This coming weekend, Bayern Munich are set to win their 9th successive Bundesliga title. In the history of the league, no other club has won more than 5 titles, while Bayern has won 29. So what makes Bayern so dominant? Is it based purely on the tactics and players they sign? Partly, yes. But it’s also down to finances and history.
Quite simply, Bayern make more money than any of their rivals. Their yearly revenue is reported to be roughly around €634 million, even reaching €750 in the 2018-19 season before COVID-19. Success breeds success, but a compounding factor in this inequality is the way Bundesliga’s broadcasting contract has traditionally been shared. A new agreement will begin in time for the 2021-22 season. However, within the current deal, between domestic and international rights, only 25% of the latter is distributed on an equal basis across the eighteen Bundesliga clubs. The rest is performance-related. Clubs earn in accordance with their league position, and their track record across various competitions, including European ones. This means that clubs who have the ability to qualify for Europe year in and year out, automatically have a leg up on others. To a lesser extent – clubs are also rewarded for their production of under-23 players. However, most Bundesliga clubs stay consistent within a similar model of producing youth. Therefore, this extra factor does not allow anyone to gain a potential leg up over Bayern in revenue. The consequences are obvious. Bayern has a steady and progressively growing share of the revenue from broadcasting payments, and has steadily and progressively dominated the league.
An interesting angle to study this disparity is the historical background. Prior to 1998 German clubs were run as Nonprofit organizations. After 1998, clubs were allowed to function as Public Limited Companies with the only exception of the 50 + 1 rule. I.e. – The control of the club in voting rights remains with its members. The club has remained smart with its financial decisions and debt-free to date. They simultaneously adhere to the 50+1 rule, as only 3 companies own a minority share of the Bavarian club, accounting for 25% of the club.
This dominant financial system paved the way for a different club philosophy altogether. Not only are they capable of buying out talents from competitors within the league, but they can also buy talent from other leagues. They have typically replaced players and refreshed their squad at exactly the right time. One of the keys to the current run of consecutive titles, for instance, has been the ability to avoid transitional seasons, either with timely purchases or the development of the right player for a position of need. Bayern have always adapted to the strengths of their players to fulfill gaps, such as Joshua Kimmich’s move to central midfield, following the retirement of Bastian Schweinsteiger, and David Alaba’s move to centre-back following Mats Hummels’ return to Dortmund. In addition, the club has continuously employed ex-players in positions of authority, at the board level, and in the technical departments. The vast majority of people in power at the club know football, and know football very, very well. Thus, all competitors to the club either lack the resources or the expertise to compete with Bayern.
So, unfortunately for the other seventeen clubs, this winning spree might continue for Bayern Munich in the coming years. This may be a real threat to the culture of German football, that looks at the sport as a communal experience of togetherness and unity.
From a business and management perspective, Bayern is an outstanding case study. However, monopolizing the sport may not be ideal. Some room for competition always encourages fans to believe that their team can win it all and helps to make the game all the more beautiful. Having stated these facts, we appear to be in a classic dilemma of “Don’t hate the player, hate the game.” So what can be done to stop Bayern’s dominance from growing?
Well, like any organization, Bayern could in the blink of an eye face internal or environmental instability and lose large sums of revenue. Given the structure of the club and the people in charge, this however seems unlikely. The only other potential solution would be for clubs like Dortmund and Leipzig to continue to sign high quality players and close the gap on Bayern from a tactics and player performance perspective. Germany has a reputation for being one of the very best leagues in the world, but it remains hard for the likes of Leipzig and Dortmund to retain their top players, when the record-breaking title winners come knocking at the door. In other words, there doesn’t appear to be a solution to this enigma any time soon. But until one is found, Bayern look likely to remain defacto winners for years to come.