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Culture

Bundesliga Opens Under Clouds of Scandal

Germany's revered football league turns 40 this year. But tax corruption and a cash crunch is threatening to tarnish the league's polished reputation.

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Speak no evil, see no evil, hear no evil.

In its 40th anniversary season, the German football league kicks off on Friday with reigning champions Borussia Dortmund playing host to Hertha Berlin at Dortmund's Westfalen Stadium.

But in the midst of the frenzied anticipation across the country, the shadow of sleaze has settled on what is proudly upheld as Germany's showcase of football to the world.

Already struggling under a collapse in pay television revenues after the slide into bankruptcy by the KirchMedia empire, Germany's professional football league is watching nervously as prosecutors investigate suspected tax evasion involving payments by top Bundesliga club Bayer Leverkusen.

Investigators dig into Leverkusen's tax dealings

Jens Nowotny

Leverkusen's Jens Nowotny, right, begins the new season under a cloud.

According to the Süddeutsche Zeitung newspaper, prosecutors were tipped off in March that Bayer had paid player Jens Novotny and former coach Christoph Daum in cash or through complicated side deals in order to minimise their tax liabilities.

In Novotny's case, prosecutors are reportedly probing an allegation into the transfer fee paid by Bayer when the player moved to the club from Karlsruhe SC in 1996. It was officially listed at around 2 million euro ($1.98 million) but was in fact closer to 5 million euro ($4.9 million).

Investigators have discovered that some of the money was paid to Novotny through relatives who were in lower tax brackets.

Novotny's former agent, Georg Bischoff, said the 28-year-old defender had shared in the transfer fee, but that to his knowledge the money was claimed for tax purposes.

Former Bayer boss accused of illegal cash payments

Christoph Daum

Christoph Daum feels the strain of further allegations.

As for Daum, the Munich daily said the prosecutor was using a statement contained in a document filed in connection with Hamburg lawyer Matthias Prinz's lawsuit against Daum for alleged non-payment of legal fees.

In the statement, Prinz claims that Daum told him in the presence of a public relations man that Bayer had used foreign banks to make cash payments to him in addition to those required by his contract.

Bayer, who went to the Champions League final last year, has denied paying Novotny any money that was not taxed, but has declined comment on the Daum allegations. The former Leverkusen coach denied receiving any undeclared payments.

Dieter Ondracek, the chairman of the union representing employees of German tax authorities, said he was not surprised by the allegations. He claimed in the Süddeutsche Zeitung that "every club in the Bundesliga" uses indirect payment methods to reduce players' taxes.

But Werner Hackmann, the president of the German Football League, which operates the Bundesliga, dismissed the charge and called the league "clean."

Money is tight in the world of the soccer millionaires

Football faces a tough test over the coming months as the game across Europe feels the pinch of tight budgeting. The Bundesliga is suffering, with only 100 million ($100 million) available for new players this season - a quarter less than in previous years.

The Kirch collapse is the main reason behind this with events concerning the fall of the media empire forcing a 20 per cent reduction in income to clubs from televised games.

BskyB pulls plug on media giant Kirch to add to woes

Medientycoon Rupert Murdoch und Medienzar Leo Kirch

Murdoch and Kirch: Parting company.

Just when it looked like things couldn't get any worse, recent reports stated that Kirch was edging closer to a complete collapse after it emerged that Rupert Murdoch’s BSkyB has exercised an option to sell its stake in insolvent KirchPayTV back to the group.

By withdrawing support, BSkyB effectively strangles the financial life out of one of Kirch's last reliable cash injections.

Kirch's flagship, German pay TV channel Premiere World which carries the Bundesliga games, is held by a separate, wholly owned company and remains on-air for the moment, although it only has enough cash to last until the middle of June.

What happens beyond that date is anyone's guess. In a country where football is a religion, the removal of the beautiful game from German screens may have a disastrous effect on a nation's happiness.

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