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Bundesliga scraps major investment deal amid fan revolt

February 21, 2024

A controversial investment deal which would have seen a private equity partner invest up to one billion euros in Germany's Bundesliga has been scrapped following widespread fan protests.

German fans hold a banner reading "no to investors in the DFL" (German Football League)
Fans have disrupted matches around the country for weeks on end to show their displeasureImage: Moritz Müller/IMAGO

The German Football League (DFL) has announced that it has abandoned its plans to negotiate a 1 billion euro investment deal with a private equity partner.

The decision came after widespread fan protests against the proposals which had seen matches in the Bundesliga and Bundesliga 2 (Germany's top two divisions) increasingly disrupted by supporters throwing tennis balls and other objects onto pitches, causing delays of up to 30 minutes.

"Given current developments, a successful continuation of the process no longer appears possible," said Hans-Joachim Watzke, DFL supervisory board chairman and Borussia Dortmund CEO, in a statement following an emergency DFL meeting on Wednesday.

"Even though there is a large majority in favor of the economic necessity of a strategic partnership, German professional football is facing an acid test with divisions not only between clubs within the league but also inside the clubs themselves between players, coaches, officials, boards members and fan groups."

He added that the disputes were taking on such a magnitude that they were compromising "matchday operations, games themselves and the integrity of the competition."

Bundesliga investor deal collapses after fan protest

In recent weeks, the issue had broken out far beyond just football, with detailed debates taking place on prime-time German television and political talk shows.

Hailing Wednesday's decision, fan group Unsere Kurve ("our stands") said the "comprehensive, but very peaceful and very creative protests were ultimately the key to success."

Among the first clubs to comment on the collapse of the proposed deal were VfB Stuttgart, whose president Claus Vogt had earlier this month demanded a transparent rerun of the vote on the deal.

"We welcome this understandable decision by the DFL executive board which brings all of us who love football back together," read a club statement. "Let's now draw conclusions from recent weeks to create a basis which is as inclusive as possible for the further development of German football. Federations, clubs and fans can only do this together."

What was the proposed investor deal and why were fans so opposed to it?

German fan groups were opposed both to the deal in question and the manner in which it came about, all of which was underlined by a fundamental rejection of what they perceive to be the over-commercialization of the game.

The DFL deal proposed a "strategic partnership" with private equity firm CVC which would have seen up to 1 billion euros invested in digital marketing measures with the aim of boosting the value of the Bundesliga's international broadcast rights. In return, the investor would have been entitled to 8% of the revenues generated by those broadcast rights over a 20-year period.

While the DFL insisted the investment was necessary in order to enable German clubs to compete internationally, fans feared that a potential investor would be able to influence aspects of the game such as kick-off times, scheduling them to suit international TV viewers at the expense of stadium-goers.

The deal was initially voted through by 24 of the 36 clubs which make up the DFL in secret ballot on December 11, obtaining the two-thirds majority necessary to hand the executive board a mandate to negotiate and agree a deal with a potential partner.

However, there was controversy over the ultimately deciding vote cast by the chief executive of second-division side Hannover 96, Martin Kind, who, by process of elimination, is strongly suspected to have voted in favor of the deal despite an explicit directive from his parent club to vote "no."

This, in the eyes of fans and increasingly also some clubs, constituted an infringement of the so-called 50+1 rule, the DFL regulation which stipulates that the parent clubs - and by extension their members, the fans - must retain 50% of the voting shares plus one share in the outsourced companies which run their professional football operations, thus preventing majority takeovers.

As fan protests at matches across the country intensified, DW reported last week that one of the leading two candidates for the investment contract, US private equity firm Blackstone, was withdrawing from the process citing uncertainty and an unstable environment.

Since then, several clubs had spoken out in support of a motion proposed by Bundesliga club FC Cologne, which called for a final vote on any deal reached with the remaining investor, CVC. The vote was to be transparent and open to ensure adherence to the 50+1 rule and give any deal the necessary legitimacy. 

However, it will no longer come to that after the DFL announced on Wednesday that it was discontinuing the process.

Dozens of matches were interrupted by fans throwing tennis balls - or here, chocolate coins - onto the pitch
Dozens of matches were interrupted by fans throwing tennis balls - or here, chocolate coins - onto the pitchImage: Gerhard Schultheifl/IMAGO

What happens next?

It's the second serious defeat of this kind for the DFL since May 2023, when a similar proposal was voted down by the clubs, again after widespread fan protests. Then, interim co-CEOs Watzke and Eintracht Frankfurt board member Axel Hellmann resigned to be replaced by current permanent incumbents Marc Lenz and Steffen Merkel, who had driven the new, revamped deal.

The discontinuation of the process also marks a significant victory for German football fans, with the hardcore "Ultras" leading the demonstrations but also typically finding sympathy from others in the stands.

In numerous debates, discussions and statements, fans have often made direct reference to England's Premier League where, unlike in Germany, match tickets are increasingly expensive and where fans have no enshrined right to participation in their clubs, which are increasingly owned by sovereign wealth funds often seeking to use them for geopolitical gain.

Similarly, German fans highlighted that Saudi Arabia's Public Investment Fund (PIF), the majority owner of Premier League side Newcastle United, were investors in both Blackstone and CVC, the leading candidates for the Bundesliga investment contract.

CVC already has similar deals in place with La Liga in Spain and Ligue 1 in France. In the case of the latter, the subsidiary company created to manage the sale of the international broadcast rights and in which CVC has invested is under investigation by the authorities.

1860 Munich fans hold up banners in favor of the 50+1 rule
German football fans, such as these 1860 Munich fans, are highly protective of the 50+1 rule, which they believe safeguards the game against rampant commercialization.Image: Renate Feil/MIS/IMAGO

The future of the 50+1 rule

But the story likely isn't over yet. The sense of participation and agency which underpinned the fan campaign was founded on the aforementioned 50+1 rule, the future of which remains unclear.

The strongly-held suspicion that Hannover chief executive Martin Kind had been able to ignore a direct instruction from the democratically-elected Hannover parent club in voting in favor of the investor deal revealed that the 50+1 was effectively being circumvented in Hannover.

This has already come to the attention of Germany's federal competition regulator, the Bundeskartellamt, which had ruled last year that the 50+1 was "unproblematic" with regards to German competition law since it ensured fair, member-led, sporting competition - providing it was effectively enforced at all clubs (albeit with two status-quo-based exemptions for Bayer Leverkusen and VfL Wolfsburg). The apparent inability of Hannover 96 to ensure the effective implementation of 50+1 has led the Bundeskartellamt to reopen its investigation.

And this time, it will be taking into account the ruling by the European Court of Justice (ECJ) in December which found that European football's governing body was effectively monopolizing the market by refusing to allow clubs to participate in alternative competitions such as the proposed European Super League. This concept admittedly now appears unlikely ever to come into being, after facing a similar popular backlash when floated in 2021.

The ruling could yet have a knock-on effect with regards to how the Bundeskartellamt views the market restrictions imposed by the 50+1 rule. The fans' next battle could be just around the corner.

Edited by: Mark Hallam

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