There isn’t much that Frank Baumann hasn’t done at Werder Bremen. The former national player came to the club in 1999 as a young defensive talent and later became captain of the 2004 championship team, honorary captain, assistant manager, director of professional football and scouting, and managing director. And even if the 48-year-old retires from operational business this summer, he will remain with the Bundesliga soccer club in an unusual role: as a financier and part of a regional investor alliance.
Eight entrepreneurs and private individuals from the club’s close environment have come together to acquire around 18 percent of the shares in the professional football company Werder Bremen GmbH & Co KGaA for 38 million euros. The four-time German champion wants to use the money to sign young players with a high resale value and to offset the losses that he has accumulated due to the corona crisis and the Bundesliga relegation in 2021.
But that’s just Bremen’s perspective on this model. A week after the failure of the German Football League’s (DFL) planned investor deal, the question also arises as to whether Werder’s way of raising money wouldn’t also be something for other clubs in the Bundesliga and 2nd division.
Sports business expert Stefan Ludwig from the auditing and consulting firm Deloitte also says: Strategic partners with a regional connection and limited say are “a model that is more likely to be accepted by fans. It is more credible and understandable if entrepreneurs and companies from the region participate and provide capital.”
The dilemma of some clubs is: They urgently need capital because, in addition to the high salary costs in professional football, they feel increasing pressure to compete and modernize. At the same time, “investor” is something of a bad word in German football.
Tight guidelines when looking for investors
The 50+1 rule prevents a donor from getting the majority of votes and thus the last word in a club. And for many football fans, it is precisely this limitation of external influences that is sacred. The power they have was recently shown: their weeks-long protest prevented a private equity company from joining the DFL umbrella organization.
One advantage of the Bremen investor model is that it does not violate any requirements and raises fewer concerns. The alliance does not have any influence on day-to-day business; in addition to its minority share, it only receives two of nine supervisory board positions at GmbH & Co KGaA. And since members like Baumann and the building contractor Kurt Zech have long-standing ties to the club, there was hardly any audible protest at recent Werder home games.
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Harm Ohlmeyer is CFO of Adidas, supervisory board member at Werder – and spokesman for the investor group. “We at Werder thought for a long time: What are the examples that we don’t want to follow?” says the 55-year-old. “We didn’t want patronage. We didn’t want anyone who could intervene deeply in the club and take operational action. We have clearly ruled out which countries an investor can come from.”
Werder also examined other options in a lengthy process. “Is there a US investor? Or are there options to go public?” said Ohlmeyer. Investor interest in European football clubs is great, but also strongly profit-oriented. That’s why Werder’s ultimate goal was to “find local partners who are willing to stick to red lines and forego a return. If that is the case, then I can see opportunities for other clubs to replicate this model.”
There are already two comparable cases in paid German football: the Friends of Eintracht Frankfurt AG, which includes several Frankfurt banks. And the East Westphalia Alliance, in which a group of companies support the third division club Arminia Bielefeld. Individual companies or private individuals have a direct stake in other clubs such as Bayern Munich (Adidas, Allianz, Audi), VfB Stuttgart (Porsche, Mercedes, Jako) or HSV (Klaus-Michael Kühne, HanseMerkur).
Don’t just talk about 50+1
Compared to the Werder model, Porsche AG is investing more money (41.5 million euros) in VfB Stuttgart for fewer shares (10.4 percent). According to media reports, after just a few weeks the new investor was engaged in a power struggle with the club over who would be at the head of the supervisory board in the future.
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This is exactly what they want to prevent in Bremen. Nevertheless, both examples show for Ohlmeyer: “There are many opportunities in German football to get capital and further develop a club, even up to the permitted 49.9 percent.”
Shortly after the presentation of the Werder model, the Adidas manager flew to the USA for the Super Bowl, the final of the American football league NFL. His impression is that the 50+1 rule in German football “stands for an attractive culture. For a unique selling point for the Bundesliga. But I think we talk too much about what doesn’t work,” said Ohlmeyer. “We should also talk about professionalism in football. About a good governance structure. That you allow successful business representatives or entrepreneurs to get involved in the clubs.” You can learn that from other leagues. “When I look at the professionalism in the NFL, it’s a different level than we have in German football.”
