working towards a change in the rule before it reaches the top levels of German football. The emergence of teams like RB Leipzig and Hoffenheim have arisen fears that they could become examples for other teams and companies. 49% of 1860 München is owned by Jordanian businessman Hasan Ismaik, another man against the 50+1 rule and who constantly calls for the resignation of current 1860 chairman Dieter Schneider in order to be the main man at the club. More power = more money, where the point behind footballing success is not for club prestige but to make more money.

All in all, these are just some examples of how the 50+1 rule is avoided by some clubs in Germany; some thanks to a rule meant for one team and others due to their lower league status. In all cases, it is quite obvious that these company-run clubs do not have their own means to support themselves or maintain their current financial situation and that they can only do so by relying on the funds from their companies, an unfair advantage over other Bundesliga teams and also depriving other teams to have a deserved status in that league. Not only are they doing so, but are somewhat avoiding the 50+1 rule and the DFB cannot do anything about it. This may encourage other companies and clubs to follow way and find these legal loopholes that will allow them to climb the leagues thanks to external financial support. If this trend is to continue and succeed, like it has, relatively speaking, with most of the aforementioned clubs, it could become a problem for the DFB, who might not just have Martin Kind running solo in its favour but also other more influential clubs and people. For us fans, the difference that it will make is that we will have to endure another season of empty seats and poor atmosphere at the Wirsol Rhein-Neckar-Arena when we could be enjoying the excellent atmosphere at stadiums like the Fritz-Walter-Stadion or the RheinEnergieStadion.

Header courtesy of 11Freunde.com

Photos courtesy of werder.de and hitradio-rtl.de

The following two tabs change content below.

Aleix Gwilliam

Is a 27-year-old living in Barcelona who gets more pleasure from watching German lower-league football than from going to watch his hometown team at the Camp Nou every other week. Passionate about European football, its history and culture, you can follow him on Twitter at @AleixGwilliam

Latest posts by Aleix Gwilliam (see all)

Be the first to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.