Football Governance - Culture, Media and Sport Committee Contents


Written evidence submitted by Hamburger SV Supporters' Club

Submission sent by Hamburger SV Supporters' Club, established 28 March 1993 and now a central figure in the governance structure of Hamburger Sport-Verein e.V.. As of November 2010, we have 54,416 members, including 500 volunteers who aid the day-to-day running of the football club in various capacities. A history and details about what we do are both provided below.

Hamburger Sport-Verein e.V., a multi-sport club based in Hamburg, and its football department is the oldest club in Germany. Since 1887 the club has been an ever-present in the various incarnations of German football—currently it is known as the Bundesliga. Before describing Hamburg Supporters' Club and the work which they do, some general facts about the Bundesliga and the 2. Bundesliga—specifically the way in which they regulate member clubs—may be of use.(1)

The ultimate governing body in German football is the Deutscher Fußball-Bund (DFB), formed in 1900 as a registered members' association (e.V.). The top two divisions (Bundesliga and 2. Bundesliga) are controlled by the Bundesliga, and all 36 teams are members of the Ligaverband e.V., or League Association. This is an independent member of the DFB, but is also a registered members' association. It is therefore governed by the same statutes and regulations. For the purposes of this submission, two forms of regulation are particularly relevant, namely the rules governing ownership structure and the licensing system. Clubs can be structured in the following four ways:

(1)  Eingetragener Verein or e.V.: These registered members' associations were the only way which clubs were allowed to structure themselves prior to reforms made in 1998 (which, as a response to the increasing commercialisation of European football, allowed the professional football divisions of clubs to be run as external limited companies). They are not-for-profit organisations, owned by their members and managed under a strict principle of transparency by democratically elected representatives. All revenues generated must be reinvested in the club. Examples: Hamburger SV, VfB Stuttgart, Schalke 04.

(2)  Aktiengesellschaft (AG): A public limited company that is often, but not always, listed on the stock exchange. Examples: FC Bayern, Eintracht Frankfurt.

(3)  Gesellschaft mit beschraenkter Haftung (GmbH): A private limited liability company with a more corporate structure. This feature is balanced by a stipulation that the football club owns 100% of the shares. Examples: Bayer Leverkusen, TSG Hoffenheim 1899.

(4)  Combination of a limited company with a Kommanditgesellschaft (KG) (limited partnership) or a Kommanditgesellschaft auf Aktien (aA) (stock company) (GmbH & Co KG aA/GmbH & Co KG): A new legal form of private partnership limited by shares with a limited liability company as a general partner, sometimes with the addition of elements from a joint stock company. This has become popular amongst football clubs, examples include Borussia Dortmund and Werder Bremen.(2)

Whilst all four options have unique characteristics, they are all strictly monitored, and a central part of the scrutiny process is the "50 + 1" rule. This stipulates that the capital companies which run professional clubs can sell up to and including 49% of their shares, but that a 50% plus one share majority must always be owned by the parent club—ie the members' association. This ensures that private interests (such as those of creditors, banks, or potential takeovers) are always subordinate to those of the members—ie the supporters. It also ensures that supporters are able to have a voice at every level of administration, and cannot be marginalised simply for asking inconvenient questions.(3)

Sitting alongside the regulation of ownership is the licensing system that all clubs competing in the Bundesliga and 2. Bundesliga are required to go through on a seasonal basis. Endorsed by all members and developed on a collaborative basis by the various governing bodies, it has ensured universal solvency, without exception, amongst German clubs over the last 40 years. Each club applies for a licence first to the DFL, then the League Association, by submitting audited economic data for scrutiny. If a club is refused a licence and all avenues of appeal are exhausted, then the club is prohibited from competing in the forthcoming season. For a club to be awarded a licence they must demonstrate a) that they are solvent, and b) possess positive liquidity. These two requirements are assessed using a wide range of data, relating to incoming payments, payments-out, and financial projections for the forthcoming season. The resulting liquidity forecast centres around three conditions, without which a licence cannot be awarded:

(1)  That all payment obligations can be met at all times.

(2)  That regular match operations can be guaranteed at all times.

(3)  There are plans in place to counter any financial problems that may arise.

There are four possible outcomes from the licence application process, which range from a full award, to an award with certain conditions, to a refusal. As previously mentioned, clubs are free to utilise a regulated appeals process. In addition to the pre-season application, clubs are also required to submit accounts during the season, to ensure that positive liquidity is maintained throughout the campaign. Any discrepancies can result in sanctions: fines, deductions of points, a transfer embargo, etc. As well as drawing up contingency plans for financial trouble, clubs also have to hand over a security deposit to the DFL, which will be used to pay its members of staff. All of the regulations relating to ownership and licensing are recognition that football clubs must act as responsible entities, and that reckless spending cannot be a substitute for a long-term business strategy geared towards stability, not merely short-term success.(4)

Having outlined the limitations which German football clubs operate under, we can now narrow our focus to Hamburger SV. Formed in 1887 when Der Hohenfelder Sportclub and Wandsbek-Marienthaler Sportclub merged, the club was initially known as Sportclub Germania zu Hamburg. The current name did not emerge until after World War One, when Sportclub Germania zu Hamburg merged with two other teams of the city, Hamburger FC (which in 1914 changed its name to Hamburger Sport-Verein von 88) and FC Falke 06. Upon the foundation of Germany's first professional league in 1963, Hamburger SV were one of sixteen clubs invited to participate in the first season, and have competed in the top flight ever since. The club's golden age took place between 1976-87, during which time they won three Bundesliga titles and reached two European Cup finals, winning one in 1983.(5)

However, by the late 1980's the club had stagnated, and the low point came in the 1991-92 season, finishing on 11th place. HSV Supporters' Club was founded on 28 March 1993, with four initial aims: to raise the level of influence wielded by the fans, to participate in club activities, to mould club policy for the good of its members and supporters, and to maintain the comradeship amongst HSV supporters. From the formation with 36 initial members, to its current membership of over 54,000, these core aims have always been used as reference points in the development of the HSV Supporters' Club philosophy, which is as follows:

(1)  We want success, but not at any price: Sport must be more important than profit. We earn money in order to play football, we don't play football in order to earn money! Tickets must be affordable for everybody.

(2)  We want to be in control of our own destiny: 100% member-owned. No billionaires. No companies. No separation of the professional football team from the rest of the club.

(3)  We want and support a strong membership: Members' rights must always be guaranteed. Democratic structures. Active members.

(4)  We are proud to be a multi-sport club, not just a football club.

(5)  We stand behind tradition, fan culture and fan activities.(6)

This philosophy, combined with Hamburg's status as a members' association (e.V.), has ensured that the supporters are fully integrated in both the formal governance structure and the more informal procedures that are used to run the club on a day-to-day basis. As mentioned above, members' associations are not-for-profit organisations, owned by their members, and managed by representatives elected by their members. The centrality of members' involvement is demonstrated by the following bodies, all of which have important responsibilities in the governance of HSV:

(1)  General Meeting of Members. This is the highest decision-making body within the club. Only members aged 18 or older are allowed to vote—younger members can be represented by delegates.

(2)  Supervisory Board (SB). This consists of twelve members, eight of whom are elected at the General Meeting of Members and four of whom are delegates selected by the Supporters' Club, Amateurs, Seniors and HSV Ochsenzoll (which manages the club's training and youth facilities) respectively. A term on the SB runs for four years. The SB selects the board of directors and (if necessary) can remove them from office. The SB is also responsible for approving the budget presented by the board of directors, and controls the way in which the Board of Directors do their jobs, assigning responsibility for day-to-day operations, and regularly monitoring the management process.

(3)  Board of Directors (BoD). This consists of the Chairman, the Vice-Chairman, and up to three additional members, selected on three-year paid contracts by the SB. One member will be appointed Director of Membership Affairs, this is the only paid position which is elected by the members. The BoD oversees the day-to-day affairs of the club.

(4)  Department of Supporting Members/Supporters' Club. An annual meeting is used to elect a board of five volunteers, for three-year terms.

(5)  Members. To join the HSV Supporters' Club, fans are required to join HSV, reflecting the shared purpose of the two entities. The current membership fee is €48 per year—this is split between the club and the Supporters' Club. All members have the right to vote, the right to apply for all board positions, the right to put forward petitions at members' meetings, the right to use club property, and the right to participate in club activities.

(6)  The Honorary Board. This consists of seven club members over the age of 35, having been members for at least 10 years, they are elected directly at the General Meeting of Members. They act as a go-between in disputes and hold the chair at some elections.

(7)  The Board of Seniors. This leads the HSV "Community of Seniors", which consists of anyone who has been a member for more than five years and is at least 35 years of age or older. Their main brief is to maintain tradition and unity within the club.

(8)  The Amateurs Board. This is elected at the annual meeting of all non-professional sports departments.

In the most recent General Meeting of Members (which took place on 9 January 2011), four positions on the Supervisory Board were filled. The four elected candidates were drawn from different walks of life (one was an actor, another an economist) but they shared one common characteristic: they are members of the Supporters' Club, and thus were eligible for election onto this crucial organ of HSV. This codified system of accountability, which extends to the highest echelons of the club, is a demonstration of how effective the e.V. structure is in safeguarding against excessive individual power; and also the level of integration into the club that is guaranteed to members.(7)

As well as allowing for a more transparent form of governance, the e.V. structure has also allowed HSV to maintain and develop its financial health. The club is currently 11th in the latest Deloitte Football Money League, which ranks clubs by revenue generated from football operations—a method generally considered to provide the best comparative assessment of financial strength. With revenue of €146.7 million, HSV is the second-highest ranked German club, only behind traditional giant FC Bayern. It sits comfortably ahead of Schalke 04 (€124.5 million), Werder Bremen (€114.7 million) and Borussia Dortmund (€103.5 million), the other three German clubs ranked in the top 20. Of these three, both Bremen and Dortmund are structured as GmbH & Co KG aA's, yet on the evidence from Deloitte, it could conceivably be argued that the e.V. provides not only a more accountable structure, but one which generates greater revenue.(8)

HSV Supporters' Club is led by a board of five volunteers, supported by a full-time manager and fifteen additional employees, with accounts available for examination at each AGM. However, the main body of its work is carried about by the hundreds of volunteer members, who are drawn from the general membership scattered around Germany. The Supporters' Club has contacts in every major German city. The Supporters' Club meets with the Board of Directors on a regular basis to discuss the issues affecting both the club and its supporters. Through a history of sensible, constructive dialogue, the Supporters' Club has ensured that no fan-related decisions will be taken without their input and consultation. Since their foundation, the Supporters' Club have spearheaded many changes and/or adaptations that have been of benefit to both, the club and the supporters. The first of these came in the late 1990's, when the club began construction on a new stadium. The Supporters' Club lobbied hard for the inclusion of standing areas in both the North and the South Stands, as well as cut-price seating across the ground. The Supporters' Club also take a prominent role in consulting with the club over season ticket prices—a permanent reduction for members has resulted. The club's various Ultra groups are also included in the dialogue, with large-scale choreography displays encouraged and funded by members.(9)

As well as working alongside the club on an administrative level, the Supporters' Club strives to ensure that members are integrated with the club beyond simply attending matches every other weekend. A centralised system for attending away fixtures has been implemented, with members able to purchase tickets, means of transport, etc. through the Supporters' Club. This has had major implications for wider issues surrounding fan safety in Germany, with the HSV Supporters' Club part of an ongoing consultation process between the football authorities and fan groups. The development of the club's museum was initiated by the Supporters' Club, who remain amongst the main sponsors. In terms of the wider community, some amateur divisions of HSV (which include boxing, rugby and baseball) are funded by Supporters' Club members, and integration projects are developed on a regular basis. The supporters also represent the club whenever the city hosts a major event—parades, marches, the 2006 World Cup, etc. The vast majority of these activities are detailed on the exhaustive website (www.hsv-sc.de) which is increasingly becoming a portal for HSV supporters worldwide, and not just in the city itself. There is also a quarterly fanzine, supporters news, which is made up entirely of fan contributions, debating issues affecting HSV and football in general.(10)

This exhaustive documentation of the activities that the HSV Supporters' Club has been engaged in since 1993 hopefully reflects the all-encompassing nature of the group. As well as providing a collective voice for supporters of the club on traditional "fan" issues such as ticket prices and safe standing, they have become indispensable in the day-to-day running of Hamburger SV. They are an institution with the interests of its members and their community at its heart, providing a legal, political and social framework which has facilitated positive development in terms of financial stability and on-pitch success.(11)

February 2011


 
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© Parliamentary copyright 2011
Prepared 29 July 2011