Volkswagen Group, the company behind Volkswagen, Audi and Porsche, is reportedly looking to offload its shares in Bayern Munich and another German football club due to current economic conditions.
FC Bayern Munich minority shareholder is considering selling its stake in the German football club, according to multiple reports.
VW Group, the operating and parent company of the automobile brands Volkswagen, Audi and Porsche, is considering the sale of its 8.3% share in Bayern Munich due to a wider plan on cost savings related to marketing costs.
The Bundesliga champions are not the only club Volkswagen is considering selling its stake in. The group, under its Porsche subsidiary, is also contemplating the sale of its 10.8% stake in VfB Stuttgart.
VW Group also has ownership stakes in two other German football clubs, VfL Wolfsburg and FC Ingolstadt 04. Reports have suggested the group is not considering offloading its shares in these clubs.
The group is reportedly weighing up the advertising impact of the removal of Audi branding at Bayern and Porsche advertising at VfB Stuttgart if it were to sell its shares in both Bundesliga clubs.
Audi has been a sponsoring partner of Bayern since 2009, acquiring its 8.3% stake in the club in 2011. Porsche’s 10.8% stake in VfB Stuttgart extends beyond ownership, which includes naming rights inside the MHP Arena and sleeve sponsorships.
Volkswagen is currently navigating a financial crisis as its profit margins and consumer product demand in Europe are declining.
Due to competition in China, US tariffs imposed on its products and increasing labour costs, the company is reportedly planning to close many of its branches in Germany as well as lay off up to 100,000 jobs.
Audi’s share in Bayern is worth $540m, while Porsche’s 10.8% stake in VfB Stuttgart is worth €40m but its overall investment package with the club is worth close to €100m.
Bayern Munich’s ownership structure
Bayern Munich’s ownership structure is controlled by its majority shareholder, FC Bayern Munich e.V., the fan members’ organisation that has a 75% stake in the club.
Audi, Adidas and Allianz all have an 8.3% stake each in Bayern as its fan members club, made up of a record of over 430,000 members, makes the final decisions on the operations at the club.
Bayern operate under German football’s 50+1 rule, designed so that club fan organisations are the majority shareholders of the club by at least 51%.
The rule prohibits corporate and commercial investors from being either the sole or majority shareholder in a German football club. A team can spin off into a separate corporate arm, but the club’s fan members organisation still retain a 50% + 1 rule in favour of establishing this and which external investment it can approve.
The rule came into force in 1998 to protect the traditions of German football clubs and mitigate corporate entities and individuals from solely taking over a club to either drastically change a club’s badge, colours, stadium, location, etc., or take out debt against the club which could ultimately lead it to financial administration.
