By Ben McFadyean.
In a time when clubs are struggling due to the impact of the cost of living crisis and the continuing after-effects of the COVID-19 pandemic, the fight for sponsors and investors in football has intensified, leading some clubs, including those in the Bundesliga, to innovate.
With all but three clubs (Manchester City, Fulham, and Aston Villa) in debt in England’s top tier, and clubs including Schalke 04 and RB Leipzig in debt in the Bundesliga, clubs are seeking wider afield for alternative sources of investment.
In Germany, the country with the 50+1 rule which guarantees football clubs are majority-owned by members, that source is increasingly those members themselves. Could a return to grassroots initiatives also be an alternative for clubs in England?
FC St. Pauli, a club known for its independent spirit and strong connection to the local community, has embarked on an unprecedented move by selling its historic Millerntor Stadium to the fan base. This bold decision is not only a financial strategy but a reflection of the club’s values and vision.
To understand why the club is taking this significant step, it is essential to explore its history and ethos and the financial challenges it has faced since being promoted at the end of the 23/24 season.
A Club Committed to its Values
St. Pauli has long been more than just a football club. Known for counter-culture, the club is rooted in left-wing politics and inclusivity. Its fans are active in social causes, and the club has cultivated a fiercely loyal following that stretches beyond Germany. The Millerntor-Stadion, located in Hamburg’s St. Pauli district, symbolizes this identity—a place where fans are not customers but active participants in the club’s destiny.
Unlike some modern football clubs, which prioritize commercial interests and corporate ownership, the Brown and Whites have always sought to maintain a genuine community ethos. This commitment has led to the current decision to sell the ground to the members, ensuring that the home stadium remains in the hands of those who care about its future.
The Pressures in the Modern Game
One of the main reasons St. Pauli is selling the ground to its fans is to secure its financial future in the face of the increasing commercialization of the game. Clubs across Europe are under constant pressure to secure additional revenue streams, leading to the growing involvement of investors or takeovers.
St. Pauli, however, has resisted the idea of corporate ownership, instead upholding the principles of membership and community governance.
St. Pauli aims to minimize the pressures of foreign involvement by selling the stadium to the fans. This move allows the club, which was founded in 1910, to secure immediate funds without sacrificing its independence or core values.
In essence, it is a form of crowd-funding that empowers fans to become stakeholders in the club’s most important asset—its home.
Preserving the Club’s Legacy
Selling the stadium to the fans is also a way to protect the club’s legacy and future. In a football landscape increasingly dominated by finance, many clubs risk losing their identity as they focus on sponsorship, commercial deals, and investments. St. Pauli’s decision is a safeguard against this erosion of its character.
The move to sell the stadium will allow fans to have a say in how the club’s biggest asset is managed and ensure that commercial interests don’t take priority over the community’s needs. The goal of the sale is to preserve the 30,000-capacity stadium as a space where inclusivity and social responsibility are the main focus for generations to come, securing a collective future for the club.
The decision to sell the Millerntor to fans aligns with FC St. Pauli’s vision of football as a socially reasonable force in an increasingly profit-focused industry. By involving fans in this process, St. Pauli strengthens the bond between the club and its supporters, ensuring they are an integral part of the club’s future.
If successful, this initiative can open the door for other clubs to adopt fan-based ownership models, lessening the game’s reliance on commercialization. It demonstrates that football can thrive through financial investments and harnessing the commitment and support of its most loyal fans.
What Next for the Hamburg Club?
St. Pauli’s choice reflects its commitment to its ideals. By ensuring that its iconic stadium remains in the hands of the fans, the club is safeguarding its legacy and culture for future generations and reaffirming the belief that football is a sport for all, regardless of income level.
The club hopes to raise an estimated €30-40m by selling a 46% stake in the ground. This will be available in the form of shares. The Hamburger Morgen Post reports that shares are available at €750 plus an administration fee of €100.
The launch was only available to club members and scheduled for Sunday, 10 November 2024. Six thousand six hundred members signed up, and according to the St Pauli club website, the club raised an impressive €8.5m through the initiative called St Pauli Cooperative.
Speaking to the Hamburger Abendblatt newspaper, St Pauli chairman Oke Göttlich felt emboldened by the fans’ response to the board’s initiative:
‘There have been many positive reactions to this project over the past few days,” he said. “From the membership, our fans, other clubs, politicians, and the Hamburg society.
“All of this shows us that the time is ripe for a different kind of football and a different kind of financing in professional football.”
Union Berlin is no Stranger to Fan Power
At the annual general meeting of Union Berlin, a scheme in the same vein was agreed to raise €60m of investment capital for the 1968 East German Cup winners.
The existing shareholders approved a capital increase of up to €60 million. One hundred twenty thousand shares worth €500 each are available to members.
The launch of the shares was scheduled for November 25, with a further release on December 9. The aim is to raise €40m towards increasing the capacity from 22,500 to 40,000, with work to start in the summer of 2025.
Speaking about the initiative, club chairman Dirk Zingler said: “It is a historic moment that will secure this football location for future generations. It is about creating a robust equity and financial structure. This will facilitate the expansion of the stadium .”
Union has a long tradition of trading shares to create a sense of togetherness and co-determination. Over 4,000 Union fans subscribed to more than 5,400 shares worth €2.72 million 13 years ago and thus contributed financially to the expansion of the main stand in 2012/13.
Union Fans have a history of making their contribution to the club felt. In 2008/9, ahead of the club’s promotion to the 2 Bundesliga, 1600 of the club’s supporters with a range of building skills joined up over the summer to do the work to bring the ground up to speed saving the club an estimated amount of € 2m.
Members are the Key for FC Schalke 04’s Challenges
On October 10, the Gelsenkirchen-based club announced the foundation of a sponsors’ cooperative, enabling the club’s 180,000 members to acquire shares in one of Germany’s most impressive grounds, the 62,000-capacity Veltins-Arena.
As reported in Reviersport magazine, the seven-time German champions are currently labouring with a reported debt level of around €162m, which could even result in a points deduction.
The club is currently in 14th place, just one point above relegation. A drop to the third tier for the historic Ruhr Valley side is unthinkable.
At the annual general meeting of the club this month, the club, after Bayern Munich, Schalke has the second most member-shareholders with 190,000 members. As reported by the West Deutsche Zeitung, they have raised as much as €50m by tapping into the goodwill of the supporters. Tagesspiegel newspaper reported that the club will offer shares in the stadium at €250 each. A start date has not been confirmed but it is believed to be mid-January 2025.
Fan Ownership: A Vision for the Future?
This initiative by the North German club taps into a broader and growing trend of fan ownership in the game. In Germany, the 50+1 rule, which requires clubs to be majority-owned by their members, has long been in place to prevent outside investors from having total control. While the rule keeps fan influence strong, directly selling the stadium to supporters is unprecedented and showcases the club’s commitment to fan involvement.
In other leagues, especially in lower divisions, including in England, names like Exeter City, Bury, AFC Wimbledon, Portsmouth FC, Luton Town, and Bath City, have also experimented with fan ownership models, each with different outcomes.
Like Portsmouth FC in 2017, when the fan consortium sold the club to US investor Michael Eisner’s Tornante group for £5.67m, they eventually transferred back to corporate ownership.
However, St. Pauli’s initiative stands out in its scale and has the potential to inspire other clubs to consider similar funding models.
This initiative represents a shift away from the generally accepted football business model, which all too often prioritizes short-term profit over long-term community values.
The current combined debt level of Premier League clubs is estimated at £3.14 billion. In the case of Everton, the £0.5 billion owing and challenges with the ownership transfer and stadium redevelopment have pushed the club to the edge of sustainability.
Lower down the English pyramid, historic clubs, including Southend United, Reading FC, and Coventry City, are also facing battles for long-term survival.
Football is also a community asset. The introduction of shadow boards made up of fans who act as sounding boards for the board of directors at clubs like Chelsea FC and Cambridge United, and the new regulation in the English game, heavily based on a fan-led consultation process, shows there is also a genuine desire by fans to participate more widely in the running of football in England.
While not all clubs own their own stadium, the model using the grounds as leverage is a workable one which, despite needing a cultural change to implement, also offers fans more influence in the running of clubs. At the same time, it brings in much-needed investment. The ‘St Pauli model’ should be given more consideration in the English pyramid.