Archive for the ‘Bundesliga’ Category

As expected, the Bundesliga ownership model is being touted ahead of the all-German European Cup final this Saturday. This isn’t a bad thing of course; the 50+1 fan ownership rule ostensibly promotes a saner, community-based approach to football finance, and despite the skepticism of soccer economists like Stefan Szymanksi, the lower wage-to-turnover rates and availability of lower ticket price ranges isn’t a bad thing (although as Swiss Ramble pointed out a while ago, the figures have been exaggerated a bit).

This doesn’t make the Bundesliga a footballing utopia. Szymanski has raised the point before that league-enforced spending rules sometimes ossify club hierarchies, which means a lot of the same few teams winning all the time. Although that’s hardly different than what fans have witness in the Premier League in the past two decades, so the point may be moot.

Here’s David Conn on the German model and its relative financial responsibility:

Bayern, without doubt one of Europe’s mighty with €202m commercial income including booming corporate sponsorships, stormed their way to Wembley with a wage bill, a reported £140m in 2011-12, below that of Manchester City, United, Chelsea and Arsenal. Dortmund’s wage bill was £68m for Jürgen Klopp’s fine young squad, £134m less than City spent in 2011-12 and lower than seven Premier League clubs including Aston Villa. While Premier League clubs spent 67% of their huge income on wages, Seifert said the Bundesliga clubs spent only 38% of theirs on players’ wages, despite their lower income.

Which is interesting, although as cited in the earlier Counter Attack post above, that 38% figure may be misleading. In any case, Conn as others before him has done the work of touting the Bundesliga’s apparent financial superiority, and sort of left it there. And of course, this isn’t without a touch of schadenfreude aimed at England’s money men:

RT ‏@theboyler thought of English football’s “ownership neutral” powers-that-be watching two fan-owned teams makes me smile a lot…

— David Conn (@david_conn) May 23, 2013

What goes unsaid in all of these articles however is just how exactly a similar model might work in England. What would be the best way to transition from the current free-market approach to Premier League ownership to a club member/stakeholder option? Who would have the best political authority to implement these kinds of changes? Would it be best to work through the Football Association? Or promote the supporters’ trusts? Should politicians be drawn into the conversation?

Further to that, are there elements from the Bundesliga model that could more successfully exported than others? Does the FA enjoy the kind of authority the DFB and DFA have in implementing top down policies on finance? Are there better financial incentives for companies to own up to and including a 49% stake in a football club but not the ‘whole enchilada’ as it were? If not, how can fans challenge owners in conceding a legally-enforced stake in the teams?

“Why don’t you write that article, you asshole?”, you might be thinking. Well maybe I will one day. But the point here is that both the Football Supporters Federation and the Supporters Trust movement might begin to sit down and start a public conversation that involves these basic questions of strategy, and those interested voices in the media might start exploring these questions seriously.

Simply holding up some figures to the establishment and shouting, “See!” to random passers-by isn’t going to get us much beyond the “Gee wouldn’t that be great?” stage.

Stefan Szymanksi, the noted co-author along with Simon Kuper of Soccernomics, wrote a Tweet this morning in response to an op-ed in support of the Bundesliga in the Independent today:

So anyone who is a skeptic about the German football model must be a “cheerleader” for the Premier League?independent.co.uk/sport/football… #TINA

— Stefan Szymanski (@sszy) May 1, 2013

Szymanksi for his part wrote a small critique of the Bundesliga, particularly addressing the notion that the league’s ticket prices are substantially more affordable (I’d show it to you but Szymanksi’s site looks a bit borked at the moment; here’s the cached version). Kieron O’Connor, author of the incredible Swiss Ramble blog which has recently rumbled back to life, added this important correction to the Indy piece as well, which cited a wage to turnover rate in the Bundesliga as 37.5%:

@rwhittall @sszy I calculate 48% – after deducting transfer revenue and adding wages for commercial/admin staff.

— Swiss Ramble (@SwissRamble) May 1, 2013

This kind of skepticism is very important, particularly with the rash of pro-German model op-eds that will inevitably precede the likely all-German final at Wembley Stadium. The venue will also provoke comparisons to the laissex-faire Premier League, and it would be easy (and I’ve done it too in the past) to attempt to use the one to bash the other.

Even so, it would be overly stubborn not to point out the benefits of the Bundesliga model, in which all but two teams have a 50+1 fan shareholder rule and all clubs are under a break-even licensing agreement. The Bundesliga model shouldn’t be grafted on other domestic league wholesale, but there is evidence that it provides club stability, reasonable profitability for private, minority investors, and competitive relevance in Europe.

The problem is football is a really bad marriage between sport and business. What works in the free market doesn’t usually graft on well to clubs locked in a promotion/relegation league system over a century old now. There is confusion over the purpose of a club-slash-business—is it to turn a profit for owners and investors, or to win trophies for fans? These two goals aren’t always mutually exclusive, but often the one comes at the expense of the other.

The Bundesliga model seems to have carefully addressed this precarious balancing act by letting private capital in the door to enjoy the rewards but not to steer the ship. It’s not perfect. I don’t know for certain but I suspect that Szymanksi would point out that the break-even requirement is one of the main reasons why Bayern Munich’s continued domestic dominance is assured for years to come (it’s not particularly good that the club bailed out Dortmund a mere decade ago when it faced bankruptcy). Bayern’s national popularity and rich history give it a built in advantage in revenues, an advantage nearly impossible for other Bundesliga clubs—who cannot spend wildly in excess of turnover on players—to circumvent.

Except this financial disadvantage is to some degree mitigated by an excellent academy system revamped following the disastrous 2000 Euros that in part built the Dortmund side that is in the Champions League final and which beat Bayern in the league last year. Yes, the club is set to lose one its premiere players in Mario Goetze to the league champions, but the mere fact that Stuttgart, Dortmund and Wolfsburg have all finished first in recent years indicates that money, whilst vital, is not an absolute guarantee of permanent success.

So beware the lure of the “England should adopt the German approach wholesale” argument. But don’t let your inner skeptic dismiss it out of hand, either.