50+1 RULE IN GERMAN FOOTBALL: WHO OWNS FOOTBALL? - DLA Piper
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50+1 RULE IN GERMAN FOOTBALL:
WHO OWNS FOOTBALL?
March 2018
BUNDESLIGA CLUBS CONFIRMED 50+1 RULE – BUT
LIBERALISATION PLANS FOR INVESTORS ARE NOT OFF THE TABLE
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. There are powerful voices within the DFL questioning
50+1 and warning against the legal weakness of the rule and potential court procedures in the future.
50+1 RULE CONFIRMED BUT PROCESSES On the one hand, this result shows that the
TO IMPROVE LEGAL CERTAINTY AND maintenance and concrete design of the 50+1
FURTHER REFLECTION ON CHANGING Rule is not only the subject of highly
THE FRAMEWORK CONDITIONS HAVE controversial discussions in the fan scene and the
STARTED public, but also that the clubs themselves have
different views on opening up to investors. The
At the DFL meeting, 18 of 34 attending clubs Rule has long been much more than a sober
somewhat surprising voted in favour of the paragraph, it is an emotional and sometimes
motion tabled by second-league club FC St. Pauli overused symbol in the debate about the future
(for years it has been one of the biggest of the football business and the question "who
supporters of the 50+1 Rule) to declare its owns football?".
support for a "process to improve legal certainty
and further reflection on changing framework On the other hand, the clubs are well aware that
conditions while generally retaining the 50+1 the controversial regulation has preserved the
Rule". There were also nine abstentions and four identity and independence of German football to
clubs voted against the request of the second- date, but that it is nevertheless ultimately based
league club. Three other clubs present and on a fragile (European) legal construct. In
entitled to vote did not participate in the vote at addition, many clubs have recognised that
all. German football cannot permanently close itself
off from investors if they want to keep pace with factor for investors in terms of financial support.
the current financial and sporting developments However, it must also be taken in account that
in Europe. the Bundesliga is a strong football league and has
teams with international success and an
The current resolution therefore also reflects
extensive presence all over the world.
this initial situation. Although the majority of
clubs are in favour of continuing to apply the The recent DFL Report 2018 proves that
rule, it has also been made clear that the medium German football is firing on all cylinders: overall
and long-term structure is open and will be revenue exceeded €4bn the first time - the 13th
discussed intensively in the future. In this respect, consecutive year of record revenue. More than
the decision can certainly be regarded as a 19m spectators in the stands in the stadiums of
progress. A permanent perpetuation of the Bundesliga and 2. Bundesliga, utilisation of 91% in
current status has therefore not taken place. the Bundesliga means it is the best attended
league in the world.
This status remains the same as before the DFL
decision to generally maintain the 50+1 Rule.
Football clubs and their shares are consequently
still an attractive target.
A VIEW TO THE FUTURE
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
GERMAN FOOTBALL STILL ATTRACTIVE
therefore are not off the table. Quite the
FOR INVESTORS AS CURRENT SYSTEM
contrary, it seems to be clear that material
ALREADY ALLOWS SUBSTANTIAL
changes will be discussed but 50+1 in some way
INVESTMENT will remain the framework.
Despite the decision of the DFL to maintain the This is particularly relevant because there are
50+1 Rule, it is still possible for private investors powerful voices within the DFL warning against
to financially support or invest in professional the legal weakness of the rule and potential
clubs, because the rule does not generally forbid threatening court procedures in the future. Even
the majority of the capital of a club being held by after the 22nd March ruling, there is no legal
investors. Several clubs have already used this certainty, as DFL e.V. board member and DFL
possibility. In addition, investors may hold a GmbH CEO Christian Seifert and DFL e.V.
majority stake in an association if they have president Reinhard Rauball emphasised. That
continuously and substantially supported it for means: If a club decides to take legal action, 50+1
more than 20 years. Notwithstanding the 50+1 would suddenly be in the balance again. "We
Rule, the degree of commercialisation in the must have greater legal certainty", Seifert
German football business is amazing, regardless admitted.
of how the ownership of a professional club is The DFL has already announced that it will
structurally organised. structure further proceedings internally and
The preservation of the majority of votes or inform clubs and the public about the next steps
decision-making power is of course a decisive in good time. Furthermore, it remains to be seen
DLA Piper UK LLP is part of DLA Piper, a global law firm operating through various separate and distinct legal entities. For further information please
refer to www.dlapiper.com.
Copyright © 2018 DLA Piper. All rights reserved.
whether there will be a legal test case against the However, the current development and
50+1 Rule, even though it is fairly clear that such discussions have shown that any changes in 50+1
a court proceeding will take time until a final and a broader investment of private investors in
clarification can be reached – maybe also German football needs to be considered
involving European Courts. alongside fans and club members' sensitivities, as
they have unmistakably made clear their
BEING IN POLE POSITION continued significant influence. There will be no
fruitful partnership without having fans and club
For current and potential investors in German
members on board.
football it is crucial to follow DFL´s next steps
and the process of reform. Furthermore, there Therefore, not only economic interests have to
are already broad opportunities to invest in be considered but also political and social
German football under the current legal acceptance in German football society. For
framework and stakeholders that have already successful investments in German football a
invested will be in pole position when the new broad market knowledge is crucial.
50+1 Rules allow broader involvement in clubs'
decisions and futures.
IN CASE YOU HAVE ANY QUESTIONS REGARDING THIS TOPIC, PLEASE DO NOT HESITATE TO
CONTACT ME.
Guido Kleve
Partner | Litigation & Regulatory, Sports Law
T +49 221 277 277 351
guido.kleve@dlapiper.com
DLA Piper UK LLP is part of DLA Piper, a global law firm operating through various separate and distinct legal entities. For further information please
refer to www.dlapiper.com.
Copyright © 2018 DLA Piper. All rights reserved.
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