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Commercial Investors – Pernicious or Benign to Football

Introduction

18th of April 2021 was a huge shock for a footballing community across the globe, the new era of the so-called European super league was on the verge of taking its full form. A huge feeling of apprehension swung across diehard football fans across the world. This breakaway league was brought in by a vicious circle of billionaire football team owners who treated their clubs as nothing more than ‘commercial enterprises’, completely overlooking 100s of years of rich tradition and history.

Teams once owned by the poor working class were now put into ruins by a swath of greedy billionaires who have no regard over European football and what it meant to the fans. The idea of super league has been hovering over the years but came into existence due to the upshot of the recent global pandemic which had a significant financial hit on football owners. Games being played behind closed stadiums met with no match day revenue and clubs found it virtually impossible to keep up with its huge list of payrolls. The lucrative proposal of the European super league was expected to bring in millions in dollars of revenue which consequently rose to billions through broadcasting rights and brand deals. As it stood this league was to be played by 20 topflight teams, including England giants like Liverpool, Manchester United, Arsenal to the Spanish and Italian clubs like Real Madrid and Juventus.

According to the European super league website, the competition comprised of 20 clubs with 15 founders and 5 annual qualifiers, playing 2 legs of home and away games with 2 group of 10 clubs each. The top 3 contenders of each of the group would qualify for the quarter-finals while the teams finishing 4th and 5th would compete against each other for the final ticket to the last quarter-final spot. This rather bizarre reform was intended to fulfil the acquisitiveness nature of billionaire owners. It outright strips out the element of competition in football completely overlooking the lower end teams who have been left to rot. Teams in national leagues would incur a hefty financial bruising, with sparse broadcasting and sponsor revenue. For instance, the English premier league pays a solidarity sum of £100 million to the three tiers of football league directly below it. The absenteeism of the big six in the premier league would mean less revenue therefore significantly cutting down the funds available for teams in grassroot football.

One of the major draws of football is its unpredictability, the sense that any team can win or lose. Leicester football club winning the English premier league during the 2015-16 took the footballing community by storm, a team which was never put into the mix of competing for the top 4, let alone to win the league. All these unique aspects of conventional football would have been put into question with this breakaway league. It is imperative to understand the roots of such discourteous and insensitive decisions. On first glance, it is very obvious that top level management or the so called stakeholders are the very parties to be held liable. Their lack of competency and mismanagement have directly been affecting team’s performance on the field causing major rage and despondency among the fans. Over the years top teams like Arsenal, Manchester united, Inter Milan have been hit by a major decline due to independent ownership. Arsenal once regarded as one of the biggest teams in European football now sits mid table failing to qualify for the major European competition of Champions league for the past 5 consecutive years. All this boils down to the question of weather independent owners should be allowed major stakes at a football club, should there be a significant revamp of the present ownership laws regarding football?

Independent Ownership

Football clubs are considered to be a distinct legal entity in themselves. As per the current legal rules put into place by the Football Association (FA) for the premier league, individual owners are granted the permit to own hundred percent of the stakes at a club. This model is generally seen in English football where most decisions are made by the club board members themselves. Fans who are the life and blood of any team and totally disregarded and voiceless. There are no independent regulators who keep in check of the internal functioning of the clubs and another attempt to a breakaway league to disrupt the footballs open pyramid is very likely. It is imperative for such ownership models to be followed by significant rules and regulations to ensure that the core principles of the game are adhered to. Breaching of these rules and charter should be subjected to significant sanctions. It is a no brainer that to prevent such disruptive resolutions in the future, it is imperative to curb the greed of individual owners. This is where the 50+1 German model of ownership becomes favourable. This ownership model allows no more than 49 percent stakes to be owned by commercial investors. In essence, this means private investors cannot buy majority stakes and prioritise profits over the desires of fans. This prevents the reckless of private ownership as seen in the case of premier league and other major European league teams.

50+1 German Model of Ownership

Before the period of 1998 German teams were exclusively run as non-profit organizations and no private ownerships were granted. It was in October 1988, the German Football Association (DFB) decided to bring wholesale changes in the ownership climate, bringing in the new ownership model of 50+1. The 50+1 model essentially means not more than 49 percent stakes of the football team can be owned by commercial investors. This model is rigorously followed by teams in the German Bundesliga most notably European giants like Bayern Munich and Borussia Dortmund. One of the major advantages to the model is that fans have a major say into decisions made by the club such as ticket prices, changes in club badges or stadiums. The nefarious decision of the European super league was rejected first hand by the top 2 German teams due to the great influence fans have in the team’s decision-making process. The benefits of the system are very clear where fan’s game experiences at the lowest cost are made the priority. A season ticket for Bundesliga Bayern Munich is made available at £130, less than half the cost for the cheapest premier league season. This also means high fan loyalty in German stadiums recording the highest average attendance. A gameday at RB Leipzig would cost a mere £13, Evidently fans in Germany are more thrilled to watch games being more affordable even for the ordinary.

If not for this model clubs like Borussia Dortmund and Bayern Munich would have joined hands to be a part of menacing self proclaimed big teams of European football enforcing high financial strains on their beloved fans. While it would bring a smile on the faces on many fans to be a direct part of their football team it is very less likely that the German football model would ever be enforced in other top European leagues

Conclusion

The recent atrocities of the European super league have nurtured a widespread uproar among the football community, rival fans have once again united for common interest and to save football from its commercialization. But a major upshot of such ruthless decisions made by a few greedy individuals is whether necessary tweaks are being made in ownership laws regarding football. Football, A game made for the working class centuries ago was on the verge of complete destruction this past year, if this trend continues with no reform in laws regarding ownership of football teams, it wont be long until the footballing elites fully turn their backs on football fans and its rich centuries of tradition.

This article has been written by Shreyas Balu, first-year law student at IFIM Law school, Bengaluru

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