The 50+1 Rule: What it is, and why it is important that it stays

DORTMUND, GERMANY - JULY 06: CEO Hans-Joachim Watzke of Borussia Dortmund, coach Lucien Favre of Borussia Dortmund and Sporting director Michael Zorc of Borussia Dortmund during the press conference on July 6, 2018 in Dortmund, Germany. (Photo by TF-Images/Getty Images)
DORTMUND, GERMANY - JULY 06: CEO Hans-Joachim Watzke of Borussia Dortmund, coach Lucien Favre of Borussia Dortmund and Sporting director Michael Zorc of Borussia Dortmund during the press conference on July 6, 2018 in Dortmund, Germany. (Photo by TF-Images/Getty Images) /

There has been lot of debate about the 50+1 rule recently, with some fans questioning the need for it modern football. Here we take a look at why its important that the Bundesliga does not abolish the rule.

German football has a proud tradition of putting the fans first. According to Statista, the Bundesliga has boasted the highest average attendance in Europe since the 2004/05 season, and as of 2017/18 pulled 6.35 thousand more fans to each game than Premier League teams. Many of those involved in fan culture will put it down to ticket prices and match day experience; according to The Guardian, the Bundesliga has the lowest cost of attendance across all top five leagues.

However, German football has been exposed recently, starting with the national team’s exit from the 2018 World Cup, and hitting rock bottom with the exit of its two top teams–Borussia Dortmund and Bayern Munich– from the Champions League in the Round of 16. Their current state of affairs poses a stark juxtaposition with what it was just 7 years ago, when BVB and Bayern were contesting a Champions League final at Wembley, and Germany was on the verge of winning their fourth World Cup.

This fall from grace has sent Bundesliga fans searching for its source, and many of them have arrived at the “50+1 Rule”. This institution is a provision stating that a club must own 51% of its own stock in order to join the German league. A common misconception entails that the rule regulates financial management of clubs; really it only limits the profits which an individual investor or conglomerate can gain by limiting the shares they own, which has no impact on investment potential. As a result, many consider clubs operating under these rules a less attractive investment.

The notion popular amongst abolitionists is essentially limiting the amount of cash to be farmed from Bundesliga teams, discouraging financial takeovers and the subsequent signings required to be competitive. It hinders takeovers that have occurred at clubs such as Paris Saint-Germain and Manchester City, which have been purchased by Middle Eastern interests and converted from minnows into powerhouses.

Many point to the admittedly jarring fact that mid table teams in England, such as Everton and Newcastle, have higher transfer records than Borussia Dortmund, and until the recent signing of Lucas Hernandez, Bayern Munich. For reference, Bayern and Dortmund have both qualified for the Champions League every season (excluding the 14-15 season) for the last nine years, whereas Everton and Newcastle have not done so in decades.

Additionally, they view this rule as a potential route to empowering the smaller clubs in the league. Even if they are not propelled to Europe, billionaire investment gives traditionally weaker clubs the ability to hold on to their talented players when Bayern and Dortmund come calling. For example, at the end of the 16/17 season, Swansea City were able to hold on to Gylfi Sigurdsson until the month of August, when Everton finally met their demand of €50 million.

In a sharp contrast, Hoffenheim achieved Champions League football for the first time in 2017, but they lost both Niklas Sule and Sebastian Rudy to Bayern Munich immediately after their qualification. In short, a relegation contender in England received €50 million for their talisman, and a Champions League club in Germany can expect €23 million for one and a free transfer for the other.

That being said, the source of the Premier League clubs income is often misconstrued. According to the Financial Times’ Murad Ahmed, the Premier League received £4.5 billion in exchange for broadcasting rights between 2019 and 2022, and although it is the a £0.6 billion decrease from the previous deal, it is still the most lucrative deal in the sport. Notwithstanding, the same article iterates how Germany is soon to catch up, citing a 13 percent increase in profits in the last fiscal year.

In addition, those attacking this rule are aiming their frustrations at the wrong rule, the wrong people, the entirely wrong government body. While the 50+1 Rule is enforced in Germany, it doesn’t regulate the spending they think is necessary to be competitive; that prerogative belongs to UEFA’s Financial Fair Play regulations(FFP). FFP is a set of rules that basically outlines how much a club can spend, more specifically, a sporting organization’s expenditures must be similar to their profits.

This rule has hamstrung the billionaire owners of Chelsea, Manchester City, and PSG, all of which have been investigated for violation of FFP. PSG’s record transfer of Neymar and conspicuous loan deal for Mbappe required a fire sale of players and underhanded dealings to get them clear of financial regulation, and Manchester City were threatened with a Champions League ban after they were investigated for a vertiginous net spend of nearly £400 million in the past three years(Mirror).

Omitting these infractions and admitting their success, some fans in Germany still point to these clubs as examples of success; however, they are more hesitant to acknowledge more unstable tenures of individual owners such as those who took over the likes of Blackpool, Newcastle United, and Birmingham City. All of these clubs were bought by rich men who saw them as not much more than cash cows, and all of them fell from reasonable success to financial mismanagement, relegation, and some near administration.

Furthermore, other clubs like Arsenal have had reasonable success on the pitch, but their fans have suffered. The Kroenke takeover at the Emirates in 2011 has seen ticket prices rise to the highest in the Premier League, but a drop in results, attendance, and transfer budgets. Despite a Europa League finish in 2017/18, Kroenke only stumped up €50 million for the summer transfer window, which lead to a relatively uninspiring silly season for the Gooners.

Lastly, it is telling to examine who supports the repeal of this safeguard. Only 4 clubs voted to retain the rule; among them were RB Leipzig and Bayern Munich. They have much to gain from a change in rules, as there are outside investors either already involved in the club or waiting in the wings with dirty money. It would see massive investment in these clubs, the disparity between them and the rest of the league grow, and the fans suffer.

The 50+1 Rule is the spring from which all positive and unique facets of German football flow. For example, institutions such as the Premier League and Uefa have banned safe standing in stadiums, but in Germany fan power has kept it alive. It could cost more to attend a relegation dogfight in England than it would to watch a battle for European places in Germany.

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German fans are always lauded for high attendance rates and displays of passion for their club, but every time one of their teams under-perform, the very protections that allow them to be the best fans in the world fall under siege. The query of 50+1 is really a query of priorities: what is more important, the fans or the bottom line?