It felt less like the cultured passing of a baton and much more like the ripping of football's figurative staff from the very bosom of its spiritual home for the past five years, an act executed with the force and brutality of a seriously aggrieved party.
By full-time in Tuesday night’s Champions League semi-final, Bayern Munich had so completely demolished Barcelona’s aura, exposing the limitations of their tippy-tappy football, that the Spanish side slumped off the Allianz Arena pitch looking like a team that knew the game was up. Cue Teutonic celebrations, led, improbably, by a ‘continental’ version of Tony Christie’s Is This The way To Amarillo.
Musical taste aside, German club football appears to be getting things absolutely right, on and off the pitch.
READ MORE: {}
Underpinning the nation’s playing success (Wembley could conceivably host an all-German Champions League final next month), is a system of financial vigilance first introduced 50 years ago. When the Bundesliga was formed in 1963, all participating clubs signed up to a licensing system sanctioned by the German FA (DFL), which is still rigidly adhered to today.
English football authorities may like to take note of the licence’s unequivocal wording in force for almost half a century: “The DFL [may] examine each club’s fitness to participate in the league according to a range of criteria covering sporting, legal, staffing, administrative, infrastructural, security, media-technical and above all financial competence.”
Failure to adhere to these rules can result in clubs having their licence revoked, prevented from operating in the transfer market, or even being relegated from the top flight.
Earlier this year, the latest report into German football finance, covering the 2011-12 season, showed that 14 of the Bundesliga’s 18 clubs had posted a profit as their aggregate turnover exceeded €2 billion (£1.7 bn) for the first time. Furthermore, average Bundesliga attendances (44,293) were the highest in Europe and more than 21 per cent higher than the Premier League’s 34,601.
Upon publication of the report, Dr Reinhard Rauball, president of Borussia Dortmund, who hosted Real Madrid in Wednesday night’s second Champions League semi-final, said: “The licensing system prevents clubs from going too far into debt. It goes with the German mentality. Making and having high debt is not popular in our society.”
Most Read
Yet Germany’s licensing system, which imposes a level of financial control that prevents clubs from living beyond their means, is only one element which enables the Bundesliga to carefully calibrate its costs. The second is a systematic development of youth academies, which helps them recruit top-class German players at a fraction of the cost of buying similar talent on the transfer market.
It is estimated that top-flight German clubs now invest more than €100 million a year in their respective academies, a commitment in sharp contrast to their counterparts across the continent who run up huge debts despite having successful youth programmes of their own.
The catalyst for a structural change, which effectively changed the financial face of German football, was the national team’s unusually poor performance at the Euro 2000 championship when they were eliminated (with England) at the group stage. Following what was perceived as a national disgrace, the DFL decided that the Bundesliga’s over-riding focus must be on developing youth, since when clubs have spent an estimated €732 million on their academies.
German football also recognised the commercial and playing opportunities certain to accrue from hosting the World Cup six years later. Working hand-in-glove with the government, the foundations for longer-term revenue generation were established between 2001-06.
After being awarded the tournament in July 2000, the Germans subsequently made an investment of €1.4 billion (£1.1 bn) in building and refurbishing stadia for the 2006 World Cup. Bear in mind that Germany has no national football stadium – international matches are played at different grounds across the country – and the investment in additional capacity, comfort and hospitality was, to a large degree, publicly funded.
It’s worth contrasting this arrangement with England’s FA which, at around the same time, was spending an astonishing £757 million building a ‘national’ stadium in one of the country’s most inaccessible locations and is now lumbered with huge interest payments as a consequence.
Germany has no such problems. Indeed, the extent of public funding in top-flight German football also partly accounts for the fact that the country has the cheapest ticket prices of any of the main European leagues. The Bundesliga’s most expensive match-day ticket is around €60 (£50), while the cheapest is €12 (£10). Tickets for Bayern Munich’s Champions League encounter against Barcelona on Tuesday were priced between €40 and €150. Prices for the return leg at the Nou Camp range between €91 and €359.
Don’t miss
Having established firm commercial foundations, German football is scheduled to benefit further from its latest rights deal with Sky Sports.
Previously, the Bundesliga lagged behind Europe’s other four main leagues (in England, France, Italy and Spain) in terms of media revenue, but the latest deal for live rights, announced last year, will significantly reduce the gap. Sky have owned German football rights since 2009, but the company’s new deal, for the period 2013-17, is worth €485.7 million a year, an increase of more than €800 million over the course of the contract term.
But it’s extremely unlikely that this inflow of additional cash will be splurged on foreign stars and extortionate wages. When calculated as a percentage of turnover, wages at German football clubs are around 36 per cent of income; there are several Premier League clubs here where the same ratio exceeds an unsustainable 90 per cent.
German football benefits from one other factor, which has a significant impact upon clubs’ profitability. The country’s decentralised economy ensures that clubs are in a much better position to form commercial partnerships. Given the comparative shortage of powerful businesses outside of Paris, Madrid and Rome, the majority of clubs in France, Spain and Italy have limited local sponsorship opportunities. In this area, English clubs enjoy a significant economic advantage, but the appeal of German football could soon challenge the Premier League’s long-standing hegemony.
So is the stage set for a fresh surge in football’s ‘billionaire ownership’ model, this time concentrated on Germany? This too appears extremely unlikely, not least because of a long-standing DFL rule which prohibits any individual from owning more than 49 per cent of a professional football club.
Ironically, many German clubs hold greater commercial appeal to would-be buyers than most English ones.
In the latest period for which comparable figures are available (2010-11), Premier League clubs reported an aggregate turnover of £2.3 billion, compared with the Bundesliga’s £1.6 billion. However, while the English league revealed operating profits of £68 million over the same period (a fall of 19 per cent on the pervious year), German clubs enjoyed profits of £154 million.
There’s a very clear clue to this contrasting profitability in the amount clubs in each league spent on transfers. England’s top flight spent £550 million over the peirod, whereas Germany’s spent only £253 million, preferring to focus instead on producing indigenous talent such as Thomas Mueller and Bastian Schweinsteiger from their academies, a process which clubs acknowledge has a beneficial impact upon the national team.
To date, only Real Madrid have enjoyed two prolonged periods at the pinnacle of European football. Following this week’s Champions League semi-finals, it could soon be Bayern Munich’s turn; given their solid financial base, theirs could last even longer than that of the great Spanish club.