German fan ownership model the way forward for Scottish football
Ross Dunbar looks at how clubs in Germany are controlled and how the model could end the norm of single-ownership.
The future of Rangers Football Club could potentially be a watershed moment for Scottish football and the prospect of a supporter-owned club may be the catalyst for similar changes to the ownership structure within the game.
Craig Whyte’s disastrous governance over Rangers has brought to the fore the serious issues of the single-person ownership model of a football club which is still very prominent in the United Kingdom.
A number of high-profile ex-players of the club have come out in support of potential fan ownership and the Rangers Supporters Trust, whose sole aim is to facilitate fan representation on the board, have been in early discussions with the likes of former director Paul Murray over a potential supporter ownership model.
Germany has led the way in supporter ownership of clubs and its model is widely-envied across European football. The astute management of clubs and the fan-orientated nature of German football has propelled the Bundesliga to become one of the best leagues in Europe over the last few seasons.
Supporter Liasion Consultant for Supporters Direct Stuart Dykes explains: “Clubs must submit their accounts by the middle of March for the following season to show they will be able to financially compete in the league.
“The League financial experts and if they feel there’s something there that’s not realistic then they have the power to force clubs to alter their spending accordingly.
“They have now also introduced in-season checks and comparing their submitted accounts with what they spent during the season.”
The Deutsche-Fussball-Liga (DFL) impose strict regulations on the 36 Bundesliga clubs every season with the governing body insisting that “all clubs of the Bundesliga and 2. Bundesliga have to meet the criteria in the ‘Lizenzierungsordnung’ and its respective appendixes.
“These are sporting, legal, administrative, infrastructural, and financial (economical efficiency) criteria as well as criteria concerning security and media.”
The written constitution of the Bundesliga has certainly been enforced when necessary and not just used as a deterrent to clubs who insist on racking up large debts.
Two years after the inception of the German Bundesliga in 1963, the league governing body revoked the license of Hertha Berlin for financial irregularities and in just 2010, there were serious doubts over the financial stability over 1860 Munich, Unterhachingen and Arminia Bielefeld.
In the 1990s, Dynamo Dresden, Fortuna Dusseldorf, Rot-Weiss Essen and SV Waldhof Mannheim were just some of the clubs who were demoted to the lower leagues by the DFB for a variety of different reasons – mainly, not being able to meet the forecasted predictions in their submitted accounts.
The ‘50+1’ rule
There are just two exceptions to the “50+1” rule in the Bundesliga at the moment – VfL Wolfsburg and Bayer Leverkusen. Both clubs are fully-owned by Volkswagen and pharmaceutical company Bayer AG respectively but have developed strong roots in their working class areas.
Despite tycoon Dietmar Hopp owning 96% of the club’s shares, TSG Hoffenheim still follow the “50+1” rule because Hopp only has 49% of the voting rights which means they still meet the Bundesliga requirements.
Dykes added: “Supporter Ownership doesn’t protect you against bad management. Felix Magath encountered some problems at Schalke 04 because we are a members association and the constitution says the club can’t sign a player for over £300,000 without the approval of the supervisory board.
“We have the dual management structure at the club with the management board running the day-to-day business and is supervised an 11-person supervisory board which includes a supporter representative and that is anchored on the club’s constitution.
“Magath was hampered in his ambitions by not being able to sign a player for £300,000 without permission from the supervisory board. He wanted that clause deleted from the constitution and at the meeting, the members voted against that.
“This shows the advantage of the power of a members association. You only have to imagine how worse his spending could have been if there wasn’t the usual checks and balance from the supervisory board.”
The aforementioned example from Schalke – a club with over 120,000 paid members – shows where Rangers possibly went wrong during the reckless era of Sir David Murray.
Millions were spent on players throughout the season and immense debts were racked up in the hope of dominating the domestic and European game.
The events of last week have brought a stark warning to British clubs who are still run by one majority shareholder/investor that gross mismanagement will eventually come back to haunt you in future years.
For the good of Scottish football, the problems at Ibrox should make the three main governing bodies implement similar strict regulations, licensing and open up the potential of fan ownership in Scotland.