Regulatory Framework of German football. Birkbeck College, University of London June 10th,2013 Prof. Dr. Christoph Breuer

Transcription

1 Regulatory Framework of German football Birkbeck College, University of London June 10th,2013 Prof. Dr. Christoph Breuer

2 Agenda Introduction Germany sick man of European football Germany vital man of European football Conclusion 2

3 Introduction 3

4 UEFA CL-semi final Bayern FC Barcelona 4:0 Dortmund Real Madrid 4: Germany Spain 8:1 Really the starting point of a German domination in European football? 4

5 Fast moving times Wicker, P., Weingärtner, C., Breuer, C. & Dietl, H. (2012). The effect of a sports institution s legal structure on sponsorship income: The case of amateur equestrian sports in Germany. International Journal of Sport Finance 7(4),

6 Germany - sick man of European Football 6

7 Football is a simple game; 22 men chase a ball for 90 minutes and at the end, the Germans always win. (Gary Lineker)

8 The 2000 desaster 8

9 Club level 9

10 even worse 10

11 Economic analyses Breuer, C., Pawlowski, T., Hovemann, A. & Jin, R. (2009). 试析欧洲足球冠军联赛中的 竞争平衡 (Discussion on Competitive Balance in the UEFA Champions League). China Sport Science 29 (4), Pawlowski, T., Breuer, C. & Hovemann, A. (2010). Top clubs' performance and the competitive situation in domestic and European soccer competitions. Journal of Sport Economics 11(2),

12 .. Competitive balance SDTP CBR = SDLP SDTP SDLP T,i N,t = = T T N t= 1 N i= 1 (TP t,i T t,i TP) i t 2 (TP TP ) N 2 The competitive balance ratio (CBR), which is a comprehensive measure that captures both CB components can be easily derived as the ratio of the average standard deviation of team points to the average standard deviation of league points (Humphreys, 2002). The smaller the value of the CBR, the less balanced is the league. 12

13 The CBR of the top five clubs in the European top leagues before and after the turn of the millennium / / / / France Germany Italy Spain England Pawlowski, T., Breuer, C. & Hovemann, A. (2010). Top clubs' performance and the competitive situation in domestic and European soccer competitions. Journal of Sport Economics 11(2),

14 Germany - vital man of European Football 14

15 Arguments for vitality 1. Cost control vs. spending power 2. Revenue maximizing behavior and its effects : the fan-orientation of German Bundesliga 3. Regulatory framework I: 50+1 ownership rule 4. Regulatory framework II: licensing system 5. Regulatory framework III: Centralized selling of media rights and the distribution key of media revenues 6. Viability of Football pyramid: clubs ; 6 mio. memberships

16 Cost control vs. spending power The ratio between salary costs and total revenue in the Bundesliga is 37,8%. To give other examples as a benchmark, the average within all first leagues of the UEFA is around 64% and in the Serie A up to 75%. Individual clubs like e.g. Paris or Chelsea break in some years the 100%. mark. 16

17 The fan-orientation 17

18 Deloitte,

19 Franck, E. (2010). Private firm, public corporation or member s association governance structure in European football. International Journal of Sport Finance 5,

20 Platform theory Cross-Side Effect Same-Side Effect Side A Platform Side B Same-Side Effect Cross-Side Effect 20

21 Wicker, P., Weingärtner, C., Breuer, C. & Dietl, H. (2012). The effect of a sports institution s legal structure on sponsorship income: The case of amateur equestrian sports in Germany. International Journal of Sport Finance 7(4),

22 50+1 ownership rule 22

23 Franck, E. (2010). Private firm, public corporation or member s association governance structure in European football. International Journal of Sport Finance 5,

24 Club licensing system Audio visual criteria Staff & administrative criteria Economic criteria Club Licensing System Infrastructural criteria Legal criteria Sportive criteria 24

25 UEFA FFP The black box 25

26 Centralized selling of media rights 26

27 National rights Ratio for rights revenues between Bundesliga & 2. Bundesliga is 80:20, which means that the Bundesliga clubs get 80% of the national revenues from media rights and league sponsoring. Within the leagues, the spread between the first club and the last club of the Bundesliga is 2:1, the spread in the 2. Bundesliga is 2,25:1. The place of each club in the media ranking is determinated by a weighted 5-year-consideration.

28 Conclusion 28

29 Evidence vs. speculation Wicker, P., Weingärtner, C., Breuer, C. & Dietl, H. (2012). The effect of a sports institution s legal structure on sponsorship income: The case of amateur equestrian sports in Germany. International Journal of Sport Finance 7(4),

30 Thanks for listening! 30