St Pauli have unveiled a unique route to become more competitive: they are going to sell their home to fans.
Beginning next month, the German club will start selling a majority stake in the Millerntor-Stadion to their own supporters after forming the first cooperative in football history.
At a packed meeting in Hamburg on Tuesday night, the club presented its plans to over 3,000 of its members. The response was positive, albeit curious. This is a radical solution, but then clubs like St Pauli are facing complicated problems.
They are European football’s pre-eminent left-wing club and were promoted back to the Bundesliga last season for the first time since 2011. Unlike in England, where promotion to the Premier League ensures a quick, substantial windfall, German football’s broadcasting revenues are not so generous.
It means that St Pauli are relative paupers in their new division. Annually, their wage bill this season is estimated to be around four per cent of Bayern Munich’s. On Sunday, following three straight defeats to begin the season, they earned a creditable 0-0 draw with RB Leipzig, who spend eight times as much on their playing squad.
The route to parity is blocked by legislative restriction and also by ideological design.
The legislation impacting St Pauli is German football’s 50+1 rule, which means that a controlling share (50 per cent plus one share) of any club must remain with members, preventing external investors from ever gaining full control. It protects clubs from falling into the wrong hands, but also deters the wealth that can transform a club’s future.
The ideological design element is to do with the club’s values and its commitment to social responsibility. St Pauli do not accept commercial income from gambling or cryptocurrency firms, among other industries, and that has helped preserve its identity, but at the cost of revenue, which impacts their ability to win matches.
But how much does footballing performance matter? It depends who you ask, which is why finding a compromise matters.
Oke Gottlich has been chairman of the club since 2014. Before the game against Leipzig, sat high in the Millerntor, he told The Athletic that the idea for a cooperative has been on the agenda for most of the last decade.
“Maybe six or seven years ago, we discussed the possibility of a cooperative for the first time, and how we might be able to set one up, learning from a team like the Green Bay Packers, and how it could impact football. We discussed the different ways in which it could happen. Should we maybe transform the whole club into a cooperative?
“Not everything was possible. St Pauli is a strictly membership-driven club and didn’t want to effectively outsource it (beyond the existing members). But we thought about which of our assets might be appealing for a cooperative, or to people who might want to join a cooperative, and we started discussing the stadium.”
The Millerntor is worth an estimated €60m (£50m/$67m). The plan is to sell shares in the new cooperative and then use the resulting revenue to purchase a controlling stake in the stadium — raising up to €30m in the process. The club will use those funds to pay off debt, including from the pandemic shutdown, and invest in its sporting infrastructure.
A four-person board, drawn from long-term supporters who live and work locally, has already been appointed and the share sale is due to begin in October. One share will cost €850 (£709/$948). While there are no restrictions on how many can be bought, multiple shares will not equal multiple votes, meaning that no shareholder can exert more democratic power than any other. A staggered payment plan will also be made available.
In addition to their voting rights, shareholders will receive a potential annual dividend, expected to be between 1-3 per cent. Owners will be able to sell their share in the future, but not for profit, only for the amount they originally paid.
But the influence is the compelling aspect. Members of the new cooperative will have the right to propose and vote on new business initiatives relating to the stadium, the level of annual dividend that they will receive, and the social, cultural and sporting activities that take place at the Millerntor. Essentially, they will determine what happens at the stadium whenever it’s not being used for football.
The club will continue to receive all matchday revenues, but the shareholders will determine the rate of the club’s rent and how much the cooperative earns from St Pauli.
“We assume that the members will be in favour of St. Pauli, not against us,” Gottlich says, “and so they could decide to either reduce the rent if we were in third or fourth division, or to increase it if we’re doing really well.
“This is a very good thing, because it gives the cooperative flexibility. People could say, ‘Oh, we need more money to try to qualify for Europe, so we’re going to stage a job fair or boxing fight, then reduce the rent and help the club to invest in other areas, in its youth academy, perhaps.’”
The cooperative, which is being promoted by the club using social media and videos such as the one below, will also vote on what to do with any surplus it earns, which potentially enables it to have an impact on the wider community. It will also hold elections for its own supervisory board.
This is an unprecedented step in football and so, naturally, there are questions — many of which are unanswerable at the moment. The new organisation does promise a lot of bureaucracy, so it remains to be seen how agile it can be. The fact that anyone can buy shares, rather than just existing members of the club, also raises a question: what happens if shares fall into the hands of those who do not have the club’s best interest at heart?
Gottlich says all potential purchases will be scrutinised. As a safeguard, all shareholders will need to submit a written application for membership of the cooperative, which will then be subject to the board’s approval.
“There are also certain red lines,” Gottlich explains. “For example, according to the statutes, if the cooperative wanted to sell the stadium to, say, Red Bull, then the club would have the right to say no.”
The statutes of the new organisation will also prevent it from interfering in the operational business of the club itself, or from making decisions that would harm St Pauli.
It is a dramatic step but, while not quite a trend, German clubs are increasingly in the mood for creative solutions to football’s inequalities.
Last year, the 2.Bundesliga team Fortuna Dusseldorf began a pilot scheme which saw fans admitted to three home games at their Merkur Spiel-Arena for free. Fortuna are a traditionally big club, but have fallen on hard times and, as a reflection of that, have in recent years only averaged half of their stadium’s 55,000 capacity.
The hope is that the ongoing scheme, named ‘Fortuna fur Alle’ (‘Fortuna for everybody’), will create a virtuous cycle of media and commercial interest in the club. All three games sold out in the first year and the club have expanded the scheme to four games this season. While it remains too early to judge it a success, it has — initially at least — drawn a positive response for original thinking.
St Pauli’s initiative is more elaborate. If successful, other departments within the club could seek admittance into the cooperative, too, potentially expanding its reach across — for example — the women’s football division, the youth facilities, the triathlon department or the Pipes & Drums section, and so on, throughout the club’s network.
Should new training pitches be built? Should the stadium’s corners be filled in? If the answer is yes, members will vote — electronically — for the board to procure financing and construction options, and then vote again on whether to accept them. Even for a club as habitually democratic as St Pauli, these are steps into football’s unknown.
But they are steps that Gottlich feels compelled to take.
“It makes sense,” he says, gesturing through the windows at the stadium below, “because this is very symbolic. It’s the home of the people, where we call come together for games, and it’s part of everybody’s community.”
(Top photo: Fans of St Pauli; by Stuart Franklin via Getty Images)
