Bundesliga’s 50+1 rule: Should other European leagues take note?

The Bundesliga is one of the top football leagues in Europe. It has behind it a glittering history of producing legendary teams and players who have starred in European and world football for many decades.

While the league and its clubs continue to share the table with other big boys of European football, there is something remarkably different about how the league, and more precisely, its clubs, operate.

The well-known "50+1" rule is unique to the Bundesliga; it prevents an individual or corporate entity from owning the major stake in a club. So, in essence, every Bundesliga club is "owned by the fans." However, the rule has recently become a topic of discussion across Europe.

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History of the 50+1 rule in Bundesliga

German clubs were traditionally not-for-profit organizations owned exclusively by members. As the sport became more professional, however, it became necessary to attract investment. The Deutscher Fussball Bund (DFB) responded by devising the “50+1” ruling. It gave clubs the opportunity to convert themselves into profit-making public or private limited companies while ensuring that the registered members’ association held a majority voting right, i.e., 50%, and an additional vote.

The ruling subsequently ensured that the majority of the investors were from Germany, with many of them being businesses that were founded in the city to which the club belongs, and who used the investment to create a stronger bond with the locals.

To avoid slamming the door on large homegrown investors from supporting their hometown clubs, a provision for exceptions was included in 2011. It stated that any legal entity that has continuously provided significant support to a club for a period of at least 20 years can take majority ownership of the club. Bayer Leverkusen, Wolfsburg and Hoffenheim are examples of this.

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Implications for Bundesliga and its clubs

The 50+1 ruling is the closest thing to a democracy in club football. Any major decision regarding the present and future of the club is put to a vote, meaning that thousands of fans are involved in the decision-making process to ensure that the interests of the club and fans at large are given precedence over the whims and fancies of a billionaire.

The result? Cheaper tickets, packed stadiums, and a vibrant fan culture, all of which help make the Bundesliga the best-attended league in the world.

Another merit of the 50+1 ruling was apparent during the proposed European Super League. While the ruling itself did not prevent Bundesliga clubs from signing up, the sheer possibility of large-scale fan uproar and the disapproval of voting members dissuaded clubs from even attempting such a shift.

However, it is not all hunky-dory when it comes to the perception regarding the ruling. This prevents two scenarios from occurring:

Firstly, a dramatic (or expedited) “rags to riches” story is unlikely to take place in the Bundesliga, which means Bayern Munich could potentially keep winning the league for another decade without a sudden shift in the financial might of other clubs.

Secondly, a club like Bayern Munich cannot leverage its current position in Europe and the world to bring in investments comparable to the likes of PSG, Manchester City or Chelsea (or even Newcastle!).

Certain factions within the Bundesliga, including Bayern’s new president, Herbert Hainer, and former Hannover 96 president Martin Kind, questioned the 50+1 ruling. Both of them raised the argument that the presence of a rich investor with a majority stake could have addressed issues such as the financial gaps caused by the COVID-19 pandemic, as match revenues took a hit and broadcast revenues were delayed.

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Can (or should) other European leagues implement a 50+1 ruling?

As far as the question of adoption goes, it is unlikely that other European leagues will agree to the implementation of such a ruling. Call it reckless, but the huge investment that has gone into clubs in England has contributed to the EPL becoming one of the most competitive leagues in the world.

The same could happen to other top European leagues as well, and understandably, the leagues would be tempted to keep that door open.

The question of such an adoption has only taken center stage following the threat of a break-out European Super League – a move which left a lot of fans realizing the growing disconnect between themselves and the club authorities.

Investors want returns, which are not always a product of on-field performance, and even when they are, they are not necessarily achieved by staying true to a club’s traditional values. Boris Johnson even announced an investigation into the governance of football and the role of fans.

Incidentally, the DFB themselves have been mulling over changes to the 50+1 rule since the onset of the pandemic. It brought forth several challenges faced by clubs due to restrictive financial governance. Perhaps once Germany finds a more flexible solution, it could be the start of a continental adoption.

RB Leipzig have already shown that the current ruling isn’t foolproof. They simply took charge of a fifth division club (Markranstädt) in 2009 and created a member association where only 19 members have voting rights – all of whom are employees of Red Bull.

There is little doubt that the 50+1 ruling is hindering the shift in power away from Bayern in the Bundesliga, as well as proving detrimental for the other Bundesliga teams in their pursuit of continental glory.

Yet, Bundeskartellamt (BKartA), Germany’s independent competition regulator, concluded that the ruling was not an infringement on free market competition laws, and a vote in 2018 saw 36 out of 38 Bundesliga and Bundesliga II clubs vote in favor of the 50+1 ruling.

It raises the question - is there something more than on-field results which fans in Germany care about, that fans of other European clubs could slowly be losing?

Perhaps it is the reassurance that football is still about the fans, that their role goes beyond filling seats and purchasing merchandise, that they are part of the club’s machinery, and the pride of being able to call a club truly their own.