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April 24, 2013

Model Bavaria

The most impressive ‘permanent representation’ to the European Union in Brussels is not the French, British of German one, but that of a region: Bavaria. The beautiful ‘château’ just some meters from the European Parliament has been considered megalomaniac by some observers, but is calmly defended by its inhabitants as an excellent real estate investment and thus good use of taxpayers’ money. My students generally simply love it, just as they appreciate the very nice welcome there, the self-confidence that emanates from it, as well as the excellent coffee and bretzels they usually receive. They are seduced by a country that likes to see itself as Europe’s model region, combining a strongly rooted cultural heritage and identity with world-leading high-tech industry and research: ‘Laptops and Lederhosen’ as they call the fascinating mixture themselves, referring to the infamous folkloric leather trousers.

A stone's throw from the European Parliament: the Bavarian 'Landesvertretung' in rue Wiertz.

These days the Bavarian way of doing things seems to be also becoming the model of economic governance of professional football clubs. All over the last two decades, following the paradigm shifts of the 1990s, Manchester United, Real Madrid and FC Barcelona were considered the epitomes of international marketing and merchandising, the ultimate global football brands. Which they probably still are, but the model for an economically healthy and sustainable management these days is the club that by its very name almost arrogantly claims to represent Bavaria: Bayern Munich.

Here are some quotes from recent months which illustrate the trend:

Sandro Rosell, the president of Barça, has repeatedly admitted that his club ‘needs to become an economic model, which it has been far from being these last years. (…) Without the help of the Qatar foundation, we would have been in deep trouble.’ (…) The model is Bayern Munich. They are managed perfectly.’ (Interview  in L’Equipe Magazine No. 1553, 21 April 2012.)

Barbara Berlusconi, the cavaliere’s daughter who is in charge of ‘special projects’ at AC Milan, uses the same language: ‘Bayern is the best of all models. Even a failed season does not cause them any financial damages.’ (Interview in L’Equipe, 10 December 2012).

And even Lyon’s entrepreneur-president Jean-Michel Aulas, who always looked to Manchester for inspiration, has come round to admit that the standards are set in Bavaria these days: ‘In order to compete with Paris, we have chosen a different model, closer to the one of Bayern.’ (Interview in Le Figaro, 12 April 2012). ‘Bayern has implemented, well before other clubs, many principles which have turned out to be pertinent, concerning its capital structure, its corporate relations, its identity, its stadium… We are choosing very similar options.’ (Interview in L’Equipe, 11 April 2013).

Identity: bretzel, beer, and the Bavarian white and blue 'tartan' that is in the heart of the club's emblem.

They are not wrong. Protected by the German ’50+1 rule’, which stipulates that no corporate investor may take over more than 49% of a football club, and counting almost 200 000 socios, the club has chosen its corporate partners very carefully and manages them in long-term relationships: apart from the usual sponsorship pool of ‘premium partners’, two Bavarian companies – Adidas and Audi – hold 9% of the Bayern shares each, while Munich-based Allianz promotes its name through one the world’s hottest looking stadia. At the same time the club’s identity is firmly rooted in its ‘we are what we are’ attitude embodied by a series of highly loyal home-grown player icons such as Schweinsteiger, Lahm, Müller, Alaba and Kroos and adopted by international stars like Ribéry and Martinez.

There are plenty of reasons not to like Bayern (especially if you have the bad luck to support any other German club…), but it’s difficult not to admire the way they have patiently managed to set up a model of sustainable growth in an irrational business like football. Whether the club’s hard-earned reputation will be lastingly damaged by the current tax fraud scandal around its president remains to be seen.

Moreover, since yesterday’s 4-0 in the semi-final against Barça, it even seems that the economic model finally also pays off on the pitch. Bayern may well be on their road to their first Champions League victory since 2001. And if they fail again in the final like they did in 2012, 2010, 1999, 1987 and 1982, they will at least be sure to top yet another European chart, leaving Benfica and Juventus behind as ‘record loser of Champions League finals’.

Post by Albrecht Sonntag in the category : Competitions, Posts - No Comment

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