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The German Bundesliga has turned into the breeding grounds of the world champions, and the process has been mesmerizing

Debjit Lahiri

"Football is like chess, only without the dice."

It should seem rather normal to start off a serious article with a relevant quote. However, that is only until you realize that the game of chess does not really have the use of a dice.

Well, this paradoxical statement which apparently transcends the boundaries of common logic features in a 2008 article on Spiegel called the "German Football's Greatest Sayings" and is attributed to German international Lukas Podolski. They had a particularly hilarious take on this quote stating that the former Arsenal man might have been "channelling Yogi Berra when he came up with this instant classic from the 'like a fish needs a bicycle' school".

A little more research on it – however – would go on to reveal that Podolski might not have defied human rationale after all. A case of mistaken identity perhaps – as this article would disclose. Therein Bohmermann, a comedian who is known to have impersonated the football star on numerous occasions on a weekly radio show, had actually coined this phrase; but as fate would have it, this went on to be held as a real Podolski quote by several renowned and otherwise credible media outlets!

So, there's your trivia for tonight.

"That's alright" – you'd probably say. "But what was the point in all of this?"

Well now, as you would go on to see, this above reference was not completely random. Despite the factual anomalies in the statement itself, this is perhaps the closest analogy I've encountered about German football – something that captures the very essence of the game in the country. German football is indeed like a game of chess – calculated, measured, tactical and mostly executed with ruthless efficiency. In fact, one can argue that these are the very traits that have always defined the German mentality and have propelled them to resounding success on the world stage.

Yet, this is not something that has only been confined within the footballing fraternity of the country itself. Germany's meticulous revival and subsequent growth time and again in crucial spheres of life – be it technologically or economically – despite encountering major historical setbacks speaks volumes of the German efficiency and tenacity.

However, that is something to debate and analyse for another day. Coming back to football, their measured and calculated form of play on the pitch, which has yielded enormous success over the years, is certainly not something that has come out of the blue. This has culminated because of a similarly efficient and sustainable off-field financial system that has supported the very core of German football.

The German league – the Bundesliga – structure is backed up by a very healthy business model – one that has seen them notch up an aggregate revenue of nearly 2.62 billion Euros in 2016, according to the latest official report from the Bundesliga. What strikes out particularly from the report is that 17 out of the 18 clubs operated on profit – a trend that has been following for the last few years now and one that is in stark contrast to the state of the clubs in the English Premier League. Only back in 2013, all but only 3 top division English clubs, had their numbers in negative.

However, what begs for an answer is this: how exactly have they managed to achieve such a profitable and at the same time an incredibly stable working model?

Well, football, as we all know, is a game that can assure the maximum loyalty. Football's tryst with its evergreen set of supporters and fans has always been a story of romanticism and rich emotion. And that is where the Bundesliga has successfully cashed in. Germany's seemingly super sophisticated and sustainable business model is actually something that revolves around an invaluable asset of the game that often tends to go unnoticed – the fans.

Ticket prices in Germany are nominal – a tool that is being used to drive up and create a support base from the community itself. On an average, a Bundesliga game can be witnessed at a price as low as 23 Euros.

The results are astounding.

Despite the glitz and glamour of the English Premier League, the Bundesliga managed to have an average attendance of 43,300 per game in 2015/16, which is around 7000 more than what the Premier League recorded in the same season (36,452) . The star-studded La Liga lagged further behind as they were left on a disappointing number of 27,775.

In an interview with The Guardian in 2014, the Bundesliga chief executive Christian Seifert reaffirmed this very stance as he explained that the clubs were indeed willing to sacrifice their match-day ticket revenue if it meant they can bring together "finances, the game, and the society."

In a couple of my brief interactions with FC Schalke 04 – one of the most prominent clubs in Bundesliga and a regular name in European competitions over the past few years – the club went on to confirm the same. Dr. Anje Kleine-Wilde, the club’s head of corporate communications, cited the core values of Schalke’s mission statement which states their intention to bring people together from all social backgrounds.

Schalke 04

"Since we began as a colliers' and grafters' club, we made an decision to enable all our supporters from all social backgrounds to participate in the life of the club and attend matches. Our tradition is of a miners’ club and we acknowledge our social responsibility.”

“Everyone who is associated with the club – be it the employees or the members or the fans – share a common passion for the game and FC Schalke and that is what unites us. Our identity consists of sharing collective joy and collective pain. Every one of us gives the best for the club and we stand by it both in the good times and bad.

Each of our home matches during a season is sold out with 61,076 fans - each of them is an important part of our success. And all this explains our lower ticket prices.”

The theme was more or less the same at Borussia Dortmund – arguably one of the top two teams in Germany along with giants Bayern Munich – when I contacted the club hierarchy. The club CEO Hans-Joachim Watzke remarked that ticket prices will stay the way it is and it represents their contribution to their footballing culture.

“Ticket prices are the greatest good for us and our fans as well. We do not intend to raise them, not even by inflation rate. Dortmund LogoThis is our contribution in keeping the balance between our home Dortmund and global growth.

“We want to grow as a club, grow globally, but at the same time we are proud of having 28000 stands in our stadium, which we continue to offer at lowest possible prices. This is our contribution to football culture and will never change.”

The trend seemed to continue at the home of one of Germany’s eternal powerhouses - Bayer 04 Leverkusen. Speaking exclusively to us, they reiterated their own stance towards the fans of their clubs.

“The so called community engagement is a base of German football and an outstanding value. The relations between fans and clubs are usually very intensive; clubs are very interested in taking care that these circumstances are improved year for year. We think that the special relationship between the clubs and the fans lead to a special reception of Bundesliga in other countries, your question confirms this in a way.

“The atmosphere is unique in mostly sold out German stadiums, not only in Bundesliga but also in the second league. Especially in Leverkusen we tried to underline the importance of the fan-club-relationship in setting up a special director in our management leaderboard who is responsible just for improving this relationship, to communicate with our supporters, to bind them. There are many opportunities to work with our supporters and we try to do this day for day.”

“After all, this could be the reason for the outstanding engagement of football supporters for their clubs. And in the end, people on the tv-screens worldwide can watch fascinating pictures of Bundesliga, of sold-out stands. The main reason for this is a moderate price policy. If people can’t pay football any longer, they will not enter the stadiums.”

Hannover 96, two-time German champions but currently plying their trade in the second tier of German football, resonated identical views on their approach towards their fans.

Christian Bönig, the head of media and communications in Hannover 96, went on to describe the fans as the most important asset of the game in Germany – something that has, sadly, not been recognized at any other top leagues in the world.

“The people in the stadia are the heart of the clubs. Without fans the football in Germany makes no sense. Therefore, the fans are the most important asset. So we try to get in the arenas a mood, which is unique to the world.”

Well, this “fan-centric” approach of the Bundesliga clubs might well have far-reaching implications on the footballing dimensions of the country. As you could probably infer by now, the football clubs should clearly be able to pull the population more towards football, given their courteous outlook towards their supporters. With clubs caring more about the fans, the fans themselves will eventually start feeling as part of the ‘family’.

Invariably with time and with a growing interest towards the game, aided by such continued close association between the clubs and the fans, it is very much possible that young families might be encouraged into thinking football as a viable career option for their kids – where they can emulate their local club heroes. And thus, as a result, the clubs should probably be getting more entries into their academies, and which in turn should increase the possibility of finding more ‘potential’ professional players for their respective clubs since they will have a larger pool to work with in the first place.

Yes, this is perhaps applicable for all countries where football enjoys a ‘religion’ status, but a little more caring hand from the clubs – who has significant potential to influence the local masses – should, in all certainty, accelerate the process. Therefore, what appears to be a move that causes significant cut-down in the club revenue, the lower ticket prices paves the way for the preservation of bonds within the community, maintaining an electrifying atmosphere in stadiums and ultimately leading to the overall development of the game in the country.

Now while the above mentioned possible chain of events might be increasing the pool of football aspirants in number, it is Germany’s subsequent management of this available youth resource that goes a long way in maintaining the financial stability of the clubs – something that has been discussed later in the article.

NICE, FRANCE - JUNE 27: l-r Jamie Vardy, Gary Cahill, Marcus Rashford, Joe Hart and Dele Alli of England show their disappointment after defeat during the UEFA Euro 2016 Round of 16 match between England and Iceland at Allianz Riviera Stadium on June 27, 2016 in Nice, France.  (Photo by Laurence Griffiths/Getty Images)
This has become all too familiar sight for English fans, and one has to wonder if a Bundesliga-like revolution is needed

Well then, if this is something that ensures the growth of the game in the country, why can't other countries such as England simply follow suit? That is because they can't afford to.

As a matter of fact, the English and the Spanish clubs have a significantly higher wage structure than their German counterparts. Liam Smith, an aspiring lawyer from Leeds, observes in his article analysing the German football model that - "Their pragmatic approach to football governance and finance means Bundesliga spend only 51% of their revenue on wages whereas Premier League clubs spend 70% of their revenue on wages."

Hence, with growing expenditure, it is impossible for them to cut down on their income revenue and "risk" on the hope that this might encourage more long-term community involvement. Ticket revenues still continue to constitute the second largest source of income for English clubs after TV revenue. To put things into perspective, English giants Manchester United earn about 38 million Euros more than what Bayern Munich earns from ticket sales in a year.

Now that brings out yet another question. How can the German clubs maintain a lower wage structure when player wages in other leagues are sky-rocketing?

Well, that is down to their unique club ownership rule of "50%+1". According to this rule, an investor or a benefactor cannot own more than 49% stake in a club. This ensures that the controlling stake always remains with the club and its fans, and thus stops any multi-billionaire, driven by ego or vested interest, to "artificially" pump in a large amount of money and ultimately make the club spend more than they should have. Therefore, Bundesliga will always have a controlled check on the initial investment on new players and their subsequent wages.

Now, the investor or the single benefactor model has its perks too, as evidenced in the case of Chelsea and Manchester City in England or perhaps Paris Saint-Germain in France, who have had brilliant transformations since billionaire takeovers. However, it could also prove quite fatal.

I caught up with German based noted football journalist Arunava Chaudhuri and he was quick to point out that very fact.

Arunava Chaudri "You mention Chelsea, PSG and Man City; but these positive examples are rather exceptions than what happened to Portsmouth or Leeds United. And for that matter, you can look at Aston Villa or Newcastle United from last season, where large investments have taken these traditional clubs down into the Championship."

Indeed, such takeovers and massive investments have often failed to live up to its promise. There have been quite a few instances where subsequent mismanagement has eventually led to disastrous results. In Spain, Racing Santander faced a similar predicament.

A mere 5 years since the club was taken over by Indian business tycoon Ahsan Ali Syed in 2011, Racing Santander now finds themselves in the third tier of Spanish football and has suffered a financial and institutional crisis. Prior to that, the club had successfully completed a decade in the Spanish top division.

Arunava further adds that the "50%+1" rule has not only stabilised the top hierarchy of German football but its merits have had far-reaching effects than what just meets the eye.

"I think that the 50%+1 vote rule has helped German football over the years as it not only created a strong top tier Bundesliga, but a robust overall club football structure in Germany. Surely in Germany as across Europe, the top clubs who play UEFA Champions League regularly have moved away from the rest of the clubs due their extra income, but then you still have clubs like Darmstadt 98, SC Paderborn or Eintracht Braunschweig who can make it from the third/fourth division into the Bundesliga without large scale investments and are given a level playing field without big investors in the background.

“A Darmstadt staying in the Bundesliga is an even bigger upset than Leicester City winning the EPL title. Leicester has transformed over the last few years into a club with potential due to a new stadium, investments into the team and a seasoned manager. Darmstadt, on the other hand, were lucky to stay in the third division (3.Liga) few seasons ago with another club failing the club licensing.

“They went on to gain successive promotion into the Bundesliga and sensationally stayed in the league. Their budget two years ago in the 3.Liga was lower than some of the Indian Super League franchises, just to put things into perspective!

“Such fairy tales are becoming more and more difficult, even in Germany, but they are possible through the robust financial system which allows even smaller teams to sustain themselves. Problems with an investor - of him having financial problems or losing interest - might mean disaster for such football clubs."

Raphael Honigstein, a renowned German journalist, and author termed the debate on the "50%+1" rule as a controversial topic when I reached out to him. However, he was quick to highlight its merit.

"The 50+1 rule obviously restricts investment. The Saudi Sheikhs or the Russians surely wouldn't prefer to be minority stakeholders. This prevents instant greatness. However, this also ensures stability. It prevents clubs from going bust – like in the case of Portsmouth or Leicester. Anything that is organic – understandably – takes a longer time to grow but there are several benefits along the way."

However, if the financial structure is controlled in the way it is in Germany, do the German clubs lose out on attracting big name star signings and an overall global appeal? Well yes!

But while the Bundesliga still fails to match the brand potential of the English Premier League or for that matter the Spanish La Liga – just on footballing terms - it hasn't affected them much at all. Clubs from Germany have been consistently among the top performers in Europe and have often been overachieving than their English counterparts. The national team, as well all know, are the reigning world champions.So, in a nutshell, Germany is cutting down largely on their ticket revenues to build community engagement; spending way less on superstar signings and player wages and yet somehow is able to compete with the very best. While it may seem as yet another paradox, the outcome is hardly surprising. Arunava explains exactly why -

"Germany has the best youth development system through their youth development centres (NLZ, Nachwuchsleistungszentrum). You therefore have a steady flow of young talent into the league, besides some of Europe's best young players deciding to join the Bundesliga like Renato Sanches (Bayern Munich) or Ousmane Dembele (Borussia Dortmund) rather than going to the EPL or La Liga.

“The quality in the Bundesliga is the highest amongst the top leagues of Europe, only that one would say the names aren't always the biggest."

Well, that is true. While Germany had a minimal number of football academies across the country during their Euro 2000 debacle, that number has considerably increased since then. All their 36 clubs in the top two divisions are running a flourishing academy of their own and the steady influx of quality homegrown talent in the first team as a result of this has helped the clubs in maintaining their financial health and at the same time has catalyzed their footballing success.

Further, the onus for youth development was not simply left to the individual clubs – the German Football association (DFB) themselves introduced their talent development programme in 2003, aiming to identify and then train young players with tactical and specialized knowledge. This proved to be a common platform for local as well as players affiliated with different professional clubs to work and enhance their existing footballing skills. The long-term results were inevitably a “success story” for the German clubs and the national team alike.

RIO DE JANEIRO, BRAZIL - JULY 13:  Mario Goetze of Germany scores his team's first goal past Sergio Romero of Argentina in extra time during the 2014 FIFA World Cup Brazil Final match between Germany and Argentina at Maracana on July 13, 2014 in Rio de Janeiro, Brazil.  (Photo by Matthias Hangst/Getty Images)
Mario Goetze – Scorer of the winning goal of Germany’s 2014 World cup triumph was one of the many talents brought up by Germany’s efficient youth resource management

Hence, now you would probably be able to connect the dots and relate to Germany’s efficient management of youth resource that I was talking about earlier in the article – one that has helped German clubs to maintain a stable balance in their financial ecosystem without compromising on the footballing quality.

The fact that German football remains short in terms of global appeal is more down to the fact that – as Arunava points out – Bundesliga still remains an "inward looking market" where the clubs care more about their "own" fans than those far away.

That is again indeed true as Bundesliga broadcasts every single league game in Germany and in the process earns an enormous revenue of 485 million Euros per year. However, when it comes to global broadcasting, the Bundesliga has lagged considerably behind. Until recently, Bundesliga was shown on GolTV and Neo Sports in the United States and India respectively – arguably two of the biggest market for an international football audience.

Both the channels are far from being the dominant player in their respective countries and thus evidently, Bundesliga failed to have the far-reaching effect of the English Premier League or the Spanish La Liga – both of which were broadcasted via more popular channels. However, Fox Sports in US and STAR SPORTS in India have since bought the rights for broadcasting the league and they are expected to have a positive impact.

But despite the recent change in stance, Bundesliga still has miles to go before it can match the brand prowess of the English Premier League – unanimously the most watched league in the world.

I happened to catch up with Rory Smith, football writer for The Times and ESPN and he felt it was the "language" advantage that gives Premier League an edge over the Bundesliga, despite the fact that footballing wise there is not much difference.

"In terms of the EPL in general, I think the advantage it has is the language. The standard of football in England, Germany, Spain and Italy is, as a rule, pretty similar: some would say the PL is better, some the Bundesliga, some Spain, depending on what you like. The best players are in Spain. Bayern and Dortmund are as good as the top two in England.

“The EPL is a better-presented package, and that matters, and it is the first truly global league, which means others have to do more to catch up. But the really important thing is the language: the EPL is conducted in English, which makes it easier to access in America, Australia and, crucially, in Asia, where people are far more familiar with English than, say, German.

“That makes it more accessible, and therefore more popular, and that is something no other league can overturn."

Honigstein agreed to this very fact and further brought out some very interesting points regarding this matter.

"Extensive marketing is certainly lacking in Germany. The language barrier is also a crucial factor. However, clubs in Germany are trying to overcome that. Recently, Bayern Munich conducted their team presentation in English – something that astonished most of us. But it is a sign that the clubs are slowly trying to reach out to a larger audience.

“Further, unlike the English or the Spanish, Germany never had any colonial ties with far away countries. This means that they do not have any historical cultural ties with nations in other continent – which makes it more difficult engage foreign interest."

"Incidentally, also because Germany does not have a benefactor model with foreign ownership of clubs, they sometimes might lose out on some of the foreign support. For an instance, the people of Abu Dhabi might feel a connection with Manchester City, since the club's owner belongs from that part of the world, or for that matter, the Russians might be interested in Chelsea or similarly the Americans might be drawn towards the likes of Liverpool, Arsenal or Manchester United.

“Things are changing in Germany and there are certainly attempts to bridge the gap between the clubs and the foreign audience. But the Premier League has nearly a 40 year headstart."

Renowned sports broadcaster and the lead anchor for the Premier League's international content service, John Dykes, also echoed a similar thought when I got in touch with him. He reserved some credit for the marketing done by the individual clubs as well, which left the Premier League ahead of the others, in terms of mere popularity.

John Dykes

"As for global appeal of the Premier League, I think you have to separate the individual marketing successes of the clubs - some of the biggest in the world are from the Premier League - from the league itself. Also, given the established strength of the Premier League in terms of global broadcasting/streaming, any league that kicks off at the same time is going to struggle to compete."

However, some at Germany also believe that the “inward looking market” has a unique advantage as well – as was evidenced in the statement of Bayer Leverkusen earlier. The fact that the Bundesliga clubs have developed an incredible bond with their local fans often intrigues football followers worldwide and attracts global eyeballs. The club pointed out that a writer, all the way from India, asking a question about the atmosphere in stadiums in Germany is a testament to this very fact. On second thoughts, that is indeed a valid argument.

Incidentally, despite their general lack of extensive marketing outside the continent, it is probably worth noting that Bayern Munich were among the very first high-profile foreign clubs to touch the shores of India. They've been frequent visitors to the subcontinent in the past decade and earned a massive vote of confidence when they fielded a near full strength side against an India XI in a testimonial match for the retiring Indian captain Bhaichung Bhutia in 2012.

In fact, legendary Bayern goalkeeper Oliver Kahn also happened to play his final match in Bayern colours against iconic Indian club Mohun Bagan in May 2008 . This year, Borussia Dortmund has further reinstated Germany's presence in Asia by starting off their pre-season campaign in China.

Bayern's gesture for the farewell of the legendary Indian captain was appreciated widely

The Germans clubs, interestingly, have further figured out other unconventional ways to generate revenue, in order to make up lost ground for their lacking global appeal. For an instance, a large percentage of their revenues come from various corporate partnerships. FC Schalke 04 are once again one of the front-runners in this regard and have set a positive example for clubs both home and abroad – something that has made them stand 7th in the world, in terms of operating income for a football club.

Quite recently in 2015, VFL Wolfsburg entered into one such partnership with Indian software giant Tech Mahindra. Further, Bundesliga clubs have been pretty open about selling their stadium naming rights to other private organizations, thus opening up a whole new source of revenue generation for the clubs. In 2013/14 season, 15 Bundesliga clubs benefited from this, with the highest earners being Bayern Munich (Allianz Arena - 6 million Euros/year) , Schalke(Veltins Arena - 5.5 million Euros/year) and Borussia Dortmund (Signal Iduna Park - 4.7 million Euros/year).

However, the English clubs, on the other hand, have at times 'appeared' rather reluctant to look at football from a modern outlook and have sporadically shown resistance to change. The importance of tradition and culture have often come in the way, as evidenced in the case of Newcastle United, where fans were quite vocal against renaming St James' Park to Sports Direct Arena.

Honigstein, however, believes stadium naming comes from necessity in Germany, rather than a particular set of fans having a more modern outlook than others.

"The Bundesliga has far less investment from foreign shores and even lesser income from ticket prices. This means the clubs are forced to innovate and find different revenue sources. Further, many of the stadiums were built before the 2006 world cup. Hence, they do not have rich tradition associated with them.

“Hence, fans lack the similar emotional attachment with them, as it might be the case in England. Selling stadium naming rights, thus, appears to be a very good option from the commercial point of view."

Smith conveyed his support to this very school of thought as he opined on the reasons why stadium naming is 'relatively unusual' in England, unlike in Germany.

"I think the issue with naming rights is more about opportunity. Fans in England have not proved so resistant to newly-built grounds having corporate names and, in some cases, they have actually caught on quite well (the Emirates and the Etihad in particular). The problems have more occurred with renaming traditional grounds. That has happened in Germany, too, where I think there was a lot of resistance, for example, at Borussia Dortmund initially.

“That said, I think there are two key differences: one is that, because of the 2006 World Cup, there are a lot of new grounds in Germany; it is not so strange to have naming rights, whereas in England it is still relatively unusual. The second, and more important, is that fans in Germany still feel connected to their clubs and, because ticket prices are limited, they understand that teams must seek other sources of revenue.

“In England, that is not the case: if Liverpool, say, were to sell naming rights to Anfield, fans would resist because it would be in addition to charging huge sums of money for tickets, not instead of."

Now, since it's been a long article with scattered details, I would, at this point of time, like to sum things up and try to extinguish any false notion that might have cropped up among the readers by now.

Yes indeed, despite their structured financial model, Bundesliga clubs are actually at no point earning more than their English counterparts. In fact, with the new Premier League television deal kicking in, the English clubs shall be light years ahead than the German clubs in terms of mere income. Well then, what is this so-called "efficiency of the German financial model" that we were talking about all this while?

Well, the question of efficiency of the model kicks in, in the way the German and the English clubs are in fact "spending" their income and at the same time sustaining footballing success. And that is where their robust financial structure is making the Bundesliga a more profitable organization, unlike the debt-ridden English Premier League.

In fact, such is the regulation and governance of the league, that every club in the Bundesliga is evaluated on their financial competence before every season; failing which; the clubs are denied from participating in the league. This ensures the clubs are obligated to be more careful and not go wayward with their economic management.

The mantra at Germany is pretty clear and it follows a very basic principle of "not spending more than you have".

Former English international and noted television personality Gary Lineker had once said - "Football is a simple game. Twenty-two men chase a ball for 90 minutes and at the end, the Germans always win." Well, he was perhaps right. But the story of German success is not only confined to the boundaries of the football pitch – they are clearly winning off it as well; they are winning the "battle of the finances”!

Edited by Staff Editor

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