Football club ownership in Germany – less romantic than you might think

Published 28 July 2015 By: Christian Keidel, Alexander Engelhard


In this hyper-commodified era of football, with professional clubs organized primarily as commercial companies - some of which are controlled by super-rich foreign investors - many believe that the German Bundesliga has remained the last stronghold of member-run clubs, deeply rooted in their communities with low ticket prices and high attendance numbers.

Indeed, German football has implemented regulation stipulating that if a club is run as a commercial company, the majority of the voting shares of that company always have to be controlled by a member-controlled parent association (the "50+1 rule" – see below). Furthermore, in March 2015, the Bundesliga introduced regulations that also restrict minority ownership in more than one club to avoid investors owning significant stakes in several different clubs. Unsurprisingly, there are exceptions to the rules and reality shows that clubs have become creative in adapting to the regulation in their endeavours to attract investment.

This article gives an overview of the factual and regulatory evolution of club ownership in Germany, explaining in detail the 50+1 rule and its application in practice by looking at the examples of TSG 1899 Hoffenheim, TSV 1860 Munich and RasenBallsport Leipzig. It also touches briefly on the new rule regarding multiple club investments, which has gained relevance with the recent promotion of FC Ingolstadt to the 1st Bundesliga. As a result the next season will feature three clubs in the German top-tier league which are substantially influenced by the German car manufacturer Volkswagen or its subsidiary Audi.



At the outset, the issue of club ownership is closely connected to the legal (corporate) form of a club, namely the distinction between the member association and the commercial company.1 Whereas, in the motherland of football – England - professional football clubs have been organized as commercial companies for most of the 20th century, in Germany and elsewhere clubs remained local member associations much longer. These local member associations usually offer different sports besides football (e.g. FC Bayern Munich has departments for baseball, basketball, handball, bowling, chess, and table-tennis among others). Yet, the professionalization and commercialization of football required many of these entities to transform their professional football departments into companies since the legal framework for member associations no longer matched the commercial realities of clubs with annual turnovers reaching into the hundreds of million Euros. In particular:

  • Clubs organized as member associations are steered by their boards. However, the major decision-making power is vested in the general assembly, a body generally made up of all (voting) members of the association, which complicates the decision-making process;
  • Member associations generally enjoy the tax benefits of non-profit organisations, yet the realities of modern club football demand commercial activities that are hardly compatible with a non-profit tax regime;
  • Member associations are in principle not open to investments through shareholding. Membership rights in an association cannot be traded unlike the shares of a commercial company.

Not least because of the reasons stated above, in England clubs are generally incorporated as limited companies (public or private2), a legal form that allows them to minimize the personal risk of their owners and potentially increase their attractiveness to investors at the same time. The legal status of its clubs has arguably helped the English Premier League to become the most successful football league in the world –at least from a revenue perspective. However, the organizational structures of its clubs and the lack of regulation to the contrary has also led to a number of major takeovers; allowing multinational corporations and private investors to take control of some of the biggest names in domestic club football, e.g. Chelsea FC, Manchester City FC, or Liverpool FC. More than half of the Premiere League's 20 teams are now in foreign hands.3

In 1998, the German Football Association ("DFB") also allowed the clubs of the Bundesliga, which were traditionally organized as member associations, to transform their professional football departments into commercial companies. However, at the same time, provisions were put in place that demanded the majority of voting rights within such companies (i.e. >50%) still be controlled by its parent member associations. This rule-change marked the birth of the famous 50+1 rule.

The 50+1 rule

1.Purpose and wording

When the DFB allowed the clubs of the Bundesliga to outsource their professional football departments into commercial companies, it was felt that regulation was needed to protect German football from the anticipated adverse effects of outside influence on clubs.4 Particularly, the aim was to safeguard:

  • the economic stability of clubs;
  • the relationship between professional and amateur sport within clubs; and
  • the integrity and credibility of the competition.

To do so, the DFB and the League decided to introduce the following rule to its statutes:

"A company may acquire a sporting license only, if a club [i.e. the member association] has a controlling stake in it […]. The club holds a majority interest in the company […] if it possesses more than 50% of voting shares plus one additional vote in the shareholders assembly".5

While the rule requires that the member association holds more than 50% of voting shares of the football company at all times, an investor is not prohibited from acquiring a majority of the capital shares. Initially, the provision allowed for an exception where an investor financially supported a club for over 20 years before 1 January 1999. In that case an investor was allowed to obtain also a majority of the voting shares in a club. This exception was effectively limited to the clubs of Bayer 04 Leverkusen and VfL Wolfsburg, and so the exception became known as “Lex Leverkusen" or "Lex Wolfsburg”. Both clubs were founded as works teams of German corporate giants Bayer and Volkswagen, which hold 100% of the shares and voting rights respectively. However, these exceptions came at a high price, as Bayer and Volkswagen are equally prohibited from selling their shares to a third party. The respective rule reads as follows:

"[…] shares in the corporation must not be sold but may only be transferred back to the parent club free of charge. In the event of a sale of shares contrary to the rule or refusing to transfer the shares back to the parent club, the sporting license of the corporation will be revoked."6

2.Challenges to the rule

The 50+1 rule has been subject to intense political and legal discussion.7 Opponents of the rule believe that it led and will lead to smaller investments in the Bundesliga than in other European Leagues, thus having a detrimental effect on the quality of the football and undermining the status of the league. Normally, an investor will only invest considerable amounts into a club (e.g. by acquiring capital shares) if it obtains a decisive influence in the club's decision-making process in return.

Some clubs would argue that without substantial outside investment they could never achieve the heights of the current industry leaders FC Bayern Munich, Borussia Dortmund, VfL Wolfsburg or Bayer Leverkusen. In legal terms, the critics argued in particular that the 50+1 rule would violate Article 101 of the Treaty on the Functioning of the European Union ("TFEU"),8 which prohibits cartels and other agreements that could disrupt free competition as well as Article 63 TFEU granting the free movement of capital.

Led by its long time investor and president, Martin Kind, Bundesliga club Hannover 96 in 2009 filed an application for an abolition of the 50+1 rule in favour of a new, more investor-friendly system comparable to those of England, Italy or Spain. However, with an astonishing voting result of 32:1 in favour of the status quo, the clubs of the 1st and 2nd Bundesliga decided to retain the 50+1 rule at their meeting in November 2009. 9 Before, German fans of all Bundesliga clubs across the country had signed a petition that German Football should keep the famous rule.10

Undeterred by this feedback, Martin Kind filed a claim before the DFB Court of Arbitration asking to declare the 50+1 rule null and void. Whereas German football fans already foresaw the arrival of a “Second Bosman”, Kind during the proceedings changed his original prayer for relief, ultimately requesting to declare void merely the exception of the 50+1 rule tailored to the likes of Wolfsburg and Leverkusen, namely that an investor was allowed to obtain the majority of the voting shares in a club only if it had financially supported a club for over 20 years before 1 January 1999. In its decision of 25 August 2011 the DFB Court of Arbitration11 upheld Hannover's appeal as it found an unequal treatment of clubs with investors which could not fulfil the requirement to have invested in the club before 1 January 1999.12 In the decision on costs, the Panel concluded in a summary examination that, apart from the exception, the 50+1 rule would most likely be valid and justified under German and European Law in light of the autonomy of associations guaranteeing the right to create an own regulatory frame work. However, it is important to note that the Panel did not enter into a detailed assessment of the 50+1 rule in relation to German and European competition law (Article 101 TFEU) or Article 63 TFEU at the time.

After the decision the DFB and the League amended the 50+1 rule to allow all investors who financially supported a club for more than 20 years to request from the League a special permission to obtain the majority of voting shares in a club independent from the initial reference date.

A translation of the amended rule reads as follows:

"Exceptions can only be granted if the entity in question has continuously and significantly invested in the club for more than 20 years, subject to approval by the League's board. It is required that the entity in question in the future continues to invest in amateur football of the club to the same extent as before."

At the same time, the requirement for investors who had obtained the majority of the voting shares, not to sell these shares unless transferring them back to the parentassociation free of charge, remained in effect.

3.The application in practice

The following three examples provide an overview of the application and consequences of the 50+1 rule in practice:

3.1.TSG 1899 Hoffenheim

TSG 1899 Hoffenheim is the home club of investor Dietmar Hopp, one of the founders of SAP, a German multinational software corporation. Hopp, who played for the club during his youth, has been investing substantial amounts into TSG Hoffenheim for more than 20 years. Until the 2000/2001 season, the club played between the 8th and the 4th tear of German football. After Hopp accelerated his financial support, the club finally managed to reach the Bundesliga in the 2007/2008 season after two consecutive promotions. Halfway through its first Bundesliga season, Hoffenheim ranked 1st in the league table and finished 7th at the end of the season. Since then, Hoffenheim has been playing in the Bundesliga with growing respect from commentators and fans alike, most of whom were very critical about the arrival of the once unknown club spoiled by its rich fan, Mr. Hopp. Despite having invested allegedly more than 350 million Euro into the club, Hopp adhered to the 50+1 rule and until recently only held 49% of the voting shares of TSG 1899 Hoffenheim GmbH (the private limited company which manages the professional football operations of the club). For most of the past years it was difficult to tell how much factual influence Hopp had on the decision-making process in the club, but legally the parent member association always had the majority vote to decide without his approval. As of 1 July 2015 the aforementioned speculations have ended since the League decided to allow Hopp to take over the majority of voting shares at Hoffenheim due to his long-term investment in the club. Consequently, Hopp will not be able to sell these shares unless transferring them back to the parent association free of charge.

3.2.TSV 1860 Munich

TSV 1860 Munich (“1860”), formerly the big rival of FC Bayern Munich, has been struggling financially since its relegation from the Bundesliga in 2004. In 2011 new hope arrived with the Jordanian businessman, Hasan Ismaik, who took over 60% of the capital shares of the company which is operating the professional football department at 1860, but only 49% of the voting shares in order not to violate the 50+1 rule. Unfortunately, since Ismaik's arrival the situation at 1860 became more turbulent than before. The club changed its head coach seven times and saw three different Presidents of the association in only four years. In the 2014/2015 season, 1860 barely avoided relegation by scoring the winning goal in the 93rd minute in the second leg of the play-offs against 3rd league side Holstein Kiel. In June 2015 the entire executive board of the association including the President resigned after a power struggle with the investor over the replacement of the current sports director. Here it became apparent that the investor, although holding only 49% of voting rights, had a far greater actual influence in the club, which he allegedly exercised by threatening the executive board of the associations to terminate loans he had previously given to the club.

While the example of Hoffenheim with their local investor Dietmar Hopp worked tremendously well for the club, the arrival of Hasan Ismaik at 1860 has led to considerable chaos among the leadership of the club and stagnation in the club's sporting performance.

3.3.RasenBallsport "Red Bull" Leipzig

Despite or because of the above, the energy drink and sports marketing giant Red Bull chose a different path into German professional football. It did not take over the shares of a traditional club. Instead, in 2009 it founded an own member association consisting of only Red Bull employees and acquaintances, which took over the sporting license of the East German amateur club SSV Markranstädt. Because the DFB and DFL statutes do not allow changing a club's name for the sole purpose of advertisement,13 the club chose to call itself RasenBallsport (translating to "lawn ball sport"), abbreviating to RB Leipzig, unsurprisingly similar to the brand name "Red Bull".

Due to RB Leipzig's organizational structure as a member association it is generally open to new members. However, to ward off membership applications of average fans and in order to keep control over the club, it was reported that the board of the club originally set membership fees at 800 Euros. Until today the club is said to have not more than 9 members with voting rights. Because the club is run as a member association, the 50+1 rule is not directly applicable to the club.

Since Red Bull took control of the club, it has been promoted three times. When promoted to the 2nd Bundesliga in 2014, public debate ran high over whether the club should be issued a license for its obvious circumvention of the 50+1 rule. Only after several concessions made by the club, including a change of its logo (to avoid resemblance with the Red Bull logo), an amendment of its membership regulations and the formal declaration to remain independent from its sponsor Red Bull, the league issued a license to RB Leipzig. Some have suggested that the club was given a license also to avoid a legal challenge of the 50+1 rule by RB Leipzig.

Needless to say that many fans were not amused by the League's decision. At the same time, it is hard to deny that RB Leipzig revived the East German football landscape which has been struggling for many years. Playing at the former Zentralstadion in Leipzig (one of the venues of the 2006 FIFA World Cup, which has been rebranded Red Bull Arena in 2010), the club had an average attendance of 25,000, ranking 4th in attendance numbers in the last 2nd Bundesliga season. Whether RB Leipzig will be promoted to the 1st Bundesliga is no longer a question of if but simply of when.


New restrictions on multiple club investments

Besides the 50+1 rule, the League in March 2015 also introduced a regulation that restricts minority ownership in more than one club to avoid investors owning significant stakes in several different clubs. The new rule reads as follows:

"No one may be involved directly or indirectly with a stake of 10% or more of the voting rights or capital in more than one corporation [i.e. a football club organized as a commercial company]. Regardless of the stake no one may be involved directly or indirectly with voting rights or capital in more than three corporations. The restrictions under clause 1 and 2 shall not apply to stakes that were acquired prior to March 4, 2015."14

In its scope, the new rule also goes beyond the requirements set forth in Article 5.01 lit. c of the Regulations of the UEFA Champions League,15 which prohibits a legal entity to have "control or influence over more than one club participating in a UEFA club competition". Control or influence is defined in the UEFA rules as holding or controlling a majority of voting rights in a club or being able to exercise a decisive influence in the decision-making of a club. In contrast, the restrictions on multiple club investments in Germany already prohibit minority shareholding of 10% or more in more than on club independent from the actual influence of the investor in the club.

The new rule has gained relevance with the recent promotion of FC Ingolstadt to the 1st Bundesliga. As a result the next season will feature three clubs in the German top-tier league which are substantially influenced by the German car manufacturer Volkswagen or its subsidiary Audi. VfL Wolfsburg is fully owned by Volkswagen. Audi holds a 8.33% stake in FC Bayern Munich and controls 19.9% of FC Ingolstadt, where half of the board of directors are either Volkswagen or Audi affiliates. However, because Volkswagen and Audi had acquired their stakes in the aforementioned clubs before March 2015, their investments are protected from the rule. Critics have already coined the term "Lex Volkswagen" to describe the exception. The new rule at least prohibits that Volkswagen can increase its stakes in the mentioned clubs or acquire new stakes in other clubs beyond VfL Wolfsburg, FC Bayern Munich and FC Ingolstadt.

With VfL Wolfsburg and FC Bayern Munich playing in the UEFA Champions League next season, the exception to the rule will also have to be assessed in light of Article 5.01 lit. c of the Regulations of the UEFA Champions League. However, it is not expected that the German clubs will run into trouble with UEFA as Volkswagen does not have the required control or decisive influence on the decision-making process at FC Bayern Munich in order for it to violate UEFA rules.



The above has shown that the regulatory regime applicable to club ownership in Germany has generally prevented big takeovers of Bundesliga clubs by outside investors. Apart from the possibility to acquire the majority of voting rights after continuously and significantly investing in a club for 20 years, investors may acquire a majority of capital shares, as long as they do not gain the majority of voting rights at the same time.

While in Hoffenheim, the regulatory regime has led to a prime example of a long-term local investor building a well-functioning club with a very strong youth department; it has failed to work for 1860 Munich, where it leads to continuous power struggles between the investor and the member association. At RB Leipzig the rule was unable to prohibit the founding of a new club, which is effectively controlled by energy drink and sports marketing giant Red Bull.

While the examples discussed in this article have shown that the rules constitute significant obstacles for investors, most Bundesliga clubs have managed to control their finances without the investments many of its European counterparts are able to enjoy (13 out of 18 Bundesliga clubs are profitable16).

However, considering the recent challenges against sport regulations on the basis of European competition law and the fundamental freedoms of the common European market (e.g. the challenge against UEFA's Financial Fair Play Regulations) the 50+1 rule might be soon challenged once again, despite the DFB Court of Arbitration ruling in 2011. At the time, the arbitral tribunal did not fully assess the validity of the rule under European and German competition law and critics have suggested that there is indeed no clear justification as to why a member association would be more capable of controlling the sporting and managerial fate of a club than perhaps a single owner.17

Should a club (or an investor) consider challenging the status quo it would be interesting to see how the DFB and the League defend the purpose of the regulation (i.e. the economic stability of clubs; the relationship between professional and amateur sport within clubs; as well as the integrity and credibility of the competition). There is no conclusive evidence that the above could not be reached with less rigid measures or that German League competition would be less credible without the 50+1 rule.

The outcome of such a proceeding would be difficult to predict.18 However, it would not be a surprise if the DFB and the League amended their rules before they agree to run the risk of being repealed by a court or arbitral tribunal. In any case, the legal and political discussions about the regulations on club ownership in Germany will certainly continue in the future.


Related Articles


Christian Keidel

Christian Keidel

Christian Keidel is a salary partner at Martens Lawyers in Munich, Germany. He joined Martens Lawyers as part of the initial spin-off team from Beiten Burkhardt, an international commercial law practice. Christian holds a legal degree from the University of Munich and has also studied at the University of Seville.

  • This email address is being protected from spambots. You need JavaScript enabled to view it.
Alexander Engelhard

Alexander Engelhard

Alexander Engelhard is a lawyer at ARNECKE SIBETH DABELSTEIN, a German full service law firm with a team of dedicated, highly specialized lawyers who provide comprehensive legal advice to the sports, media and entertainment industry. Alexander focuses on dispute resolution, especially in sports-related cases. He also advises clients on the drafting of rules and contracts.

  • This email address is being protected from spambots. You need JavaScript enabled to view it.