FC Bayern Munich

Germany's Most Successful Club

Bayern Munich dominates German club football. Now one of the world’s most successful clubs and biggest sporting brands. The trophy cabinet is packed. They hold a record twenty five German titles. And 17 national cups. They’re five times European champions and FIFA World Club Cup winners in 2013. This is their home ground for seventy five thousand seater Allianz Arena opened in 2005. It cost 340 million euros to build. It’s hosted a Champions League Final and World Cup games.

 

The club itself made 500 million euros last year. That’s the third biggest in sales when it comes to a club in global football. It also has been in the black for 22 consecutive seasons. That’s an exception not the norm in world football. Last year Bayern made 20 million euros in profits a fifth of that came from selling merchandise.

 

Each year they sent around one point seven million replica shirts. That’s more than. All the other Bundesliga sites combined. They gave us behind the scenes access as we spoke exclusively to German football legend and Bayern Munich Chairman Carl Heine through Monica as well as Spanish. World Cup winner shabby along. On this week’s Business of school. Over 300 appearances. At one hundred and sixty two goals for fine beer.

 

Twice the European football of the. Ninety. Five international caps and forty five goals for West Germany.

 

Evans China behind ruminate.

 

He’s one of the biggest names in European football. Now he’s back as chairman. Of the club where he made his day English plays for him.

 

I sat down with him at the club’s headquarters in central Munich and don’t want to lose. The. Roots. Of football. For an exclusive interview on buying strategy.

 

Mr. Romantic. Thank you very much for talking to us here at Bloomberg. Let’s start with the business side of by Munich. Last financial year you surpassed half a billion euros in revenue for the first time.

 

You have little debt. You have local investors. How can you sustain this. What seems to be forever rise in revenues. How can you sustain this model.

 

So first of all I believe it is very important. Having success on the pitch and then we can work about the success.

 

Of the pitch. I believe Bayern fortunately was in the past 30 40 years very successful on the pitch beginning in the 70s when we had the big guys like France Beckenbauer get moolah said Meyer and so on.

 

On the pitch yourself and this team was very successful winning three times in a row. The Champions League at that time and there was a basis the roots of the collapse. Of our club and then time by time we was able to to have a kind of continuity on the pitch and and we worked especially in the past 10 years in partnerships what we can do. To have a stabilise economy basis and so we. We can win partners like Adidas at 12 13 years ago to be shareholder in Bayern Munich company.

 

 Because we had the big project the Allianz Arena to build up. And in the meantime we we went to more important partners. Like Audi and Allianz Insurance.

 

To be shareholder of Bayern Munich and that. So we have a strong basis on the pitch but I believe a strong basis as well off the pitch so we can be very optimistic looking in the future.

 

If we split revenue into three compartments that match matchday broadcasting and commercial Match Day you lag behind four teams in Europe which leads to the question could you will you Why don’t you raise ticket prices because to be a season ticket holder by Munich kids it’s incredibly cheap vs. Premier League teams in England. Yeah. Should you could you Why don’t you raise ticket prices to to raise your matchday revenue.

 

So we are we. As you said it’s right. We are much cheaper than our friends in England Italy Spain. France as well. So from the big fights we are the cheapest not just by on alone.

 

The whole leak is relatively cheap in comparison to these countries. The problem of the problem is is a kind of philosophy I would say. So we have the philosophy that the ticket price is on a let’s let’s call it a social basis.

 

So we want to care about that. If you go to Bayern Munich that at the end is not depending just by you or your pocket. That you are able to to get entranced and in the stadium or not. So we have still I would say rich prices regarding go allowances or business seats where you pay for it. For instance twelve thousand euros per season. But then we have as well a very social basis that the stance just costing 150 euros per year for 70 games 17 games. So we try to have let’s say let’s call it a social basis between the rich.

 

 And unfortunately not the rich people.

 

That we care about that.

 

I would say it is a kind of filthy philosophy as well that the we don’t want to loose off the roots of football. Football I believe is is belonging to fans. And the fans like to go into stadiums and so we want to care about that the fans are able. To to pay relatively well let’s call it.

 

Good prices.

 

Let’s talk about broadcasting because I think when it comes to broadcasting rights by Munich in the top 20 clubs in Europe it’s 10th 11th the German league when you compare with just the Premier League. I mean it’s it’s lagging way behind isn’t it.

 

Can the German league and the Bundesliga which have a one cannot close the gap when it comes to broadcasting rights or not. Why is there such a gap.

 

So first of all we have an incredibly big gap between pay TV England and pay TV. Germany first of all I believe we in Germany the league made made big mistakes. If we talk about 10 12 15 years ago where where the. Pay TV market was established and build it and developed in England. So we was very slow built believing that the clock may be in Germany’s going different than in England but it doesn’t go different. So that is a big big problem. Oh you’ll see that actually transfer market.

 

 And because England have so much of the English clubs have so much money available in that market that it is not easy to defend. That we keep our players as well here by Munich like Thomas Miller or like. Players from Real Madrid like Sarah Ramos because they have big request from England. And so it is very difficult to keep them. But we have to do we have to do better in Germany because it can’t be it can’t be happened that just the Bundesliga the first league is getting something like half a billion euro.

 

 If you compare that to the English market. Where for instance. The number 20 of the Premier League is getting likely the double of Bayern Munich as German champion. You can imagine how how long these could work. Because especially in the transfer market. So I believe we are very creative.

 

Very good in sponsorship very good in merchandise very good and commercial you’ll have a team to PSG out we are where we are very good in these. But so I believe the creativity is quite limited in comparison to the broadcasting money. So we have to do much better in Germany and that is really an obligation for the German league. To cash in money in favour of the clubs to to be more. To to have a better comparison against the English. By Munich success has made them a household name across Germany.

 

 Now they’re setting their sights on a global.

 

Fanbase. The team has just returned from China where they sold out stadiums and were greeted by thousands of cheering fan. Defined Munich recently opening offices in New York and Shanghai. We asked Rubin again about his plans for global expansion the brand is very strong by Munich.

 

It was number one. Manchester United overtook it last year according to Brand Finance you or you’re the world’s number two brand. That’s based on our club’s ability to monetize its global recognition.

 

What more can buy Munich do to boost your global recognition.

 

What would you say the key is to harnessing your brand I believe we are 100 percent strong regarding the home market in Germany.

 

I believe everybody if you go on the streets asking who is buying Munich probably under present can give you an answer.

 

I believe what we are doing now is to go abroad especially in the States and in Asia especially in Asia in China because it’s by far the biggest market. So we are going there to bring the club closer to our offense in Asia and in the States. To to show the people that buy what is Bayern Munich for what stands Bayern Munich and what is Bayern Munich may be different than English clubs so what.

 

How are you different. I mean you are late to the China party. You’ve said that at the premier league clubs were there way before you. You’ve now got a presence in China. I gather you’re going to open an office in Shanghai. Is that correct. That’s correct.

 

How can you show your deference to that to the other big European clubs who are already present in China. So I believe we can show a different being. But. We just want to.

 

Not go alone. For cashing money.

 

Quickly. So we want to. Establish partnerships.

 

So we try to to get in close in close of partnerships. Let’s call it we want at the end of course we want to earn money in the countries in that regions. But we are always ready to give up and to help them in supporting football in their countries. I believe in the States soccer is on a very good way. Football in China is on a good way but however they need help to establish the quality of these big quantity. They fortunately have available so I believe we can do a lot for Chinese football we can do a lot for American football and we tried to do so to help them.

 

 At the end the outcome has to be good for both for Bayern Munich and for the football in the States and in China.

 

Do you worry about China especially the headlines in recent days. It’s an economy it’s a market system that’s going through troubled times.

 

Does that affect your support or on the ground or not. No not really not really. Absolutely no.

 

Because when we had our tour this year in China playing in Beijing Shanghai and Guangzhou third one so we had still the impression that economy is a bit slowing in comparison to the past year. But we had some talks and discussions with partners who followed us on the tour like Allianz like Audi forex wagon and so on. And we had the we had the clear sign however that is a question of of time no. So maybe after always growing growing growing. Heavenly growing maybe snow a couple of months hopefully just months that the economy in China is slowing.

 

 But no no no worry about we are not very about what are the new markets.

 

You mentioned the US you have an office in New York outside the US outside China. What are the new markets that you’re going to be pushing into the untapped markets that buying has to be pushing into an in coming years.

 

I can imagine that we go to a market which maybe is not very developed in football and not escape by many football clubs like like India.

 

India is a big big market in the world. Many many people are living there and football is in comparison to hockey or two as a sports in India not very popular. But I believe there is still a big market because they established a leak last last season last year. And I believe that is something what we can do together with our partners going there together with Adidas with Audi with Allianz to to to to. Help Indian football to develop that as well in our favour.

 

Can we talk about domestic matters once again the 50 plus 1 rule which to many English fans is it’s it’s it’s it’s a strange rule but it’s quite simple. The fans have to be in control of 51 percent of each club there are a few exceptions to this rule and these exceptions is causing slight annoyance among fans in Germany. Do you. Do you do you understand you accept the annoyance. I mean we’re talking about how often I’m here. You know we’re talking about by a Labor concern or Wolfsburg.

 

People are looking at Leipzig Hanover is the rule being diluted is that a bad thing for football. Should or should should the rule be banned. What what’s your view.

 

First of all from the legal point of view this rule is not in line with the low with the European law doesn’t work and so we had a case here from Hanover. The chairman or the boss of an over was. Troubling that rule and he was close to to open a legal case in Luxembourg at the RGA.

 

And I believe fence like it likes it. They love it.

 

And I had some some interesting experience when we played I believe the quarterfinal two years ago in Manchester. So there have been many supporters with the green and yellow shirt. That’s right. And I ask one of them what is the reason that you were wearing the green and yellow shirt. And they said so we don’t like the Glazers we don’t like that they are. That they take it over the club and and we don’t like that. And so we don’t want to help them buying the original shirt. And it was an interesting experience for me and then and then they said to me will we left by Munich because you are independent.

 

So I believe that support us laughs the independency of the clubs. Is it not working financial fair play in Europe or not.

 

Telling us the truth. It’s very difficult to understand actually financial fair play because when I see the transfer activities from certain clubs who had been penalised a year ago yeah. It’s very difficult to understand. If financial fair play this year is different and how it works and I what am I missing a bit is that transparency how it works because I understand the rules but I don’t understand the rationality actually of the whole system and that is not up to me. I received many telephone calls. What has happened in the market because a year ago some clubs had been penalised and now they came back stronger than before and it’s very difficult to understand and I believe it’s up to you wafer to make it more transparent and to make it more understandable for the clubs.

 

That was by Munich chief executive officer Karl Hinds ruminate. Up next I speak to current plan and Spanish star Zogby along. He’s won everything there is to win on the page what about off the page. We speak about his investments and his life after retirement. Shabby Alonzo has won his home.

 

From the World Cup to Champions League titles at almost every European trophy in between the Spaniards been playing professionally for 16 years and last year transferred to buy Munich following a glittering five years at Real Madrid. We spoke exclusively with the Spanish midfielder by training ground. I asked him Which league is Europe’s strongest.

 

For me it’s been a great experience. Not it’s hard to say which one is the best. Of course I really like it primarily because it’s their weights.

 

It’s been broadcasted all over the wall and the waves you’ll have towards the game and as a spectator probably is the best league there. The league.

 

I love the spectator friends and on the television front internationally can the Bundesliga ever compete with the Premier League. I mean you look at the TV rights money and the Premier League is way ahead. How can the Bundesliga catch up. How can buy Munich catch up with the Manchester United’s of this world. Well I think that.

 

In our case part of glory Bayern Munich. We can’t compete with all the teams financially you’re talking about because you’ve just you there. They’re all the incomes that they come from from merchandising and from the stadium and from the rights and they have where it’s very well balanced. But of course to compete with their Premier League it’s it’s really tough because they are a year ahead of a league of wonders league in terms of selling the TV rights in terms of imagination and all over the wall. They have they have been doing this work to have like an award they ran for years.

 

 And I mean in those terms it’s hard to compare that. I think that.

 

It’s good that the league is robbing for the last year the teams. The level of the teams is getting better. Which league to play next. What about Italy. Well I have no idea. Thirty three hours so the the end is getting close to getting closer.

 

I don’t know. Was this your final club at the top or.

 

I don’t know either. I haven’t. Who knows at the moment and focus on indecision. But for sure. I will have to take it.

 

Would you be happy now having just played in those three big leagues.

 

Well I would like to have done it earlier because I saw someone playing Harvey because you know I I love football and out of there the groups with big tradition and big history and so far I came from social down my home and that’s where I wanted to play. After I went to Liverpool all the history real madrid time champions league and coming here to buy anything Laker a nice.

 

And I script of a football career I would say that.

 

Can you compete with Barcelona. I mean day day day with a team of yeah. Europe lost know the last year real Madrid before Spain seemed to have well absolutely the dominance in the Champions League. You wanted the year before by Munich. Is it going to be difficult to stop the dominance Spain’s high. There are five now that this essence Champions League which is amazing isn’t it. Yeah it is but of course it’s going to be tough because once you are in the semi-finals you know that quarterfinal semi-final Champions League you know that you are going to.

 

Face one of the best things in Europe and whenever you bangers. Madrid or Barcelona that they are.

 

Fantastic fantastic teams. Anything can happen but we need to get ready for that moment. But I wouldn’t say that at the moment there is Spain’s dominance because before that as you said the final was between buyer and doorman.

 

Yeah a few years ago these teams in their Premier League teams so bravely poorly the footballers as well. I looked a bit like a cycle. There are cycles and there was that the Premier League cycle the game on one day Spanish you answer. The good thing is that you don’t see a clear favorite.

 

There are five six top teams in Europe that there for sure contenders for the Champions League. You’ve won everything literally World Cup European Championships Champions League National League’s national cup’s.

 

What’s left. What keeps you going. Well you’ve literally won everything there is to win the prize.

 

For me they’re more symbolic is that is that their collective accomplishments and what we do all at our football career. You know I have that saying that to win their third championship with the third globe it will be like.

 

They have their eyes on the cake say no. The icing on the cake for me too really I think that only a shadow has achieved that then. And it will be a great achievement but it’s going to be a difficult one and we’ll try that.

 

You’ve obviously been very successful both on on the pitch and financially you’ve been rewarded for that. All football players.

 

Advised enough on where to put their money how to manage their money. In your experience would you say there’s enough advice for players properly from.

 

It depends how large of the background you have for how you are raised.

 

You know I understand in some cases it’s difficult to cope with that fame with that big money that comes suddenly into your hands and to be able to to manage it in the right way. Broadly you are. You don’t have the formation or your parents. They don’t have information and that’s why you have to be surrounded with great advisers. But it’s difficult as well to find that. That people to trust your money or worried you are gonna put that because from my case I was lucky enough to my brand.

 

He was a football player as well and we were let life. We’ve had like I would the.

 

Goodbye show so good good team we’ve had that. So we’ve had no problems but it’s not easy to deal with that. Too much.

 

Strong change to take an active. Yeah that’s right. I had no money. I mean you keep a kid. Yeah yeah yeah.

 

I try to have control of my finances to have like a business plan because you know that in future in ten years you get. Wait wait them out of money but you need to try to be smart enough to to be able to not to have enough rent.

 

And I’ve written for that for the future as well. Can you give us an idea.

 

I mean while I tried to get your file on on real estate or stocks of to I found a nice portfolio to not to be hit with this suddenly China crazy through there with a financial crisis and how far the you find.

 

Keep an eye on G F Global financial markets.

 

Yes I do I do I do keep an eye because I have some investments in those in those areas and you need to keep an eye on.

 

And as I’ve said before the AMP role is closer so I need to be more or more focused on those things.

 

How the Spanish economy’s rebounded. I Are you surprised it’s it’s the sort of the strong economy right now in Europe on a broader level.

 

The growth was around three three point three point three percent. So that’s that’s great news because there that the crisis hit really hard Spain. And you know the measure that had to be taken were really tough.

 

But of course all the macro numbers are looking really good for. For a spending broadly for the people on the streets it’s still very high citywide.

 

The unemployment rate is really high so it’s it’s it’s not an issue to the fore for those people that’s probably in the long term they will they will not do that and hopefully not just Spain and Europe will get better.

 

That’s going to be good. Thank you very much. Thank you sweetie. Thank you very much.