For decades investors have been interested in German football. However, on 22 March 2018 the German Football League (“DFL”) voted in favour of generally retaining the 50+1 Rule. This rule, which is unique throughout Europe, was established in 1998 and in short means that investors cannot take over clubs as the clubs shall hold a majority of their own voting rights. German clubs are generally controlled by associations made-up of fee paying members, rather than investors. The 50+1 Rule ensures that the association members – and, by extension, the fans – retain overall control and investors cannot potentially push through measures prioritising profit or personal interests over the wishes of the association. The majority of the 36 clubs in Bundesliga and 2. Bundesliga have now generally voted to retain this principle, however plans for liberalisation are not off the table.
At the DFL meeting, 18 of 34 attending clubs somewhat surprising voted in favour to declare its support for a “process to improve legal certainty and further reflection on changing framework conditions while generally retaining the 50+1 Rule“. There were also nine abstentions and four clubs voted against the request of the second-league club. Three other clubs present and entitled to vote did not participate in the vote at all. On the one hand, this result shows that the maintenance and concrete design of the 50+1 Rule is not only the subject of highly controversial discussions in the fan scene and the public, but also that the clubs themselves have different views on opening up to investors. The Rule has long been much more than a sober paragraph, it is an emotional and sometimes overused symbol in the debate about the future of the football business and the question “who owns football?”. On the other hand, the clubs are well aware that the controversial regulation has preserved the identity and independence of German football to date, but that it is nevertheless ultimately based on a fragile (European) legal construct. In addition, many clubs have recognised that German football cannot permanently close itself off from investors if they want to keep pace with the current financial and sporting developments in Europe. The current resolution therefore also reflects this initial situation. Although the majority of clubs are in favour of continuing to apply the rule, it has also been made clear that the medium and long-term structure is open and will be discussed intensively in the future. In this respect, the decision can certainly be regarded as a progress. A permanent perpetuation of the current status has therefore not taken place.
The now solidified position of the clubs initially results in a strengthening of the 50+1 Rule but it also creates a remarkable loophole. It is still to be considered how the DFL will deal with the concrete application and procedures of the 50+1 Rule in the future. Plans for liberalisation therefore are not off the table. Quite the contrary, it seems to be clear that material changes will be discussed but 50+1 in some way will remain the framework. This is particularly relevant because there are powerful voices within the DFL warning against the legal weakness of the rule and potential threatening court procedures in the future. Even after the 22nd March ruling, there is no legal certainty. If a club decides to take legal action, 50+1 would suddenly be in the balance again.
For current and potential investors in German football it is crucial to follow DFL´s next steps and the process of reform. Furthermore, there are already broad opportunities to invest in German football under the current legal framework and stakeholders that have already invested will be in pole position when the new 50+1 Rules allow broader involvement in clubs’ decisions and futures. However, the current development and discussions have shown that any changes in 50+1 and a broader investment of private investors in German football needs to be considered alongside fans and club members’ sensitivities, as they have unmistakably made clear their continued significant influence. There will be no fruitful partnership without having fans and club members on board. Therefore, not only economic interests have to be considered but also political and social acceptance in German football society. For successful investments in German football a broad market knowledge is crucial.