By J Hutcherson (Mar 9, 2021) US Soccer Players – The Deutsche Fussball Liga released its 2021 financial report highlighting exactly what you, me, and pretty much anybody paying attention would expect. The pandemic has had a sizable influence on Bundesliga money and empty stadiums drag finances down. That’s the new truism across sports and countries. The only question is how much of an impact it’s having. For German soccer, revenue was down 5.7% in the topflight and 7.2% in the 2.Bundesliga. Keep in mind, that’s for the 2019-20 season that was progressing as normal until March.
“No one was prepared for the coronavirus crisis and the extent to which it would affect all areas of life worldwide, and German professional football is no exception,” DFL CEO Christian Seifert said. “Over the past 20 years, the Bundesliga and Bundesliga 2 have established economic foundations on which the two leagues can build their future development. However, it is clear that the massive ramifications of the pandemic will require all clubs to continue to act with financial discipline and foresight.”
German soccer clubs are the exception at the top level of the European game. The outrage over the transformation of SSV Markranstadt into RB Leipzig over a decade ago is because that’s not how it’s supposed to work there. Soccer teams are part of sports clubs under a 50+1 ownership rule designed to make membership the majority owner. By design, it’s club over business model. That decision made back in 1998 changes how the Bundesliga and its clubs make money.
Sure, the biggest teams in the Bundesliga and the league as a whole generate lots of money. €4.5 billion across both divisions in 2019-20. It’s just not what the market might allow if there was an open ownership model. With revenue and finances now the overarching story across world sports, that choice resonates in both directions. A big man inserted “mo money, mo problems” into the lexicon, and it’s worth that reminder that generating revenue in normal times is a different game.
Just before the turn of the century, the Bundesliga chose a model based largely on stability. They did so after getting the reputation as a selling league. The best German players would regularly leave for teams in Serie A and La Liga for bigger contracts than even the top German clubs could offer. It was almost a reward scenario for services rendered, something that’s no longer the case.
The ability of Bundesliga clubs to operate within the 50+1 system is its own specialty subject for the likes of Bayern Munich, Borussia Dortmund, and now RB Leipzig. They make it work, inserting themselves as a market force beside the rest of Europe’s elite. In unique circumstances, the Bundesliga split last season’s Champions League semifinal slots with French clubs. It’s now Ligue 1 with a collapsed TV deal facing the biggest issues among Europe’s major leagues. Add in Barcelona and Real Madrid’s financial problems, and it’s economy that’s potentially reshaping the top level of European soccer.
Playing guess the timeline makes no sense right now. We don’t know when things will change or whether there’s the potential for quickly reverting back to normal. That’s probably more of “a normal.” Enough leagues and their teams around the world are concerned about what that return would look like and the future of live events to suggest a trend. What we don’t know is the story of the last year, with assumptions falling aside as the days added up. Navigating that from a sports business perspective is, as Seifert said, something no one employed by his leagues had as their specialty subject.
What didn’t happen was clubs across Europe hitting the wall coming out of the restart. Plenty of predictions suggested a doom scenario for teams running out of money. In some instances, avoiding that required solidarity payments and support in the form of cash. In others, the game moved on with all involved still in business. The simple response for some was to stop spending money. Schalke 04’s situation started before the pandemic, and the eventual solution was recognizing that they couldn’t afford it anymore. That’s household finances in play, recognizing that continuing to spend is only compounding a fundamental problem.
There’s no doubt that the financial outlook hasn’t improved with a full season played in empty stadiums. The increase in discussions of a Champions League revamp, a separate club-owned alternative, or a true breakaway European super league are all due to that direct line between monetary losses and what clubs want. They are the biggest stakeholders at that level of the game, even if that model is teetering due to the unavoidable realities of the pandemic era. Reevaluating how clubs spend only seems to really take hold when clubs are in trouble. The transfer market, an archaic means of moving players for cash, salary caps, and even some version of that MLS innovation in business plan over clubs called single-entity all end up in the conversation. Normally, very little ends up changing.
Losses always end up relative to scale. For the Deutsche Fussball Liga and its 36 member clubs, that scale is already in place. By design, this is a league more focused on balance than generating wealth. Bayern Munich’s domestic dominance isn’t a feature in that regard. It’s also not necessarily a problem, something that a model focused on its supporters and a specific understanding of club can create. Then and now, that happens at the expense of fully exploiting ways to make money. Then and now, it’s doubtful that will resonate across the rest of European soccer.
J Hutcherson started covering soccer in 1999 and has worked as the general manager of the US National Soccer Team Players Association since 2002. Contact him at jhutcherson@usnstpa.com.
More from J Hutcherson:
- Is European club soccer set for this much change?
- Major League Soccer’s next geography lesson
- Fulham experiences Premier League parity
- European club soccer may have no choice but to change
