The 50+1 brand
Overthinking the sports business, for money
The 50+1 brand
A short newsletter this week as I’m travelling about a bit.
I just want to flag my conversation with Jan and Markus Fjortoft on German football.
The podcast is here.
They have a YouTube channel where they talk about every aspect of the game in Germany.
The genius, for me at least, is that they do this in English.
Two former Norwegian professional footballers, both fluent in the languages and cultures of Germany and the UK, with deep expertise on football and the business of it, from international to local club level.
Check it out here, it’s really good.
It’s impossible to talk about German football without mentioning 50+1, the mandate ensuring clubs hold at least 50% plus one vote in the shareholder assembly of the company that operates their professional football department. This prevents outside investors from gaining majority control and dictates how a club is run.
(It’d be like talking about rights holder owned and operated media strategy without referencing Drive to Survive. The very idea of it is absurd.)
The power of the 50+1 brand is astonishing.
My favourite story is this one:
During last year’s anti-p/e protests - German club fans rebelled against the German football league (DFL), which runs the Bundesliga, forcing it to drop plans to sell an estimated €1bn (£850m) stake in its media rights income to CVC Capital Partners and/or Blackstone, which had wanted to swap an upfront fee for a 20-year stake in broadcast and sponsorship revenue.
Tennis balls, flares and electric toy cars (‘we won’t be remote controlled’ geddit?) were sent on to the pitch to disrupt games.
The best bit was when protesters clamped combination bike locks to the goalposts.
They were removed by bolt cutters, but could have been more simply unlocked with the code 5001 – as The Guardian put it, ‘a reference to the almost sacred 50+1 ownership rule governing Bundesliga clubs, according to which a club has to either in whole or as a majority own its association football team.’
There’s not many jokes featuring mandatory financial regulation, but tbf they found one.
The argument against 50+1 is that it’s holding German football back, particularly when compared with the Premier League.
The free market versus regulation and all that.
When the p/e protests won out, Hans-Joachim Watzke of the DFL exec committee and CEO of Borussia Dortmund waffled on about the entrepreneurial necessity of the strategic partnership (with p/e).
Good luck with that.
Like all truly great brands, 50+1 is an idea that forces you to take a side.
As Jan Fjortoft put it on our podcast, the rise of English football’s independent regulator is about fans wanting agency in a scary world. They want accountability from owners. But the owners ain’t showing up.
Instead, the manager is pushed out to represent the club, the definition of responsibility without authority.
In Germany, the owners show up on chat shows and fan forums. This is an underrated part of the equation.
There’s a good line in Miguel Delaney’s book, States of Play that talks to the sense of helplessness that we all feel in the face of the billionaire oligarch class. Delaney quotes a club exec on trying to apply football governance rules to oil states and private equity groups.
‘You’re not arguing with club executives. You’re arguing with armies of lawyers, combined with the potential for misinformation. It’s very different to a row with David Dein.’
Back next week with a full fat newsletter.
Meanwhile, listen out for The Bundle tomorrow.