The German Football Revolution

The entire soccer world descended upon London and Wembley Stadium for the final of one of the world’s most zealous, enthralling, and absorbing competitions, the Champions League final.  2014’s final caused a massive buzz around a brand new philosophy of building an organization that had finally come to practical fruition in front of nearly 120,000 people.  Two German teams in the Champions League final, Bayern Munich’s dynasty finally on the verge of winning a Treble were pitted against the underdog Borussia Dortmund, whose genius manager Jurgen Klopp turned them from a mid-table Bundesliga team to a powerhouse of German football and fierce competitor in European competition.  While the match ended 2-1 in Bayern’s favor and Dortmund’s story couldn’t be properly completed, the game itself was an example of how expert ownership created prowess on the field.  In Germany, supporter-first and efficient ownership has recently brought German clubs closer to goals they never would have been expected to achieve.  Germany’s business model has been vital to German clubs’ success in recent years in both growing the Bundesliga and making individual German clubs more competitive.

One long-term reason the perception of German success has changed so much is Germany’s youth academies.  The academy system was overhauled by the German Football Association in 2000, requiring clubs to set up youth teams, stadiums, and leagues in order to create new talent (Artist Academies).  As a result of this, the Bundesliga has gone from being 60 percent foreign to 60 percent German, an incredible statistic that shows operation is more efficient, as foreign players typically demand higher wages than domestic ones.  The article in The Independent further explains that Bayern Munich generously loaned a bankrupt Borussia Dortmund a very large sum of money in 2005.  Just 9 years after German football’s revolution, the two clubs fight for Europe’s biggest prize.

Another reason German ownership has been so revolutionary is its inclusion of supporters and emotionally-invested controlling owners in the running of their organizations.  Borussia Dortmund is yet another perfect example of this, although Bayern Munich and several other Bundesliga clubs have impressive followings (Champions League).  As soccer economics expert Stefan Szymanski explains in his blog, German clubs were not allowed to be owned by corporations until 1998, and in 2000 the German FA passed the 50+1 rule that required current club members to remain in control of their clubs (Less Debt).  German clubs have kept their fans involved by offering memberships to the club with tickets at lower prices that come with.

Szymanski also points out several issues with the German model and its perceived success.  Although German teams are packing stadiums, the numbers are skewed when compared to other leagues because the Bundesliga requires team to play less games than other leagues.  Profits are another issue.  Even though Bundesliga clubs are pulling themselves out of debt more easily than before, ticket prices being lower create less profit for clubs than England’s high prices (Champions League).  Szymanski reports that the English Premier League consistently reports 50 percent more profit than the German Bundesliga.

Light has recently been thrown onto Germany’s recent success, and we have explored that it is not an accident.  Ingenuous ownership and revolutionary reform has brought parity within Germany and prowess to once debt-ridden clubs.

 

Sources:

  1. Pitt-Brooke, J. (2013, April 26) Champions League success: How artist academies created joy in Germany. The Independent. Retrieved from: http://www.independent.co.uk/sport/football/european/champions-league-success-how-artist-academies-created-joy-in-germany-8588969.html
  2. Szymanski, S. (2013). The Champions League Final and the German football business model part II. Soccernomics. Retrieved from: http://www.soccernomics-agency.com/?p=457
  3. Szymanski, S. (2010, November 5). Less debt- But is German soccer’s business model really on the ball? London Evening Standard. Retrieved from: http://www.standard.co.uk/business/markets/less-debt–but-is-german-soccers-business-model-really-on-the-ball-6532848.html
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