By Ben McFadyean.
A veritable sleeping giant of German football, TSV 1860 München, won’t receive the required license for the 3. Liga from the German Football Association (DFB) for the 2026-27 season, the Bavarian club has confirmed today.
The club missed the deadline to provide proof of liquidity and couldn’t fulfil a financing commitment from leading investor Hasan Ismaik and his associated companies.
According to the club’s statement, 1860 München’s management is now working with as-yet-unnamed insolvency law experts and consultants to “maintain orderly business operations, protect the company’s rights and interests, and develop a viable path forward”.
“I regret shareholder HAM International’s failure to honour its financing commitment,” said Manfred Paula, managing director of 1860 München. “Until the very end, I was convinced we could find a solution in the interest of the professional football club. Unfortunately, that didn’t happen.”
“We’ll now devote all our energy to assembling a competitive squad for the upcoming season in the Regionalliga Bayern,” he added, as the club drops into the fourth tier.
The club’s management, however, have a herculean task not just to deal with the contractual situation, to balance the books, and to ensure the long-term survival of the popular club.
A very painful fall, which could result in insolvency
The fall is painful, from 3. Liga (third tier) favourites ahead of 25/26 to be officially demoted to the fourth tier Regionalliga.
According to the best-selling German newspaper, Bild, the club’s main sponsor, financial services company Die Bayerische, who have invested a reported €15m in the club in the last 10 years, has today also announced that they will withdraw their sponsorship.
According to the same report, the club, whose former players include Julian Nagelsmann, Rudi Völler, Davor Šuker, and Thomas Häßler, still need around “€1 million to secure their Regionalliga license—failing to do so could push 1860 München into insolvency.”
The one-time Deutsche Meister and 1965 UEFA Cup Winners’ Cup finalists have been through a pattern of repeatedly struggling to meet licensing criteria since their fall from the 2. Bundesliga in 2004.
This includes most notably in 2006/7 when they lost their joint stake with Bayern in the Allianz Arena for a token €11m payment just to cover running costs.
The club still do not own their own ground and to date play at the City of Munich-owned stadium at the Grünwalder Straße.
In 2011, Ismaik was also forced to raise €11m to ensure the club met the licensing criteria.
In 2017, the club were force-relegated two divisions down from the 2. Bundesliga, with reported debts of €28m, due to being unable to meet the licensing criteria, which is similarly now repeated in 2026.
Former captain and top striker, formerly also of FC Augsburg, Sascha Mölders, speaking to the TZ newspaper this week, voiced what many fans have been feeling in the run-up to this crisis, describing the dismal situation as baffling and “unbeatable in terms of embarrassment”.
There appears to be an ongoing conflict between the leading investor and the fan base. At almost every home game, prominent anti-Ismaik banners are displayed in the supporters’ stand. Even Ismaik’s representatives, such as Merchandising director Anthony Power, are regularly the target of fan protests, including the ongoing “Freiheit für 1860” (Freedom for 1860) campaign by the Ultras.
The licensing system works for the majority of clubs in Germany
Whilst 1860’s situation is a warning to other clubs, German football governance has built its reputation on stringent licensing requirements; only a handful of clubs have been forced into relegation:
- Third-tier Türkgücü München in 2022
- Third-tier MSV Duisburg in 2013
- Fourth-tier Wuppertaler SV in 1985
- Bundesliga side Hertha Berlin in 1965
Schalke, BVB (in 2005), and Arminia Bielefeld have sailed close to the edge due to debt levels. Arminia Bielefeld was also forced into relegation in 1971-72 on different criteria amid an unprecedented betting scandal.
What truly supports the German system is a striking statistic: while 49 professional English clubs have gone into administration—including major forces like Wimbledon, Portsmouth, Leicester City, Southampton, Derby, and Leeds United—since the founding of the Bundesliga in 1963, only one major German club, FC Kaiserslautern in 2022, has entered administration. Other German clubs affected include Alemannia Aachen, KFC (formerly Bayer) Uerdingen, Wattenscheid 09, and Rot-Weiss Erfurt.
The German football licensing system explained
The German football licensing system is what underpins the stability that ensures clubs do not go out of business.
The system is a stringent, multi-layered regulatory framework designed to guarantee the financial stability, structural integrity, and competitive fairness of German professional clubs.
The system relies on six core pillars outlined below:
The Liquidity Gap Test
Clubs must submit economic forecasts proving they have enough cash or guaranteed revenue to cover all operating expenses, transfers, and salaries for the entire upcoming season.
Squad Cost Cap
The DFL caps squad costs (player wages, transfers, and agent fees) at 70% of total football revenue, aligning with UEFA’s Financial Sustainability regulations to prevent runaway inflation.
Consequences
If a club runs a deficit, the DFL imposes strict “conditions” (e.g., must raise capital by a certain date) or “obligations.” Failure results in points deductions or immediate denial of the license, which triggers automatic relegation.
Member Control
To secure a license, a club must legally protect itself from hostile or predatory takeovers.
The parent club (the democratic members’ association) must retain at least 50% plus one vote of the voting rights in its professional football company.
Investor Restrictions
External commercial investors can buy up to 100% of the financial equity but cannot hold a majority voting stake, preventing them from overriding fan interests.
Academy Requirement
Every club in the top two flights must construct, fund, and run an elite youth academy (Leistungszentrum).
Staffing Standards
Academies must employ a minimum number of full-time, qualified coaches (holding UEFA B to Pro licenses), along with medical teams and pedagogical support staff, to ensure holistic player care.
Infrastructural and Technical Requirements
Stadium Mandates:
Bundesliga stadiums must have a minimum capacity of 15,000 (with at least 8,000 seats).
Under-soil Heating:
Clubs need a fully functioning pitch, under-soil heating, and modern floodlighting.
Media
Clubs must have highly specified media/broadcasting facilities to secure licensing.
Sustainability Guidelines
The DFL embeds holistic, multi-dimensional sustainability rules directly into its licensing criteria. Clubs are evaluated across three dimensions:
Environmental
Mandatory greenhouse gas footprint measurement, annual consumption audits, and implementation of green mobility/traffic strategies for fans.
Social and Stakeholder
Clear operational focus on diversity, accessibility, and strict anti-discrimination codes of conduct for all club employees.
Personnel and Administrative Criteria
Clubs must prove they have the institutional manpower to operate professionally.
Qualified Executives
Teams must employ full-time, independent specialists in key corporate roles, including a CEO, CFO, Media Officer, Security Officer, and Fan Relations Liaison.
The Regionalliga v 3 Liga Disparity
The Regionalliga Bayern, where 1860 will play in 26/27, illustrates the nature of the challenge the club’s management has ahead most starkly. The entire league’s squad value sits at just €41m—1860 München commands a squad of €9.25m, which is 12 times the combined value of the five lowest-valued squads together.
For perspective, 2021 Regionalliga Meister SpVgg Bayreuth and similar clubs average just €0.6m in squad value.
On a positive note, one of Germany’s most famous clubs—albeit one struggling with financial challenges for decades—will next season be a prized fixture for fourth-tier Bavarian clubs that averaged 900-1,000 fans per game (Transfermarkt), compared to 1860’s 15,000 in 2024/25.
The historic club, already suffering from financial instability, will now play at grounds across Bavaria with capacities as low as 3,000, and average attendances often in the hundreds—six participating clubs currently fall into this category.
Much like Glasgow Rangers when they went into administration in 2012 and were forced to play in the third tier, 1860 will face small-town clubs including TSV Buchbach, DJK Vilzing, and SpVgg Ansbach.
The travelling support will, however, be a major financial windfall for those local clubs, but for 1860, this demotion could genuinely threaten the club’s long-term survival.
The only way forward for manager Markus Kauczinski’s team is for Rangers to bounce straight back up, but there are hard times ahead.
Drastic cuts ahead
The decision-makers in Giesing, where Munich’s second club is based, will now be forced to drastically slash their overheads.
That will inevitably affect leading players, including former Germany international Kevin Volland and former Mainz and Heidenheim striker Florian Niederlechner.
Salaries will be a particular challenge, with half of the 1860 squad currently earning over €500,000, including international players Sigurd Haugen, Jesper Verlaat, Thore Jacobsen, and Max Christiansen.
The average salary in the division is €24,000, but some younger players—akin to apprentices in the UK system—can earn as little as €500 per month under the German ‘mini job’ scheme. Again, this is unimaginable in League 2 in England, where the average salary is £70,000-140,000 (€80-150,000) per annum. It also shows the pressure English clubs below the Premier League are under.
German financial stability vs. English debt
Perhaps the most poignant and telling contrast is that the total debt load across the first three tiers of German football is, according to the latest DFB figures (the national federation), €2.66bn.
This compares incredibly favourably to England, where the FA reports a staggering almost three times that across the English equivalent at £7.1bn (€8.2bn).
Profitability again compares under the German licensing system favourably, 13 of the top 18 Bundesliga clubs made a profit last season, compared to just 4 in the Premier League. Bayern Munich and BVB, for example, posted profits of €27.1m and €6.5m in 24/25. BVB have made a profit in all but 1 of the last ten seasons.
In the Championship, only 3 clubs made a profit, while in the 2. Bundesliga: 15 clubs finished in the black according to Transfermarkt.
In a time of economic uncertainty and low growth in the economies, these numbers are critical for football clubs; the numbers also prove the German licensing system works. It’s a masterclass in good governance—its emphasis on financial stability has created a consistently well-run environment where few clubs collapse.
The vast majority of German clubs have been profitable for years, which is genuinely admirable, and what’s more, with the cheapest tickets in European football.
What next for 1860?
The widely reported sale of Hasan Ismaik’s 60% controlling stake in 1860 Munich to the Swiss family holding company of Wilfried Thoma in July 2025 collapsed shortly after it was announced.
Ismaik ultimately backtracked on the deal, citing a lack of financial reliability and due diligence concerning the proposed Swiss buyer, with many analysts, however, regarding Ismaik’s position as showing the lack of credibility seen so often in his tenure.
Whilst the liquidity position of Ismaik is not known in detail, the lead investor’s unwillingness to provide sufficient financial backing appears to be, based on past seasons where he’s held out until the last minute before providing funds, to be yet another power play by the Jordanian investor—what he hopes to achieve this time by allowing the club to be force relegated, however, remains unclear.
Could this be an opportunity for another takeover?
1860 Munich CEO Robert Reisinger was forced out of the club in a well-documented power and bitter struggle with lead investor Ismaik earlier this season.
When asked about the situation, Reisinger told the author: “For me, this situation is over. I did what I could for the club over a 15-20 year period. The board, as it stands, is of no interest to me. I’ll attend games when they interest me, but I’ll only spend time in situations, and with people, who are good for me.” That, for now, appears to close the door on a return to the club by the well-known management consultant who would seem an obvious choice to support in finding a solution based on past experience.
The side with the reputation for being the most popular with Munich locals might at least take inspiration from one former Bundesliga side, Bochum-based Wattenscheid 09.
After the loss of main sponsor textile magnate Klaus Steilmann, the Schwarz-Weissen were forced into bankruptcy in 2019 with reported debts of €1.9m and dropped as far down as the sixth tier.
Finally, after years of decline, and fundraising initiatives by the local community and fan groups, including buying extra season tickets, the team, managed by Przemysław Czapp, whose home throughout has been the 16,000-capacity Lohrheidestadion, were finally promoted back to the Regionalliga this past weekend.
Whilst bankruptcy would be an extreme solution for 1860, the examples of Glasgow Rangers and Wattenscheid 09 and their return to success are there for all to see. One way or another, a new direction, one that provides real sustainability, needs to be found for the 1966 Deutsche Meister.
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