ow often have we heard the words “German efficiency” used in remarks so flippant it would seem that Germans were in some way flawed for being almost excessively well-organized, pragmatic and in need of “letting their hair down,” as it were. Instead, Germany has emerged as a solitary pillar of strength in a bleak backdrop of European recession that has witnessed some less efficient economies wishing they had acted with greater honesty and industry.
The same holds for many football clubs across the continent, humbled by alarming mismanagement, dishonesty, and in some cases crippled by the greed and selfishness of multimillionaire owners completely unworthy of enjoying majority possession of clubs.
Glasgow Rangers, a perennial giant in the Scottish game, has been staring into the abyss for months since being dumped into administration by former owner Craig Whyte. Whyte purchased the once-great club for a nominal £1 fee last May, but his only clear policy seems to be that of tax avoidance, while racking up debts reported to be as high as £134 million. The Scottish Football Association recently ruled him as “not a fit and proper person” to run a football club, 12 months too late for the institution whose very existence he has put in severe jeopardy.
Last November, Vladimir Antonov, long-suffering Portsmouth’s fifth owner in two years, received an arrest warrant on suspicion of asset stripping at Snoras Bank, which operates in the Baltic States. The Russian businessman’s subsequent departure from the south coast and continued lack of investment have led to Portsmouth’s second plunge into administration since 2010 and the club’s relegation to the third tier of English football. Who would want to buy such a debt-ridden club now is a mystery.
Owners are constantly breaching the trust placed in them by their respective boards, violating the so-called “fit and proper person tests” applied by league associations that have proved repeatedly incapable of separating the good guys from the bad. One solution might be to abolish majority-ownership altogether, instead introducing Germany’s 50 + 1 rule, whereby a minimum of 51 percent of the club must be owned by its members.
The boards of all German clubs consist of delegates picked by shareholders. This means supporter membership associations directly influence the management of their clubs. The only exceptions are VfL Wolfsburg and Bayer Leverkusen, who belong to holding companies Volkswagen and Bayer, respectively, which founded each of the clubs.
But even the 50 + 1 system has recently come under threat. The guilty party is small-town club TSG Hoffenheim, whose seven promotions en route to the Bundesliga have been bankrolled by software billionaire Dietmar Hopp. Though Hopp, who runs locally-based IT company SAP, owns only 49 percent of Hoffenheim, confidants who manage the club on his behalf say it wouldn’t be able to meet its financial obligations without his significant input.
Hopp’s special authority within the club led to an unfortunate incident in January last year, when Brazilian defender and star player, Luiz Gustavo, was sold to Bayern Munich. No one bothered telling team manager Ralf Rangnick, who resigned as a result. Such a sorry state of affairs had rarely been seen in Germany. In Britain, however, owners continue to make crucial decisions without paying attention to managers or board members.
Newcastle United owner, American tycoon Mike Ashley, incited the wrath of all Geordies in September 2008 after accepting Aston Villa’s bid for key midfielder James Milner. Then-manager and fan favorite Kevin Keegan was not consulted and resigned as a result. A season of turmoil ensued for the northeast club, resulting in relegation to England’s second division.
More recently it emerged that Blackburn Rovers’ heavily criticized Indian owners, Venky’s, completely bypassed the club’s board of directors when making decisions as important as sacking former manager Sam Allardyce and hiring incumbent Steve Kean in December 2010. Kean has presided over the Lancashire club’s relegation from the Premier League amid a torrent of protests from irate supporters.
The German 50 + 1 model would not have allowed previously well-run clubs like Rovers to slip so suddenly into weakness and vulnerability.
German prudence is also strict in terms of club debt levels and limits on player wages, ensuring that spending never exceeds turnover. The rather austere system was not without its critics, as German clubs lost ground to their European rivals both on the pitch and the transfer market. But the tables might be set to turn back in their favor once UEFA’s financial fair play rules come into effect in the 2013-14 season (European clubs will be required to break even based on information provided this season and next).
Clubs failing to comply with the new rules risk disqualification from UEFA competitions, the money-spinning Champions League included. Only time will tell if the effort will improve the overall health of football. For now, Germany’s model stands out as the most efficient way for ridding the beautiful game of its shameful villains.