Bayern Munich 1.0: Good Enough for 27 Years

Uli Hoeness is general manager of Germany’s richest football club and owns a sausage factory near Nuremberg. When he started his managing career in 1979 he was just 27 years old. The club hadn’t won a Bundesliga title in five years. They had a turnover of 6 million Euros and were servicing a debt of 3,5 million Euros. For the time being their glorious days with three consecutive Bundesliga and Champions League titles under Franz Beckenbauer had been over. It would take Bayern Munich twenty-two years to finally claim the Champions League trophy again in 2001. In the mean time Uli Hoeness had succeeded in turning the club into one of the biggest, richest and financially most solid clubs in Europe, and they won a record number of Bundesliga and DFB Cup titles in the process. Hoeness is a man of principles, and those principles have been the key to Bayern Munich’s success. “Never spend more than you earn.” and “A business on credit is not my business.” is the philosophy that Hoeness has so far publicly propagated. The budget is planned accordingly. It only includes earnings for the first round of the DFB Cup and the group stage of the Champions League. It relies on a very humble prediction of the average attendance for home games (around 80% of the stadium’s capacity). Everything that surpasses those estimates automatically generates a profit for the club. All that money is kept on a fixed deposit account which is currently filled with something around 150 million Euros. Money that often whets someone’s appetite as Hoeness once recalled: “Again and again someone goes nuts and says: Now it’s time to go out and buy a really expensive player.” But the club stuck firmly to his rules. “It’s the beginning of the end of football.”, was Uli Hoeness’ comment on the 75 million Euro transfer fee Real Madrid paid for Zinedine Zidane back in 2001, and Bayern Munich surely would not follow suit and help to establish inflationary transfer fees.

Around that time they saw themselves more and more to be at a competitive disadvantage. The TV rights deals for the Bundesliga were never up to par with e.g. the English Premier League but over time the gap grew wider and wider. By now the new Premiership deal dwarfs the Bundesliga’s TV income. The big clubs in Spain and Italy, who are allowed to sell their TV rights individually, even dwarf what a Premiership club can earn. Add to that the odd rich benefactors and businessmen and Bayern Munich was forced to take a back seat in Europe. Hoeness, Rummenigge and Co. never grew tired of criticising the new pecking order and demanded salary caps and central marketing of TV rights for all European leagues to counter exploding transfer fees and salaries. The likes of Abramovich would surely be dealt with over time. “I’m curious about when Abramovich will lose his patience with Chelsea.”, Hoeness remarked just one year ago in his typically grumpy manner. So he might have thought that with a bit of patience as well on their side they could sit out the current madness. They acknowledged that they only had an outsiders chance of winning the Champions League for the time being.

At least Hoeness had found a clever way to maintain a dominant position in the Bundesliga. Instead of surrendering to the laws of the international market he decided to prey on the top players of his direct rivals in the league; with the positive side effect of weakening his competition. This earned some clubs the reputation of being Bayern Munich’s scouting division. To come to Hoeness’ defence it should be pointed out that other clubs – Schalke 04 most prominently but with little success – tried to emulate this strategy. Then there was the obligatory signing of some South American talent, and irregular cameo appearances on the European market as long as their transfer targets complied with their business ethos. That pretty much summarises Munich’s recent transfer strategy.

In 2006 Michael Ballack decided to sign a contract with Chelsea London in the hope to win the Champions League. Bayern Munich were confident that they could compensate the loss and played down Ballack’s role in the team over the years. Picking over the bones of Serie B bound Juventus to strengthen the squad was out of the question. The salaries for those players would have disturbed the whole pay structure within the team. Then there was the failed transfer of Ruud van Nistelroy. “If we had offered what United wanted, we would have got the player,” Uli Hoeness told the press “But we would have had to do things that go against Bayern’s philosophy.” The following season turned out to be their worst in the last ten years. Bastian Schweinsteiger couldn’t handle the job as creative play maker. Sebastian Deisler had to end his career after ongoing injury troubles. No strike duo from Makaay/Pizarro, Makaay/Podolski to Podolski/Pizarro produced satisfactory results. Felix Magath lost his job and his replacement Ottmar Hitzfeld didn’t manage to alter the course either. Bayern Munich had been very clearly relegated to the fourth place; UEFA Cup business. Uli Hoeness’ colleagues like Bremen’s Klaus Allofs got all the love from the media for bringing players like Diego to the Bundesliga. VfB Stuttgart’s very successful youth concept received praise and the bad performance of Munich’s own young prospects like Podolski was questioned. Some journalists even dared to predict that Munich’s dominance in the Bundesliga had been broken for good. They probably didn’t anticipate that Uli Hoeness could give up on some of his principles for a change. [The Story continues here...]

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