Bundesliga investor plan rejected after intense fan protests

For Borussia Dortmund chief executive Hans-Joachim Watzke, this should have been a week of victory and celebration, with his club just one win away from its first Bundesliga title in a decade.

On Wednesday, however, Watzke (63) suffered a personal defeat in his additional role as supervisory board chairman of the German Football League (DFL), when a motion to enter the Bundesliga into a multi-billion euro partnership with a private equity investor was rejected.

For months, Watzke and interim DFL chief executives Axel Hellmann and Oliver Leki have been working to convince the 36 clubs that make up the Bundesliga and Bundesliga 2 to vote in favor of a plan to secure a €2 billion ($2.15 billion) investment from a private equity firm.

In return, the investor — the three potential candidates were Advent, Blackstone and CVC — would receive 12.5% of the profits made by a new DFL subsidiary firm, "DFL MediaCo," which would manage and sell the Bundesliga's television broadcasting rights, over a 20-year period.

But the motion tabled at the DFL's extraordinary general meeting in Frankfurt on Wednesday failed to obtain the two-thirds majority (24 votes) required in the secret ballot, with only 20 clubs voting in favor. Eleven voted against — including Cologne, Stuttgart and St. Pauli — and five abstained.

"Sometimes, things are simple in life," conceded Watzke at a subsequent press conference. "That's democracy. We had a majority [in favor] but not the majority we wanted. So that's the end of the issue."

Why was the Bundesliga looking for investment?

Watzke, Hellmann, Leki and other advocates of the proposed deal had argued that German football is in need of significant investment in order to avoid being left behind by rival European leagues.

Particularly in terms of broadcasting rights, the Bundesliga lags well behind England's Premier League, whose current international rights deal — €6.3 billion between 2022 and 2025 — dwarfs that of Germany's top flight, which sits at €170 million per year.

Not only that, English clubs are also more attractive to wealthy investors and owners, unrestricted by the so-called 50+1 rule which stipulates that German clubs must remain under the majority control of their members.

And so, with clubs unwilling and indeed unable to open up to major investment on an individual level, the DFL plan envisaged investment in the league as a whole, with the fresh capital to be invested in digitalization and a new online content platform (40%), stadiums, youth academies and other club infrastructure (45%) and the rest free to invest in players (15%).

Why was there such opposition?

However, the plans, which were first reported by German media in February, quickly faced opposition from supporters, but also from certain clubs, notably Bundesliga side FC Cologne and second-division club FC St. Pauli, who voiced concerns about the levels of influence a potential investor would want in return for a cash injection as well as misgivings about the distribution of the money.

"By entering into a partnership with a private equity investor over a period of 20 years, Bundesliga clubs would lose some of their freedom to make decisions," read a Cologne statement, rejecting the idea of "generating money at league level for use at club level."

Watzke, Hellmann and Leki had repeatedly insisted that an investor's influence would be strictly limited and that they wouldn't have any influence over the format of the competition, in an attempt to allay fears of a further fracturing of the weekly schedule for the benefit of television, antisocial kick-off times to suit foreign audiences, or the prospect of competitive games abroad.

This week, however, confidential DFL documents leaked to Sportschau revealed that an investor would indeed be afforded a form of veto in "important matters." Requests for the DFL to elaborate reportedly went unanswered.

Ahead of Wednesday's vote, St. Pauli president Oke Göttlich told public broadcaster NDR that his club would only consider discussing an investor "if it were absolutely clear what is to happen with the money, that it wouldn't just be unfairly distributed as it is now and wouldn't just further destroy the competition."

'The next two years will be difficult'

Supported by Cologne, Göttlich tabled a motion at Wednesday's meeting to postpone any decision but withdrew it after receiving guarantees from the DFL board that clubs would be able to suggest changes to any deal until June 23. But the DFL's proposal was still rejected, much to the chagrin of Watzke, Hellmann and Leki, who continued to underline the need for investment and fresh capital in the league.

"Those who voted against [the proposal] need to answer the question: where is the Bundesliga going to get its security and stability from in future?" said Hellmann, who also heads up Eintracht Frankfurt's board. Leki, SC Freiburg's financial director, added: "The next two years, carrying on as we are, will be a difficult job."

But St. Pauli's Göttlich welcomed the decision, saying in a statement: "The result and the lively debates show that there is evidently still a lot of explaining to be done and questions to be answered. It is of central importance that all clubs are given the time and space to fully understand the implications of such a deal, which wasn't available here.

"The general meeting has proven how important and helpful it is to discuss the intentions and strategies of the DFL openly and also deal with differences of opinion."

Victory for the fans - Dortmund lead the way

While the rejection of the DFL's investor plans can be seen as a defeat for Borussia Dortmund boss Watzke, it represents a major victory for Borussia Dortmund's organized supporters, who have led the nationwide protests against the investor deal in recent months. Even one Bayern Munich fan representative said: "A huge thanks to Dortmund. No other fan scene put so much work into the investor topic."

For three home games in a row, Dortmund fans transformed their famous Yellow Wall into a sea of banners and flags outlining their opposition to any league partnership with a private equity investor — right under club CEO Watzke's nose.

But it wasn't just catchy messages on banners; there were also online articles, leaflets and stickers distributed at games, podcasts and interviews to explain the complicated issue to fellow fans, and even a podium discussion at which Watzke and Hellmann themselves were cross-examined.

"Opening up to investors, particularly to private equity firms who are after maximum profit, risks them using their influence to maximize their returns, potentially against the interests of fans and stadium-goers," said Jan van Leeuwen, who sits on the board of Dortmund's official Fan Department, in a statement distributed to journalists in the press box ahead of the home game against Union Berlin.

"In future, top fixtures could be played at 22:30 German time for the benefit of an American prime-time audience, as is already the case in Spain, or even abroad if it helps open up new revenue streams for the investor," added Claas Schneider, spokesperson for Südtribüne Dortmund, an umbrella group representing 31 BVB fan clubs, the hardcore ultra groups and around 4,000 individual supporters.

"It is also unclear how exactly the engagement of an investor is supposed to increase the competitiveness of the league," he continued. "If the distribution of the extra revenue is weighted in favor of the clubs who are already strongest, in order to help them compete in European competition, it would only serve to cement the existing unequal structures and make it even harder for smaller clubs to ever bridge the gap."

The campaign was taken up by rival supporters, with banners reading "No to DFL investment!" visible in stadiums across the country and fans from Mönchengladbach to Munich, Bremen to Berlin, imploring their elected club representatives to vote against the proposal.

In a survey of over 56,000 fans conducted by Kicker magazine at the start of May, 67.65% of respondents said they were against an investor in the league, with only 24.47% in favor. Only at Red Bull-backed RB Leipzig were a majority of fans (53.42%) in favor — perhaps unsurprisingly.

50+1 in action: German football taking a different route

And so, while Qatari-owned Paris Saint-Germain continue to disillusion their supporters in France, while Abu Dhabi-owned Manchester City celebrate a fifth Premier League title in six years despite being charged with 115 counts of breaking league rules, and while Chelsea battle with the fallout from their forced separation from oligarch Roman Abramovich in the wake of Vladimir Putin's invasion of Ukraine, German football has once again voted to remain in control of its own destiny.

In an example of the 50+1 rule in action, the representatives of 16 clubs were encouraged to act on the desires of their members and vote against a partnership with a private equity firm, and they'll now have to live with the consequences, for good and bad.

Not everyone is happy, although Hans-Joachim Watzke might be able to console himself if Dortmund manage to break Bayern's monopoly on the Bundesliga title on Saturday, as the closest title in Europe this season reaches its climax — which may also suggest, incidentally, that German football isn't getting it completely wrong.

For many supporters, especially those of Borussia Dortmund, it would taste doubly sweet.