West Germany coach Sepp Herberger once famously summed up football’s core appeal. “People go to the stadium because they don’t know how the game will turn out,” the 1954 World Cup winner said.
For decades, this has essentially rung true. In 2020 though, things are doubly different. People can’t go to the stadiums but they do know how the game will turn out: it ends with Bayern Munich winning. Always.
The Bavarians secured an eighth consecutive title in 2019-20, their 29th championship in 51 years. Their 4-2 win over Bayer Leverkusen then delivered a 20th DFB Pokal win, their 11th this century.
Bayern deserve praise for their voracious appetite and mostly excellent use of their considerable resources. But as 11 Freunde contributor and Steilcast pod regular Christoph Biermann put it so succinctly, their dominance is a sure-tell sign of “a broken league”.
How did it come to this?
With an annual income of ?670 million in 2018-19, Bayern have become simply too big to fail, or, if you want, the competition are just too meek to take advantage. Even appointing the wrong manager in Niko Kovac and playing 16 months of largely dysfunctional football wasn’t sufficiently bad enough to miss out on domestic silverware.
The Bundesliga behemoth’s sporting hegemony is a direct result of their relative financial might. They made ?233 million more than their nearest rivals Borussia Dortmund (?437 million turnover) last season, ?429 million more than third-placed RB Leipzig (?241 million) and ?480 million more than Borussia Monchengladbach (?190 million) who finished in fourth in 2019-20. Augsburg, last season’s lowest-placed survivors in 15th spot, are a whopping ?578 million worse off.
The imbalance is clear to see but ways out of this lopsided state of affairs are much harder to find. Possible solutions fall into two categories — you can either attempt to level down, curtailing Bayern’s advantage, or level up, by generating more money for the teams below. Neither are anything like straightforward.
So how do you plug the gap?
One way, without addressing the thorny issue of money itself, would be to render the bigger mismatches meaningless and shift the focus on to games between sides that are more evenly matched. You could do so by introducing play-offs. Michael Reschke, now technical director at Schalke, mooted the idea a couple of years ago as a means of adding more excitement to the title race.
A best-of-five series between Bayern and Dortmund in late May would certainly be entertaining but it would also dramatically diminish the appeal of the regular season and pose the big logistical problem of fitting in the extra games, unless the number of teams in the league was reduced.
Play-offs also wouldn’t change the basic fact that Bayern are huge favourites to win the league against sides with two-thirds or a third of their income, at best. The change to the structure of the competition would be drastic; the real benefit in terms competitiveness doubtful.
What about salary caps or a luxury tax?
Salary caps would require a change of European law and near-global adoption in order not to put Bundesliga clubs at a unique disadvantage. But even if those hurdles could be overcome, there’s a good chance that wealthy clubs would no doubt still find “creative” ways of paying top money to their best players, via sponsorships from related companies or a very generous bonus structure, to name but the legal methods.
A luxury tax? You could tax Bayern, say, on any wages beyond ?180 million and redistribute the money to the other teams. To go by this year’s figures, that would result in ?120 million of extra income for the rest of the league. Dortmund would be taxed ?4.5 million themselves.
Redistributing income directly from the top earners to the needier would be a very popular move — taking money from the rich to give it to the poor always is — but just like a salary cap, it would require a European-wide adoption to pass the tests of legality and fairness. Bayern can’t be the only club in the Champions League to lose a sixth of their income in that way. It wouldn’t be in the league’s interest, either.
Why would penalising Bayern financially hinder the Bundesliga as a whole?
“Munich’s monopolisation of trophies does have a chilling effect on the Bundesliga’s international TV rights and will also be detrimental on national TV rights in the medium term,” industry expert Kay Dammholz, of Sass Media, explains but hobbling Bayern financially would still do more harm than good to the league as a whole. In order to understand why that’s the case, it’s necessary to look at the reasons why people abroad watch German football.
An unpublished study by the league into the appeal of foreign competitions to global audiences found that the number one reason to tune in were “clubs and superstars” — in other words, recognisable brands. “Quality of football”, as measured by the teams’ performances in European competition, comes second, and an “exciting championship” is third. Much to the Bundesliga’s frustration, “match ambience” (fans, stadiums) sits only in fourth.
If you consider that their domestic market is largely saturated — attendance is, under normal conditions, high and TV rights are stable — then any substantial growth will have to come from internationalisation. Taking the top club (and Dortmund) down a peg is, therefore, the last thing the league wants to do.
“We don’t win by making Bayern smaller,” a Bundesliga official tells The Athletic. “They, along with Dortmund, are the main drivers of international engagement. There are other interesting stories — like the first-ever Berlin derby between Hertha and Union in the top flight — and we do well in certain markets such as the US and Japan because we have many of their players but it still comes down to the big clubs, how they do well in the Champions League.” Increased domestic competitiveness would certainly be good for the “product” but it must not come at the cost of hurting the top sides.
Recent history is very instructive in that regard. In the noughties, Bayern’s dominance had not yet reached today’s totalitarian level. Surprises were still possible. In the seven years between 2002 and 2009, the Bundesliga had six different champions in Bayern, Dortmund, Werder Bremen, VfB Stuttgart and VfL Wolfsburg.
Unfortunately, nobody outside Germany paid much attention, as the “cheap and cheerful” (The Guardian) league was considered poor in sporting terms and bereft of stars with international visibility. International TV rights brought in only ?9-?18 million annually, a measly fraction of the ?230 million the Premier League was raking in from foreign channels at the time.
Today, there’s far less mobility at the top but more people than ever are watching because they recognise Bayern and Dortmund as sides of international stature or want to watch their native players. The Bundesliga’s annual income from international TV rights is currently worth ?224 million, roughly a fifth of the Premier League’s. Growth has come on the back of Bayern’s reemergence as a European superpower and Dortmund’s ascent to the number two position, not despite it. “What we need are more Bayerns and Dortmunds: clubs good enough to compete in Europe and attract global audiences,” the league official says.
So the Bundesliga needs more outside investment, then?
German fans don’t think along those lines. They would love their clubs to be as wealthy and powerful as Bayern, of course, but they’re not prepared to accept the external investment that could make that happen rather quickly. The Bundesliga’s fabled “50+1” rule — a stipulation that the majority of a club’s voting shares must remain with the supporters — acts as an effective bar to takeovers by individuals or companies. Growth must be organic, with clubs generating their own income.
Borussia Monchengladbach’s comeback as a force in German football shows that it can be done but the speed of progress is glacial by international comparison and the pitfalls are plentiful. Two or three wrong coaching appointments coupled with a few misguided big transfers and you’re back to square one — or worse. Just ask VfB Stuttgart, Werder Bremen or Hamburger SV.
There are exceptions. Wolfsburg and Bayer Leverkusen are owned by corporations for historic reasons, Hoffenheim have a benefactor in billionaire Dietmar Hopp, RB Leipzig are controlled by Red Bull and Hertha BSC will see a ?335 million investment by financier Lars Windhorst in return for 66 per cent of the club’s subsidiary company that encompasses the senior football team.
But the overwhelming majority of fans of traditional powerhouses such as Hamburg(now in Bundesliga 2), Stuttgart, Schalke or Bremen still abhor the idea of selling to an oligarch or local sugar daddy, even if it meant overnight elite status, a la Manchester City. They want to stick with the democratic control structures. Keeping it their club is much more important to them than silverware.
“When a club is sold, it loses part of its soul and identity,” says Jan-Henrik Gruszecki, a fan-activist who is working on a number of reform proposals with supporters’ group Unsere Kurve. “It’s like having a really good friend you’ve stuck with through good and bad times suddenly winning the lottery and becoming a completely different person, and no longer interested in you.”
But how else can clubs make more money if an oligarch isn’t going to come along and help?
As long as those purist sentiments persist, so will the dynamic that sees Bayern and Dortmund grow further apart from the field. One of the unintended side effects of the 50+1 rule is that it forces clubs to maximise commercial income. In order not to sell themselves, they must flog everything else, by way of merchandising or sponsorship. But not everybody can.
“The exponential growth of commercial income for the elite teams has been the real differentiator in recent years, more so than TV money,” says Yannick Ramcke, founder of the well-respected Off The Field Business blog and business development manager at onefootball.com. Bayern, for example, made ?175 million from sponsorship and marketing activities last season, close to three times the money they received from the Bundesliga’s national television rights, ?60 million.
Due to the relatively low value of domestic rights (?1 billion per year, 20 per cent of which is passed on to Bundesliga 2), Champions League money acts to distort the competitive balance even further. Bayern received ?73 million from UEFA last year, despite exiting at the last-16 stage. The Bundesliga could lobby UEFA to pay out revenue more evenly among participating leagues but due to the top teams’ position of power, it’s a no-starter. Europe’s elite are forever pressuring the federation into maximising income for them, dangling the sword of a super league without UEFA’s involvement over their heads.
So no more money from UEFA. What about addressing the imbalance in domestic TV revenue?
This would seem a more promising avenue. Unlike the Premier League, the Bundesliga does not publish the exact breakdown of payouts to clubs, which is in itself rather indicative of some pretty damning inequity. Kicker magazine and others are forced to calculate the numbers themselves every year, taking into account a complex system that weighs historic achievements. For this season, the domestic breakdown works out at ?60 million for Bayern and ?23 million for 18th-placed Paderborn. Broadcast rebates and loss of income from COVID-19 excluded, this is a ratio of 1:2.5.
Once you add the money received from international TV rights, however, things get totally out of kilter. Instead of distributing the ?224 million evenly among its 18 members, the Bundesliga’s weighted system favours the biggest sides to an extent that feels unconscionable. Bayern received ?40 million from the foreign rights pot, Dortmund ?28 million, but Paderborn only ?2.7 million. The net effect is that the overall ratio stretches to 1:4.
“It used to be 1:2.3, 10 years ago,” Mainz board member Jan Lehmann told Sponsors magazine. “Clubs like ours don’t demand radical change but a return to the proven way things worked in the past.”
An even distribution of international money would provide just around ?12.5 million for each club and see Bayern and Dortmund lose out on ?28 million and ?16 million respectively: not enough to seriously hamper their chances in Europe. There’s no good reason not do that, even if the overall dynamic won’t be too much affected.
What’s the nuclear option?
If the Bundesliga is to hold on to its traditional club structures and increase competitiveness without clipping Bayern’s and Dortmund’s wings too much, there’s only one drastic option as long as TV revenue is static: the number of clubs in the Bundesliga has to be smaller.
Reducing the league to, say 14 teams, would pit more evenly-matched teams against each other in more meaningful games. Sticking with ?100 million for the team finishing in first place would increase the average sum for other sides from the current ?52 million to ?70 million — a huge jump of 34 per cent that would help with domestic, as well as international competitiveness.
That’s if German broadcasters are prepared to pay out the same money without the four worst teams being a part of the league any longer. In the season just gone, that would have meant doing without Paderborn, Fortuna Dusseldorf, Werder Bremen and Mainz.
Ramcke believes the value of rights wouldn’t be overly affected in a negative sense. “The biggest sides are the by far the most important drivers of revenue, whereas the production of the smaller sides’ live games is more a burden to broadcasters than an asset,” he says, adding that the Champions League has shown that scarcity and relevance, combined with much higher quality games, can offset the reduction of games available for rights holders.
Four fewer home matches would mean less income from gate receipts, to be sure. But those losses, up to ?3.5 million per game per team, are mostly offset by the increase in TV revenue. In addition, freeing up eight kick-off slots in the calendar could be used to move more rounds of the Champions League to a more lucrative weekend schedule, help Bundesliga teams grow their brands during off-season trips abroad, see the introduction of two-legged DFB Pokal fixtures or even that of a league cup that would generate additional income for Bundesliga 2 and third-division sides.
Europe’s biggest country reducing the number of teams in its top league does appear counter-intuitive and will be guaranteed to face stiff resistance from sides worrying about relegation and their chances of promotion from Bundesliga 2. Gruszecki disagrees with the notion, unsurprisingly. “We shouldn’t think about reducing the league but work towards making an 18-team league more competitive.”
But increasing the concentration of wealth in the upper-middle really is the most logical way of countering the concentration of wealth at the top without allowing for billionaire takeovers or harming the chances of German clubs to be competitive in Europe, which is so vital for the league’s international standing.
If Bayern aren’t to win the next nine leagues in a row, the only chance is to strengthen the sides best-placed to thwart them.
