Bayern Munich's CEO Karl-Heinz Rummenigge spoke today at the FAZ Football Summit in Frankfurt, Germany, giving a talk titled “Football at the limit?” (“Fußball am Limit?”; full English program here). The theme was the new soccer landscape after the series of record-breaking transfer fees that shook Europe this past transfer window - above all the €222 million paid by Paris Saint-Germain to wrest Neymar away from FC Barcelona.
Financial Fair Play 2.0
Introduced in 2010, Financial Fair Play (FFP) was intended to impose responsible financial practices on European soccer clubs, preventing clubs from spending themselves into bankruptcy. While it has broadly accomplished this goal with respect to small clubs, it has also inadvertently served to reinforce the financial advantages of wealthy clubs, while doing little to curb the ballooning fees that the wealthiest clubs pay for elite players.
In the wake of the Neymar transfer, Rummenigge believes the time has come to reform FFP:
I believe it’s important, and I mentioned this there - Financial Fair Play was introduced in 2010. FFP is a bonus, not a malus [i.e. a good thing, not a bad one], and I believe it is now a good moment to install FFP 2.0. That’s what we’ve discussed with UEFA over the past days and weeks, because, simply put, the situation has changed over the past 7-8 years. The financial framework has changed, the transfer fees have changed, and accordingly we have to adapt it somewhat, and then put the clubs on what one might call a more rational, understandable course.
Rummenigge emphasized that the highest priority is that all clubs accept and abide by the rules of FFP. He believes that UEFA President Aleksander Čeferin should fight the trend of ever greater transfer fees and seek legislative and judicial support from the European Court of Justice.
It was clear from the beginning that, in legal terms, FFP is not a wooden sword, but also not a sharp sword, because it can be attacked through the laws regulating competition in Europe.
The time has come, so Rummenigge, “to have a discussion with the ladies and gentlemen in Brussels” about finding a legal solution that would regulate all clubs fairly.
How long can Germany afford the luxury of 50+1?
Rummenigge also addressed the question of Germany’s 50+1 rule, which prohibits a single investor from controlling more than a 49% ownership stake in a German club licensed by the DFL.
Rummenigge characterized 50+1 as a luxury that German soccer will soon no longer be able to afford:
Personally, I think every club should decide for itself whether to open the door to outside capital. Germany has a more romantic view of soccer than other countries. The big question will be how long we can afford this luxury. [...] We have competition that I see not only as national but also as global.”
Investors could raise the competitiveness of the Bundesliga and help German clubs keep pace and compete with international competition - most notably but not exclusively the English Premier League.
The 50+1 rule also stands on notoriously shaky legal grounds. As Rummenigge put it, “Everyone knows that as soon as someone sues, the 50+1 rule will fall.” The demise of 50+1 could in fact be close at hand. 1860 Munich’s shareholder Hasan Ismaik filed a lawsuit against the rule late last June, although it remains to be seen how far it will go.
Despite that threat, Rummenigge does not see an immediate need to abolish the 50+1 rule, “But I do not rule out the possibility that something will eventually have to be done for the global competition.”