The Germans, to borrow a cliché, aren't so much known for being unpredictable. The country's soccer has never been confused for being high on octane, scoring and entertainment. But all bets are off in Europe's healthiest soccer league.
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While the English Premier League is seen as the gold standard, a scenario is unfolding in which the Bundesliga could surpass the EPL to become the world's most popular and successful soccer league. If that sounds like a stretch, consider that the Bundesliga is already the best-attended league and arguably the most exciting one, too.
German soccer is leading the way on another front as well. Most European soccer clubs are struggling with massive debt. The 20 English Premier League clubs have a combined debt that has spiraled to $4.45 billion. In La Liga, last year's 20 teams rang up $4.65 billion in debt. (For more on the European debt crisis in football, click here.) Contrast that with Germany, where the country's 36 pro teams are (wait for it) actually making money. Or at least not finding themselves under the weight of crushing debt.
"The Bundesliga is being held up as a model of financial virtue and good governance," said Simon Chadwick, a sports economist from the University of Coventry in England.
In Germany, you don't read stories about big-money buyouts and hostile takeovers by wealthy foreign investors. There's no talk of teams going bust. And there's a simple reason why.
Clubs aren't allowed to behave like irresponsible teenagers with their parents' credit cards at their disposal.
50+1=Smart Business
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Honoring the German federation's 50+1 rule, Bundesliga clubs all have the same majority owner -- their fans, who maintain control of 50 percent of shares plus one. There are a few exceptions, such as Wolfsburg, which is owned by Volkswagen, which, of course, is based in the same city as the team. Ditto Bayer Leverkusen, which is owned by Bayer pharmaceuticals. But in both cases, ownership is still community-based.
The 50+1 rule means that German soccer avoids the economic instability that comes from deep-pocketed entrepreneurs swooping in to purchase a club. Such arrangements go sour at least as often as they work out (see: Newcastle United, Portsmouth FC and Liverpool FC, to name just three).
"What you're not getting is entrepreneurs buying up clubs and amassing massive debt and then leaving the club behind in difficulty," said Chadwick.
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German soccer is guided by a 200-page rulebook with precise stipulations on liquidity and debt, among many other things. Perhaps the most important rule: Clubs must demonstrate that they expect to at least break even or they are denied a license to practice professional soccer. Imagine if EPL or La Liga teams were held to the same standard?
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Clubs that don't make good on their financial projections are fined and docked points. This happened to Arminia Bielefeld last year. The German soccer federation also reserves the right to order an additional audit by a third party if the numbers aren't adding up.
Overall, though, the numbers are encouraging. Of the 36 clubs across the Bundesliga and second-tier Bundesliga 2, just three are thought to be in the red. Schalke 04 is said to owe about 300 million euros, while Borussia Dortmund is in the hole by an estimated 70 million euros. Hertha BSC has some 60 million euros in debts.
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It's all about the fans
The Bundesliga's sound financial footing means that wealth is fairly evenly distributed. No one team can grossly outspend another. The net result: Relative parity rules the league. Although Bayern Munich has won the title five times in the past decade, four other teams have won it, too, and the domestic cup competition, the DFB-Pokal, has had 11 different finalists over that span.
"We need to stay entertaining," said Seifert. "We think that the more entertaining and unpredictable the competition is, the more it will excite the fans." While the merits of parity are debatable, its effects seem to encourage ticket sales in Germany. The Bundesliga has set attendance records for seven years in a row.
It's good to be a footy fan in Germany. Not only do you get competitive matches, you don't have to put a major dent in your wallet to support your favorite team. Because fans have a controlling ownership of their clubs, they can keep ticket prices affordable -- about $28 on average, roughly the same as an MLS ticket and less than half of admission to an EPL game.
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So it should come as no surprise that attendance in Germany is the highest in Europe. During the 2008-2009 season, an average of 41,900 spectators came to every Bundesliga game, outdrawing the English Premier League (35,600), the Spanish Primera Division (28,500), the Italian Serie A (25,300) and the French Ligue 1 (21,000).
And it's not the prawn sandwich brigade, either. Bundesliga matches are festive occasions for "real fans," as they say, drawn from a much larger socioeconomic demographic than other leagues.
Some dismiss the attendance boom as a result of Germany having hosted the World Cup in 2006. "It's almost always a major boost to the domestic league," said English sports economist Stefan Szymanski. "You primp up the stadiums and make them very attractive and you get people excited about football. But if [attendance] trails off after a few years you have to ask questions."
No one's asking those questions in Germany. By being fan-friendly and making soccer accessible, the Bundesliga has become the world's most profitable league. Although it doesn't yet gross more than the EPL, which took $3.14 billion in revenue in 2008-2009 to the Bundesliga's $2.18 billion, the Bundesliga's $225 million profit eclipsed the Premier League's $125 million.
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"If the Bundesliga were to remove the capital restraints that it imposes on the clubs and would allow investors to come in, it would become the dominant league in Europe," said Szymanski. "The reason it isn't the largest league, in spite of having the largest and wealthiest population that is fanatical about football, is that they are restrained by the rules they impose on themselves. There's definitely a penalty in limiting your financial opportunities in the way that they do."
Seifert doesn't buy into the theory. "If you eliminated the 50+1 rule, it would lead to an unfair competition because every year one or two clubs would come out ahead of the league," he said. "It would be great for the fans of those clubs but bad for the competition. It's more important to find investors to keep the league exciting and unpredictable."
But the Bundesliga CEO doesn't enjoy the support of all the clubs. In November 2009, Hanover president Martin Kind moved to abolish 50+1 or any other caveats to ownership. He argued that it would be the only way the league could keep up with the big-spending clubs in England, Spain and Italy. To his point, last season was the first time in eight years that a German club (Bayern Munich) reached the Champions League final. In that span, an English team had made it there six times, an Italian team four times and a Spanish team twice.
But while regaining a leading role in European competitions is attractive, maintaining a clean bill of financial health was even more appealing to the majority of German clubs. When Kind's motion was put to the vote, 32 of the 36 clubs rejected it.
The kid is only 21, if he is to turn around his career he has to get out of Europe, it is just not working.
interesting read.
someone was angle shooting. guess it was fergie.
