Germany’s competition authority OKs 50-plus-1 rule limiting outside takeovers of soccer clubs

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This article was published 13/07/2023 (1179 days ago), so information in it may no longer be current.

BERLIN (AP) — German soccer’s 50-plus-1 rule designed to prevent the outside takeover of clubs has been given the all-clear and strengthened by the country’s federal competition authority.

The Bundeskartellamt (Federal Cartel Office) said on Thursday that the German soccer league’s commitment to maintaining the rule will be declared binding because of its commitment to remove the “possibility to grant benefactor exemptions.”

The rule states that members of a club need to retain a majority of voting rights – at least 50% and one vote – which in theory prevents outside investors from taking over.

The three clubs that were already given exemptions – Bayer Leverkusen, Wolfsburg and Hoffenheim – will continue as before, albeit under stricter conditions.

“The clubs will not only have to continue to comply with existing conditions but also be obliged to allow more members to participate and to share the benefits by paying a compensation amount,” the office said.

Hoffenheim backer Dietmar Hopp already said in March that he will transfer the majority of his voting rights back to the club to bring it in line with the league’s 50-plus-1 rule. The SAP software company co-founder was granted an exception because he backed his hometown club as an investor continuously for more than 20 years.

Leipzig, which is backed by energy drinks giant Red Bull, was not mentioned by the cartel office specifically as it found other ways to get around the rule by limiting membership to a select few.

Leverkusen and Wolfsburg were set up as workers’ teams. Pharmaceutical giant Bayer continues to own Leverkusen, and automobile manufacturer Volkswagen still backs Wolfsburg.

Cartel office president Andreas Mundt said the league’s commitment to removing any future exemptions “appear generally appropriate to dispel our preliminary competition law concerns.”

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In 2021, the competition authority said the basic 50-plus-1 rule was unproblematic under competition law because of the sporting objectives it pursues, but that it was problematic when there were exceptions potentially distorting the competition.

The decision is not binding yet. The authority has sent its draft decision to the German soccer league (DFL), the German soccer federation (DFB), and the clubs involved, before it will declare the commitments binding.

Then, the office said, it will be “up to DFL itself to ensure a non-discriminatory and consistent application and assessment practice regarding the granting of licenses under the soon-to-be-amended league statutes.”

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AP soccer: https://apnews.com/hub/soccer and https://twitter.com/AP_Sports