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What is the 50+1 rule? Pros and cons explained

On Sunday, while prodigy Mason Greenwood was scoring goals to essentially ensure Manchester United‘s participation in one of the most prestigious competition in the world, The Champions League, next season, most of the Twitterati were talking about something else. Somehow the Glazers had managed to make all the talk all about them. Later that night, the European ‘Super’ League was announced.

But, let’s not go there. Thursday morning, Manchester United released a statement.

“At approximately 9am this morning a group gained access to the club training ground. The manager and others spoke to them. Buildings were secure and the group has now left the site.”

The group mentioned above were reportedly 20 United supporters who headed inside Carrington to protest against the Glazers.

When we closely analyze what the banners say, One of them says Glazers Out, while the other says 51% Manchester United. What does this Second banner actually mean? Let’s dive into it.

The 50+1 Rule

So this banner is referring to the 50+1 Ownership Rules, which are used by the German Football League (DFL) to ensure that fans (members) have a greater say in the day to day running of the club. The 50+1 rule guards a spectator from becoming a customer.

Under German Football League rules, football clubs will not be allowed to play in the Bundesliga, if commercial investors have more than a 49 percent stake. Hence, the fans will hold majority of a clubs voting rights. 

Basically, this means that private investors cannot take over clubs and potentially push through measures that prioritize profit over the wishes of supporters. The ruling simultaneously protects against reckless owners and safeguards the democratic customs of German clubs.

However, this rule does has an exception. If an investor have had an interest in a club for more than 20 years, they can apply for an exemption from the 50+1 rule. As a result of this exception, Bayer Leverkusen and Wolfsburg owners have been allowed to take a majority stake in their respective clubs.

The Pros

The 50+1 rule has several advantages, here are just a few:

  • Obviously, it allows the fans of the club to own a majority stake. This ensures that fans have a greater say in the running of the club.
  • It helps in keeping debts under control and wages paid to executives in check.
  • It keeps the ticket prices under control, ensures money being spent towards maintaining and upgrading stadium infrastructure and this in turn leads to better accessibility and comfort for the so called “legacy fans”.
  • And most importantly, it would ensure that owners such as the Glazers could never on their own take any decision, no matter how small and big it would be. Nor could they treat clubs like a franchise or an asset rather than a football club.

The Cons

However, the 50+1 rule has several disadvantages, here are just a few:

  • It drives away potential sponsors and investors in the club as well as the Premier League, as investors are deterred by not being able to have legal control over the club they are investing in.
  • It threatens turning Premier League into a competition where a team sits on top of the table for many seasons, without any potential challengers, just as the Bundesliga.
  • The 50+1 Rule does not regulate the financial stability of a team. Like for example in Bundesliga, Borussia Dortmund was able to run up unsustainable debt without violating the solvency criteria. There is no guarantee that a fan elected board will be competent.
  • It leads to clubs misusing the rule, which gives them unfair advantage over others.

RB Leipzig, known as SSV Markranstadt as recently as 2009 were a fourth-tier side. By 2009, the club had only 17 paying members – compared to other Bundesliga teams who have hundreds of thousands of members , and all these 17 were Red Bull employees. So it was easy for Red Bull to acquire the ownership status. They pumped in money and now they play in the Champions League.

What’s been said?

Many influential People in England, including the Prime Minister of Great Britain, have spoken about the need of a fan-led review into the ownership and governance of Football clubs in England.

Boris Johnson, Prime Minister:

“We will do a root and branch investigation into the governance of football and what we can do to promote the role of fans in that governance. One of the key worries about the ESL plans was that they would have taken clubs that take their names from English town and cities and turn them just into global brands with no relation to the fans, to the communities, that gave them life and that give them the most love and support. “

Oliver Dowden, the Digital, Culture, Media and Sport Secretary said the following to talksport:

“Naturally we’ve got to learn the lessons from the crisis in football financing during the COVID crisis. We need to put this on a more sustainable footing. For example in the German leagues they have a different governance structure so it’s right we look at those things. The Prime Minister was good, I had a meeting with him and fans on Tuesday and he said we had to do whatever it took and that includes legislation and if legislation is required we’ll do that. But the immediate legislation we were preparing to pull together was to deal with this immediate threat from this outrageous proposal.”

Dowden also told the House of Commons on Monday he was “struck” by the 50+1 system:

“They talked about the German model: German clubs didn’t take part in this (the Super League), that’s because fans had the greater stake in it, We’ve seen over time fans stake in clubs erode, I think it’s important we look at that to give fans greater influence and control.”

How feasible is it? (Opinion)

The DFL adopted this rule in 1998. Before that, German teams were not-for-profit organizations run by members’ associations, and until 1998 private ownership of any kind was prohibited. Whereas there is no such rule in England, which means that commercial investors have majority stake in the clubs. Even if the government intervenes, and form new laws, it would take a lot of time, documentation, court hearings and most importantly resources.

It doesn’t mean fans shouldn’t push for reforms or laws to be introduced to ensure that fans have a greater say in the club which are based on the German Model. If something good has happened this week, (apart from Ed Woodward‘s resignation) it has proved to everyone that fans when united, can do anything, they can force even the most selfish, money-minded owners to reconsider their decisions and even get the government pressure these individuals or groups on (or off) the record.

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