The German Football League (DFL) has announced that it has abandoned its plans to negotiate a 1 billion euro investment deal with a private equity partner.
The decision came after widespread fan protests against the proposals which had seen matches in the Bundesliga and Bundesliga 2 (Germany’s top two divisions) increasingly disrupted by supporters throwing tennis balls and other objects onto pitches, causing delays of up to 30 minutes.
“Given current developments, a successful continuation of the process no longer appears possible,” said Hans-Joachim Watzke, DFL supervisory board chairman and Borussia Dortmund CEO, in a statement following an emergency DFL meeting on Wednesday.
“Even though there is a large majority in favor of the economic necessity of a strategic partnership, German professional football is facing an acid test with divisions not only between clubs within the league but also inside the clubs themselves between players, coaches, officials, boards members and fan groups.”
He added that the disputes were taking on such a magnitude that they were compromising “matchday operations, games themselves and the integrity of the competition.”
Bundesliga investor deal collapses after fan protest
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In recent weeks, the issue had broken out far beyond just football, with detailed debates taking place on prime-time German television and political talk shows.
Hailing Wednesday’s decision, fan group Unsere Kurve (“our stands”) said the “comprehensive, but very peaceful and very creative protests were ultimately the key to success.”
Among the first clubs to comment on the collapse of the proposed deal were VfB Stuttgart, whose president Claus Vogt had earlier this month demanded a transparent rerun of the vote on the deal.
“We welcome this understandable decision by the DFL executive board which brings all of us who love football back together,” read a club statement. “Let’s now draw conclusions from recent weeks to create a basis which is as inclusive as possible for the further development of German football. Federations, clubs and fans can only do this together.”
What was the proposed investor deal and why were fans so opposed to it?
German fan groups were opposed both to the deal in question and the manner in which it came about, all of which was underlined by a fundamental rejection of what they perceive to be the over-commercialization of the game.
The DFL deal proposed a “strategic partnership” with private equity firm CVC which would have seen up to 1 billion euros invested in digital marketing measures with the aim of boosting the value of the Bundesliga’s international broadcast rights. In return, the investor would have been entitled to 8% of the revenues generated by those broadcast rights over a 20-year period.
While the DFL insisted the investment was necessary in order to enable German clubs to compete internationally, fans feared that a potential investor would be able to influence aspects of the game such as kick-off times, scheduling them to suit international TV viewers at the expense of stadium-goers.
The deal was initially voted through by 24 of the 36 clubs which make up the DFL in secret ballot on December 11, obtaining the two-thirds majority necessary to hand the executive board a mandate to negotiate and agree a deal with a potential partner.
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However, there was controversy over the ultimately deciding vote cast by the chief executive of second-division side Hannover 96, Martin Kind, who, by process of elimination, is strongly suspected to have voted in favor of the deal despite an explicit directive from his parent club to vote “no.”
This, in the eyes of fans and increasingly also some clubs, constituted an infringement of the so-called 50+1 rule, the DFL regulation which stipulates that the parent clubs – and by extension their members, the fans – must retain 50% of the voting shares plus one share in the outsourced companies which run their professional football operations, thus preventing majority takeovers.
Since then, several clubs had spoken out in support of a motion proposed by Bundesliga club FC Cologne, which called for a final vote on any deal reached with the remaining investor, CVC. The vote was to be transparent and open to ensure adherence to the 50+1 rule and give any deal the necessary legitimacy.
However, it will no longer come to that after the DFL announced on Wednesday that it was discontinuing the process.
Dozens of matches were interrupted by fans throwing tennis balls – or here, chocolate coins – onto the pitchImage: Gerhard Schultheifl/IMAGO
What happens next?
It’s the second serious defeat of this kind for the DFL since May 2023, when a similar proposal was voted down by the clubs, again after widespread fan protests. Then, interim co-CEOs Watzke and Eintracht Frankfurt board member Axel Hellmann resigned to be replaced by current permanent incumbents Marc Lenz and Steffen Merkel, who had driven the new, revamped deal.
The discontinuation of the process also marks a significant victory for German football fans, with the hardcore “Ultras” leading the demonstrations but also typically finding sympathy from others in the stands.
In numerous debates, discussions and statements, fans have often made direct reference to England’s Premier League where, unlike in Germany, match tickets are increasingly expensive and where fans have no enshrined right to participation in their clubs, which are increasingly owned by sovereign wealth funds often seeking to use them for geopolitical gain.
Similarly, German fans highlighted that Saudi Arabia’s Public Investment Fund (PIF), the majority owner of Premier League side Newcastle United, were investors in both Blackstone and CVC, the leading candidates for the Bundesliga investment contract.
CVC already has similar deals in place with La Liga in Spain and Ligue 1 in France. In the case of the latter, the subsidiary company created to manage the sale of the international broadcast rights and in which CVC has invested is under investigation by the authorities.
German football fans, such as these 1860 Munich fans, are highly protective of the 50+1 rule, which they believe safeguards the game against rampant commercialization.Image: Renate Feil/MIS/IMAGO
The future of the 50+1 rule
But the story likely isn’t over yet. The sense of participation and agency which underpinned the fan campaign was founded on the aforementioned 50+1 rule, the future of which remains unclear.
The strongly-held suspicion that Hannover chief executive Martin Kind had been able to ignore a direct instruction from the democratically-elected Hannover parent club in voting in favor of the investor deal revealed that the 50+1 was effectively being circumvented in Hannover.
This has already come to the attention of Germany’s federal competition regulator, the Bundeskartellamt, which had ruled last year that the 50+1 was “unproblematic” with regards to German competition law since it ensured fair, member-led, sporting competition – providing it was effectively enforced at all clubs (albeit with two status-quo-based exemptions for Bayer Leverkusen and VfL Wolfsburg). The apparent inability of Hannover 96 to ensure the effective implementation of 50+1 has led the Bundeskartellamt to reopen its investigation.
The ruling could yet have a knock-on effect with regards to how the Bundeskartellamt views the market restrictions imposed by the 50+1 rule. The fans’ next battle could be just around the corner.
Edited by: Mark Hallam
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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
