1860 Munich Appear In the Clear, But Is 50+1?

By on Jun 6, 2011 in European Club Football, Finance, Latest | 1 comment

It has come to pass, then, that German football sees its first Arab investor with last week’s announcement that Hasan Ismaik bought a 49% ownership stake in 1860 Munich. The thirty-four year old Jordanian reportedly signed away €18 million in order for the Bavarian club to avoid a calamitous descent from the 2.Bundesliga down into the amateur leagues had it not been able to secure new investment and meet the financial obligations to secure a playing license for next season. Again, the purchase figure for Ismaik is a “reported” sum as neither he nor the club revealed the actual amount, but it comes close to approximating what the Lions’ debts were with around €4 million to spare for future expenses as the 2011/12 season begins. The simple fact that 1860 Munich have future expenses to look forward to might be a welcome blessing for most supporters, who might have had a true fear that if Ismaik’s involvement had not come to pass, there would not have been an approaching season with impending debts to incur.

Well, at least for 1860 Munich there might not have been another season; it seems there would have been one for an amateur phoenix side perhaps styled 2011 Munich if the old club had indeed gone under, such is the passion of those tangled up in blue in Bavaria.

At this point in the narrative, we typically comb through the associations and track the transactions to ascertain whether there is something more to the story. For someone to have plunked down that much money on a club that has been in financial difficulty for years in a business (football) that is, on the whole, a losing endeavour, it makes does indeed tingle the Spideysenses. For instance, why would an Arab real estate tycoon take an interest in a failing second division club in Germany? What more do we know about the third party intermediary, a friend of Ismaik’s whose current occupation finds him as an accountant in the hinterlands of Iraq? Considering that Bundesliga’s rules on ownership prohibit any one individual from owning more than 49% of any club, what benefit is there to Ismaik? How long does the club survive if its new minority owner ever decides 1860 Munich is not the play-thing he envisioned it being and pulls his investment? Would the DFL be complicit in setting up a Portsmouth-esque scenario to sully the polished name of Bundesliga when it comes to football governance should Ismaik not be able to splash the cash as he has promised?

Some of these questions were raised in a previous post, and currently there is nothing to suggest something more nefarious is at work here. Although it is certainly odd that Ismaik has taken the plunge into Germany, as illustrated by the fact that he is the first from the Middle East to do so, the move could truly be more rationally motivated and possibly beneficial to the club than anything else. Munich comes second behind only Frankfurt as a financial hub of the German state, is largely recognized as an international city on the European continent, and sport to an outsider like Ismaik might serve as a soft opening to expand his real estate connections within the continent. Further, his initial discussions of the club’s future hint at keeping 1860 Munich in the Allianz Arena to groundshare with rival Bayern Munich, which might already be causing some irritation with Lions supporters whom might only wish to see the Allianz again when traveling there for an away fixture against Bayern with 1860 having gained promotion to 1.Bundesliga.

Further, if Ismaik settles 1860 Munich’s accounts and makes a move to buy back the club’s previous 50% ownership in the stadium, it might be construed as a shrewd business move by a realtor looking at a prime piece of property in the heart of Bavarian capital. The Allianz still retains a bit of that new stadium smell (having opened in 2005) and there is a 30 year naming rights deal on the stadium from a relatively stable financial services firm which would otherwise be doing much better in the first quarter of this year had the midwestern United States suffered fewer natural disasters. While the club will already be missing out on any possible revenue when the 2012 UEFA Champions League Final is played there because it has already sold its stake to Bayern, that will certainly not be the last sporting spectacle for the stadium to host, and Ismaik could see a return to 1860′s ownership in the Allianz as a gift to receive into the future.

Rather than attempt to extract some ulterior motive to Ismaik’s new association with 1860 Munich–as this tends to be the default position whenever this sort of thing happens in English football because of recent history–let’s instead ponder what this might portend for the future support of Bundesliga’s 50+1 rule. While Dietmar Hopp of 1899 Hoffenheim might have recently chosen to curtail his beneficient spending in favor of the Sinsheim club becoming more self-sufficient, Ismaik might instead provide Martin Kind of Hannover 96 the test case upon which to mount another challenge to the DFL’s provision that no one individual can own a majority share of any club within the top two leagues of German football. For despite the last attempt by Kind to have the rule removed at the 2009 DFL general meeting being soundly defeated, each season that passes without a 1.Bundesliga side winning the Champions League builds more weight to his argument that German clubs cannot succeed in the top European competitions without the ability to attract the level of investment in player wages as the elite of England and Spain enjoy.

Uli Hoeness of Bayern Munich has already expressed such sympathies in favor of Kind’s argument since and it would be somewhat fitting if the new minority owner of 1860 Munich would join his club’s natural rival should the Rothosen decide to throw their considerable influence behind a redoubled effort to continue Kind’s revocation of the rule. Hopp never quite fit the mold to whom Kind’s rationale is targeted , as the founder of SAP has essentially created something out of nothing by investing in his boyhood village club. His tale with 1899 is more about a wealthy fan of the local side returning home a conquering hero rather than a prominent investor looking to make his name in the game. Ismaik, on the other hand, is an outside investor buying into one of Germany’s most well-known clubs, one that historically occupies a position in the national sporting consciousness but has in recent times fallen a bit moribund. Should 1860 Munich benefit from the Jordanian’s involvement and recover a bit of its former glory in the 1.Bundesliga but finds larger ambitions blocked either by current financial rules or locked over what the majority club owners/fans prefer in opposition to the minority one with all the cash, expect the 50+ 1 debate to be reawakened.

And Martin Kind will likely be there too, cheering on his new Arab friend with a fresh lawsuit against the DFL in hand for him to sign.

Follow Twohundredpercent on Twitter here.
Follow Jason on Twitter here.



Share Button

    1 Comment

  1. It’s an interesting development, that’s for sure. In fact, of course, this investor could have bought more than 49% of the club (indeed Hopp has much more at Hoffenheim), as long as that shareholding did not give him more than 50%, plus one vote, of the voting rights.

    However, I hope very much that the DFL will stand firm and maintain the 50+1 rule no matter how loudly Kind & co. cry “It’s not fair!”. Football belongs to the fans / club members and should not be exploited as a plaything by wealthy investors. If that means not winning the Champions League, so be it. It’s a small price to pay.

    Jon Darch

    July 4, 2011

Trackbacks/Pingbacks

  1. Raith Supporters Trust » Blog Archive » News Round-Up from SD – 04/07/11 - [...] 1860 Munich Appear In the Clear, But Is 50+1? Two Hundred Percent [...]

Post a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>