German court rejects legal challenge to Bayern Munich’s club structure

The district court of Munich has upheld Bayern Munich's right to exist.

We previously reported the lawsuit filed in Munich seeking to "dissolve" the parent club of Bayern Munich, FC Bayern München e. V., which holds 75.1% of the corporation that runs our beloved soccer team, Bayern München AG. The law professor behind the suit argued that Bayern Munich should be "erased" from the list of "registered associations" because it could not be described as an association primarily dedicated to a "non-material" purpose.

If you missed it, you can read that piece here.

The ruling

The District Court of Munich has rejected the suit, citing precedent set by the Federal Court of Justice (Germany's highest ordinary court) over thirty years ago. In that case, the court ruled that associations were permitted by law to transfer their economic activities to corporate entities.

The relevant section of the new ruling reads - I translate:

It is explained in the court’s ruling that, in a ruling given on Sept. 9, 1982 (I ZR 88/80), the Federal Court of Justice already had determined that the transfer of economic activities to corporate entities was fundamentally permissible (the so-called "secondary-purpose privilege"). The specific conditions of FC Bayern München [e. V.] were examined. It is a shareholder in the corporation FC Bayern München AG. Upon reviewing the specific circumstances of this shareholding, in the context of scrutinizing the individual case, the District Court of Munich has declined to initiate official dissolution proceedings in this case. There is no legal remedy against this ruling.

The final line means that this latest ruling cannot be appealed, so it would appear that Bayern München e. V. is safe - for now, anyway.

50+1 safe for now

More profoundly for the Bundesliga, this ruling disarms the immediate legal threat to the 50+1 rule imposed by the DFL, excluding corporations from holding a majority of shares in the ownership of what remain Germany’s soccer “clubs.” Most clubs in the Bundesliga operate under arrangements similar to Bayern's, remaining under majority-club ownership while operating under a corporate legal form.

Criticism

Various German legal experts, however, have criticized the ruling as "partially unconvincing" and even "contradictory." Notably, the court denies that Bayern München e. V. dominates Bayern München AG even though the association (e. V.) elects a majority of the corporation's (AG) board of directors. This board is even more powerful than the president of Bayern München AG (i.e., K.-H. Rummenigge), and it is chaired by the president of the association (e. V.), Karl Hopfner.

Jurists also dispute the court's uncritical acceptance of the argument that Bayern München e. V. indeed primarily serves non-material goals.

Contentment

The one legal expert with the most at stake in the case, Lars Leuschner - the law professor who brought it - was actually pleased: "I welcome the outcome of the ruling of the District Court of Munich."

Leuschner, it would seem, was motivated primarily by a legal scholar's urge to eliminate a discrepancy between the law and reality: the German Civil Code stipulates that registered associations must not primarily be for-profit, while the reality of Bundesliga clubs is undeniably commercial. Personally, Leuschner supports 50+1 and the structure of German soccer clubs. He thus can only be pleased with the outcome of the case. His only regret is perhaps that the court did not take more time to justify its ruling with greater legal acumen.