German model highlights Man Utd dilemma

[ian1964 10,720]

Manchester United's Champions League quarter-final at Bayern Munich on Tuesday is not only an on-field contest between two of Europe's great clubs - it also represents a clash of two very different financial philosophies.

 

While at United the talk is of takeovers, Bayern supporters are safe in the knowledge that such a scenario is unlikely to ever unfold at the Allianz Arena.

 

The system by which Bundesliga clubs are regulated, with an emphasis on strict financial rules and licensing, means Bayern are debt-free, allowing the club to offer some tickets for as little as 12 euros (�£11) in a world-class stadium.

 

That is a world apart from the Premier League model of light-touch regulation that has allowed the United States-based Glazers to saddle United with debts of �£716.5m.

 

It has become a debt too far for thousands of their fans, so much so that the Red Knights, a group of wealthy United followers in alliance with the Manchester United Supporters' Trust is attempting to wrest control of the club.

 

Stuart Dykes is a Manchester United fan living in Germany. He also supports Schalke and pays 13 euros (�£12) to stand in the Veltins-Arena and watch his team.

 

The cost of the ticket includes free public transport to the stadium from certain areas. Membership of the Gelsenkirchen club costs him 96 euros (�£86).

 

"In England, the Glazers are allowed to come in, while Portsmouth can have four owners in a season. That cannot happen in Germany," Dykes told BBC Sport.

 

"The German model means Bayern are attracting lots of investment but without the risk. It's completely different from United - it's a whole different philosophy.

 

"Bayern looked at what was happening in the United Kingdom and said: 'We don't want that to happen here'. They wanted to maintain control of the club."

 

Arguably, this financial prudence has come at a price, having limited the ability of German clubs to compete with their big-spending English counterparts, who can offer higher wages to players, in the Champions League.

 

Bayern were the last German side to be crowned champions of Europe in 2001, having lost to United in dramatic fashion two years earlier.

 

English clubs have triumphed twice since 2001 and appeared in the final on six occasions in the last decade, a period in which only one other German club has reached the final, Bayer Leverkusen losing to Real Madrid in 2002.

 

"When clubs can spend what they want, like in the Premier League, it's very difficult for German clubs to succeed," said Antonia Hagemann, project manager with the UK-based Supporters Direct organisation, which has carried out a Uefa-funded study of club ownerships and fan involvement across Europe.

 

"But there's a fair chance that they will have the last laugh. The German model doesn't restrict success, but the Premier League has set up a 'rat race' for everyone in Europe. It sees football as a brand - it is not interested in regulation."

 

At the heart of the German model are the fans, rather than owners or shareholders.

 

Bundesliga clubs broke the 2bn euro (�£1.8bn) level for the first time in 2008-9

It was the seventh successive season in which an attendance record was set - averaging 42,000 a game

Average ticket price: 20.79 euros (�£18.70) - about twice as much as in the Premier League

The Bundesliga is the European champion of sponsorship deals - 573m euros (�£515m)

 

Until the late 1990s, all Bundesliga clubs were 100% owned by members - fans who pay to be part of the club.

 

However, the clubs recognised the need to compete with their European rivals and that this might not have been the best way to do it.

 

So some, including Bayern, spun off their professional football "sections" into outside limited companies, separate from the parent club, to attract investment.

 

Under Bundesliga rules, members must own 50% of the shares plus one extra vote of these spin-offs. This is the so-called 50+1 model, which makes it impossible for private investors to take over a club.

 

It is this model that many view as the best in Europe - and a far cry from the Premier League, where most clubs are struggling with debt. Earlier this season, Portsmouth became the first top-flight club to go into administration.

 

A Uefa report in February revealed that the total debt of Premier League teams - �£3.4bn - is greater than that of the rest of Europe's top-flight clubs put together.

 

And although the Premier League clubs make up more than half of club assets in Europe, Manchester United's debt is almost more than �£150m higher than that of the 36 clubs in Germany's top two divisions.

 

That is because Bundesliga clubs must submit information about their budgets and expected expenditure, and prove they are financially stable in order to play in the league.

 

There are also check-ups during the season, and licences can be withdrawn.

 

Second Division club Arminia Bielefeld were deducted four points by the Bundesliga for breaching the terms of their licence after suffering a financial shortfall and were fined 50,000 euros (�£45,000) for the violation, which they admitted in February.

 

"I think the strict system is just one of the reasons preventing them [German clubs] from competing in the Champions League," said Michael Ashelm, of the Frankfurter Allgemeine Zeitung newspaper.

Robben and Ribery

You can watch Robben and Ribery for just �£11

 

"In the past, the German clubs had many problems with things like defunct training systems and antiquated managers. This changed a lot with a new generation of managers and coaches.

 

"On the other hand, the financial system prevented the clubs from a disaster and allows for stable conditions - in contrast to England or Italy."

 

And of the comparison between top-flight clubs' debt in England and Germany, he said: "You need a strong value as a club to carry such debt as Manchester United and Liverpool - and the value of Bundesliga clubs is under it.

 

"This season Schalke had many problems with their liquidity. They have debts of about 140m euros (�£125m)."

 

Schalke's debt accumulated from the construction of their new stadium, which was eased by a 100m (�£90m) euro sponsorship deal with Gazprom. "For a big German club, this is life-threatening," Anselm added.

 

The German model does have its critics. Hannover 96 president Martin Kind has been a long-standing and vocal opponent of the 50+1 rule, and challenged it in the courts last year.

 

However, 32 of the 36 Bundesliga clubs rejected his proposal.

 

"Everyone in Germany used to look at the Premier League as the ideal model, but now the big clubs in England are in serious trouble," said Hagemann.

 

"I tell everyone not to follow the Premier League model. Fans in England don't really have a say.

 

"The English model is the worst model - its clubs have a perception a spending more money than they have."

 

Tony Woodcock, the former England striker who had a spell in Germany with Cologne during the 1980s, says the financial restrictions placed on Bundesliga clubs are not necessarily a disadvantage.

 

He believes Bayern are the "leading example" of how well run the German clubs are.

 

"Bayern are a bit down the pecking order in terms of attracting players compared to other European teams, but they do have some top players," he said.

 

"They have still attracted Franck Ribery, Mario Gomez and Arjen Robben - they have upped it a gear. To get them, you have to offer good rates. Bayern realise this."

 

606: DEBATE

Financial fair play?

 

Woodcock also believes that English clubs could learn a lesson or two from their German counterparts in how to treat their fans.

 

"For my first training session in Cologne, 10,000 people turned up," he said. "In Germany, they welcome the fans to the training ground but in England it's like Fort Knox."

 

A combination of reasonably priced tickets to watch the likes of Ribery and Robben strut their stuff in superb facilities ensures that Bayern fans are far happier than United supporters in the way their club is run, according to Dykes.

 

It remains to be seen whether over the next few months the Red Knights and Must can bring a similar degree of German prudence to Old Trafford.

 

http://news.bbc.co.uk/sport1/hi/football/europe/8589872.stm