Tangled Up in Blue: 1860 Munich Has a New Challenge

By on May 17, 2011 in European Club Football, Finance, Latest | 2 comments

One of the best lines from that cinematic masterpiece Talladega Nights: The Legend of Ricky Bobby, is “If you ain’t first, you’re last.” While not entirely apt, denizens at Maine Road and later Eastlands might have felt this way a bit as they witnessed Manchester United win league titles and trophies whilst City battled relegations and derby defeats. Simply put, playing second fiddle in a two-piece band stings and is not a prospect any sporting club would wish to entertain. As it has been for some time in Manchester, England, so it has been in Munich, Germany. While Bayern Munich have risen to become a contender in the European theatre, the most recognizable club to casual observers of German football with its “FC Hollywood” label, winning numerous domestic accolades, 1860 Munich have regressed from being selected by the German League ahead of Bayern for 1.Bundesliga consideration and winning the league in 1966 to playing most seasons in the lower divisions these days, mired in financial follies such as the one previous president Karl-Heniz Wildmoser made last decade by entering a highly unpopular groundshare arrangement with die Roten at the Allianz Arena.

Perhaps just to illustrate further how poorly things have been for the Lions in relation to Bayern, when they were no longer able to afford their ownership interest in the Allianz, the club sold is 50%  stake to Bayern to raise much needed revenue but contractually had to remain as rent-paying tenants to the Reds, only to fall behind on those payments too. Earlier this year, when it looked as if 1860 Munich would be disallowed from completing this season’s 2.Bundesliga fixture list unless it could secure some eight million euros to meet the league’s liquidity requirements, Bayern Munich offered to extend the €8 million as a loan to its tenant so that it might pay its rent (€3 million back to Bayern), player and staff wages, along with satisfying other creditors so that the Lions would be able to complete their 2010/11 campaign. Management and supporters of 1860 vehemently rejected this generous, albeit calculated, overture by their would-be benefactor, including some 1860 supporters painting the front of Bayern’s headquarters blue. Bayern President Uli Hoeness received an earful from a vocal minority of Bayern Munich fans as well for attempting to aid the city rival, but most of the anger from the proposal originated from 1860 supporters who would rather have seen the Lions liquidated and forced to begin anew in the amateur leagues rather than be continually propped up by a big brother who might have derived some small pleasure in being the club’s paymaster.

Somehow, the Lions were able to secure the financing until the end of this campaign without Bayern’s help, meeting minimum league requirements to see out a 2.Bundesliga season that saw them finish a somewhat respectable 9th in the table and doing the double over promoted champions Hertha Berlin. A new season with another deadline to meet in order to keep its playing license with the German Football League (DFL) awaits, however, and 1860 Munich must look to secure some €10 million by the June 30 date by which all clubs in the top two tiers of German football are obligated to present to the DFL their accounts. If the DFL deems a club to be insufficiently suitable in terms of solvency and liquidity, it can revoke said club’s license and prevent it from participation.  As 1860 Munich have been in the trouble with the DFL extending back to 2009, when a financial model the club put forward was rejected after a potential investor group backed away, up to this season when the club was docked a point in October for falling behind on its rent at the Allianz, the DFL will most likely examine the club’s report this summer with the finest diagnostic tools at its disposal.

Just as Manchester City was rescued from a possibly dreadful fate by the Abu Dhabi Group in 2008 as Thai authorities were freezing the assets of its owner Thaksin Shinawatra while seeking to extradite him to face corruption charges back in his native country, 1860 Munich might be saved by an Arab investor rumored to be a part of the petrodollar clan. Hasan Abdullah Ismaik’s name was presented in April as a potential saviour of the club when it appeared the club was about to become only a memory. The 34 yr old was rumoured to interested in investing between €10 to €20 million into the club and buying up a 49% stake in its ownership. Of course, Ismaik nor any other investor could purchase a full majority in any Bundesliga club owing to the 50 + 1 stipulation which guarantees majority ownership to a club and its supporters, but such a large initial injection of cash to the empty 1860 coffers would signify a return to normalcy for the Lions and a resumption of its Bavarian rivalry on more equal terms. And should he become Bundesliga’s first Arab investor, Ismaik would likely operate in a capacity similar to 1899 Hoffenheim’s Dietmarr Hopp, who has funded TSG’s rise to the top flight as its financial benefactor and quasi-owner from the chairperson’s position.

Since April, however, things have gone silent in the blue half of Allianz Arena with regard to Mr. Ismaik, as any likely deal has not yet been struck and his name was not mentioned when it was announced in the final bits about the club meeting its financial requirements for this season. If an arrangement has been concluded, the time for an announcement is approaching with the DFL waiting with its team of auditors at the ready this summer. The delay, however, has allowed German media time to look into Mr. Ismaik to see if he is who he was purported to be when the first rumours began swirling about his involvement with the Lions. Initially advertised as being an Abu Dhabi businessman–which likely was followed by the sounds of gurgling petrol and ringing cash registers–it was discovered he is actually a Jordanian businessperson whose family made its money in real estate, not oil, and it is his father, not him, who owns businesses in Abu Dhabi. He was alerted to the plight of the Bavarian club by a middleman who is a financial services manager in the Iraqi state of Hamada, which sounds slightly fishy when the word “middleman” is inserted. As other colleagues passed on the idea of investing in 1860 as the club was deemed a waste of time and money, it seems Ismaik saw it as an opportunity to increase his business contacts in Germany and sought out club officials Robert Schaefer and Dieter Schneider to inspect the club’s records. Despite not having the wealth of a billionaire as Manchester City’s sheikh, Ismaik is seen to be “wealthy enough” to see 1860 Munich finally move away from its financial abyss and resume its place amongst the elite of German clubs.

Have Pompey supporters stopped reading yet?

It must be said that the DFL’s financial requirements are rather strict, so it will be difficult for Ismaik and the club to smudge numbers and flirt with falsehoods if he is not all he claims to be. The grander question might come down to Mr. Ismaik’s proper motivation for wanting to support a second division German side when he cannot claim full majority ownership. He would not be entirely able to treat 1860 Munich as a personal ego-stroke as Sheikh Mansour has with Manchester City, and there are certainly other ways a business could extend its overseas commercial contacts other than investing in a football club. The argument that he is simply a fan of the club or took pity on its condition similar to what Hopp has down with Hoffenheim has an air of insincerity about it, as in the case of Hopp he chose to invest millions of euros into the village club of his youth and had a previously established association with 1899 prior to taking on a larger role. Whatever Ismaik’s motivations in pursuing 1860 Munich, however, should his investment occur one of the first things Lions supporters will ask of him is to move the club out of its continued arrangement with rival Bayern and extricate the club from its contract at the Allianz Arena. Otherwise, 1860 Munich supporters groups might demand he divest himself immediately of his 49% stake and start planning for the club’s adventures in the amateur leagues. For despite having their pride dented and eroded over the years by their club’s misfortunes, there is one thing 1860 Munich fans despise more than their own club’s woes. They can’t stand the colour red, either at their stadium or in their club’s financial records.

Lions supporters would likely be pleased to see a blue moon rising over Munich instead.

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    2 Comments

  1. Nice post. The financial troubles can’t help but spill onto the field; Die Lowe — the players & manager — have done decently to ignore the boardroom drama and just play.

    mightymightydr

    May 17, 2011

  2. Pompey fans should instantly twin the club with 1860 Munich – if only they had the power so to do …

    SJ Maskell

    May 17, 2011

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