Hamburg to ditch tradition in search for success

Posted by Uli Hesse

German clubs can be deceitful beasts. A few months ago, an English newspaper ran a piece on the rise of Bayern Munich and accompanied the story with two images, a photo of chairman Karl-Heinz Rummenigge and the club badge. But it was the wrong badge.

Bayern Munich's badge no longer carries EV, to denote it is a
GettyImagesBayern Munich's badge no longer carries EV, to denote it is a "registered club".

Granted, the mistake was easy to make. The newspaper printed the familiar red circle with the white lettering and the blue and white Bavarian rhombus inside. But the inscription read FC BAYERN MÜNCHEN EV and that's two letters too many.

In German, EV stands for "registered club" and denotes a non-profit organisation set up for the common good and run by its members. In February 2002, Bayern's members decided to make their professional football division separate from the parent club and turn it into a limited company. That's why the letters EV had to disappear from the crest — under German law, a company cannot be a Verein (a club).

You may think this is just a technicality, but it's not. On Sunday, more than 7,000 Hamburg members -- the absolute limit of what the assembly hall could hold -- congregated at Germany's oldest convention centre, situated less than a mile from the famous Outer Alster Lake, for the club's annual general meeting. It lasted for no less than 11 hours and five minutes and it was basically about one thing only, the letters EV.

At the time of writing, there are only six Bundesliga clubs that still operate under the traditional German club structure: Augsburg, Mainz, Schalke, Nuernberg, Stuttgart and Hamburg. The others have turned their professional football arm into companies. While the exact model varies from club to club, they are all businesses run by businessmen.

In theory, this group -- let's call them the Corporate Dozen -- still has to answer to their members, because the 50+1 rule says that the majority of the football plc has to remain in the possession of the parent club. In practice, though, the companies are autonomous. As the German sportswriter Rainer Franzke put it last June: "The influence which the members exert upon the professional division is next to nil. They can still elect the president, but he only presides over the EV and is in charge of the amateur department."

This does not mean that the other group -- let's call them the Traditional Six -- is operating totally according to the principles of grassroots democracy. But, broadly speaking, most still use a system under which the club's members elect who sits on the supervisory board, which in turn appoints the board of directors.

Hamburg, the club known to Germans as HSV, set up such a supervisory board as early as June 1996. Eleven men or women sit on this board. Eight of them are elected by the entirety of the club's members. The remaining three are appointed by the senior council (representing older members), the amateur council and a supporters' organisation.

Over the last couple of years, more and more people have become convinced that this supervisory board -- and the power it wields -- lies at the core of the club's many problems. According to kicker magazine, Joerg Schmadtke travelled to Hamburg last May to replace the sacked Frank Arnesen as sporting director but shied away from the job when he learned that the supervisory board -- made up of, among others, an actor, a journalist, a mathematician, a publisher and a hospital manager -- had to ok every expenditure that exceeded 500,000 euros. Which meant, for instance, every single player salary.

Hamburg chairman Carl-Edgar Jarchow
GettyImagesHamburg chairman Carl-Edgar Jarchow

Obviously, getting 11 people who are not even experts in this field to sanction every major deal is not a very effective way of conducting business. And it's not as if the supervisory board's powers have helped keeping finances in check. Far from it. Forbes Magazine's annual list of the most valuable football clubs always finds Hamburg in the Top 20, sometimes even Top 15, but that doesn't mean the club is rich.

During the AGM on Sunday, Hamburg's chairman Carl-Edgar Jarchow announced that HSV lost 9.8 million euros last year and is now 100 million euros in the red. This situation means that the club is often at the mercy of local billionaire Klaus-Michael Kuehne, who has gifted or loaned Hamburg a lot of money over the years. On Sunday, a member asked the board of directors how much HSV owe Kuehne and marketing expert Joachim Hilke replied that the sum currently stands at eight million euros.

This in itself may not be a problem, but the fact that Kuehne has become such an important man at the club without holding any post means there is one more person -- in addition to the four men who are on the board of directors and the 11 members of the supervisory board -- who loves to talk to the press about things that should be discussed behind closed doors. For instance in September, Kuehne called Hamburg sporting director Oliver Kreuzer "a third-division business manager" and publicly demanded he be replaced by Felix Magath.

However, football being what it is, all of this -- the backbiting and the mismanagement, the tumult and the shouting, the chaos and the petty egotism -- would be excusable if only Hamburg were successful. But one of the biggest and most tradition-laden clubs in the country has won zilch in the last quarter of a century.

And that, really, is what led to the 11-hour debate on Sunday, at the end of which roughly 80 percent of the Hamburg members in attendance voted in favour of an initiative called "HSVPlus". It aims to end the days of the EV by turning the professional football division into a limited company, following the models used by Bayern Munich and Eintracht Frankfurt, and then selling about a quarter of this business to outside investors.

The great irony is that the club's fans and members have decided to render themselves largely impotent at a point in time when an increasing number of supporters from outside Germany finds the traditional German club model more and more attractive. Almost exactly a year ago, the BBC's website asked "Is fan-ownership the answer to football failures?" and back in November the Guardian carried almost the exact same headline: "Is fan ownership the answer to struggling football clubs?"

Hamburg captain Horst Hrubesch holds up the Bundesliga shield in 1983, the last time they were German champions.
GettyImagesHamburg captain Horst Hrubesch holds up the Bundesliga shield in 1983, the last time they were German champions.

This can only be explained by how tired and frustrated, how drained by two and a half humiliating decades, many Hamburg fans are. They can accept that really big clubs like Bayern and Dortmund have won a lot of silverware during this time. And they can probably even accept that clubs which enjoy financial advantages, such as Wolfsburg, have lifted trophies. But it must grate that even teams like Kaiserslautern, Stuttgart or rivals Bremen have enjoyed periods of success since the beginning of the 1990s, while proud HSV have waited in vain for their own resurgence.

Whether or not a new club model is the answer to all this remains to be seen. Stuttgart, after all, managed to win the league as one of the Traditional Six. Four other proposals and initiatives were presented to the members on Sunday. Some were similar to "HSVPlus", some were entirely different and tried to preserve the EV. But it was Ernst-Otto Rieckhoff, a former oil and gas company executive, who convinced the members of his plan.

Rieckhoff said experts calculated that the club could earn 100 million euros by selling a quarter of the shares and called it "total baloney" that joining the Corporate Dozen would mean the end of member participation.

Rieckhoff would have needed only a simple majority to defeat the other proposals but got a lot more. Still, "HSVPlus" has not yet won. Sunday's vote was only the first step. It merely mandated the board of directors to prepare a detailed plan for turning the professional football division into a company. Once the board has done this, it will have to convene an extraordinary general meeting. At which "HSVPlus" will then need a three-quarters majority to become reality. Obviously, a repeat of the 79.4 percent it garnered on Sunday would be enough, but a lot can happen over the next few months.

But whatever happens during those weeks, one thing is certain. Hamburg will not have to change their crest. It is one of the few club badges in the world that has no letters or numbers whatsoever.

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