Vidit Divya Kumat 011 Trimester 2,

MBA (law) Intellectual Property Rights

Introduction

On August 20, 2016, RB Leipzig met SG Dynamo Dresden in the DFB-Pokal Cup final which
ended in a breathtaking match with a result of 5-4 in favor of RB Leipzig. While the performance
was awe-inspiring, the most thrilling part of the football match came when Dresden fans threw a
severed bull’s head on the field in an act to mock the owners and mascot of RB Leipzig. An act
such as this took place to protest the club’s fast emergence in the German soccer scene and the
allegations regarding the exploitation of ownership rules and regulations by RB Leipzig. We live
in a very hyper-commoditized era of football, where professional football clubs organized
largely as commercial profit earning companies are controlled by rich investors, yet many
believe that the principal league in Germany; Bundesliga still remains the last surviving
stronghold of member-run football clubs rooted in their communities with high attendance
numbers and dirt cheap ticket prices. This article intends to give an analytical overview of the
regulatory and factual evolution of football club ownership in Germany and the impact of the
structural changes in ownership of the club with respect to the evolution of intellectual property
it currently holds.

Corporate Ownership: German Football.

At the heart of the issue of club ownership which is closely connected to the legal (corporate)
form of the club, there exists a stark difference between the commercial company and member
association. 1 When the German football association gave the permission to football clubs of
Bundesliga to subcontract their professional football departments, there was a growing need to
protect the German football from the anticipated adverse effects of outside influence on the
clubs.2 Predominantly, the aim was to safeguard:

 The credibility and honesty of the competition.

1
For further explanation into the legal for of a football clubs, see Stephen de Wint, Key aspects of legal form and
status for sports clubs in England, Sport and the Law Journal, Vol. 11 Issue 2, Pg 147.
2
Award of DFB court of arbitration of 25 August 2011, published in SpuRt, 6/2011, pg. 259 (in German language).

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Vidit Divya Kumat 011 Trimester 2,
MBA (law) Intellectual Property Rights

To achieve this goal, the German Football Association and the league unilaterally decided to
introduce the 50+1 rule to its statutes3 which prohibits an investor from acquiring majority of
capital shares belonging to the football club. Still against all the odds, the billion dollar
marketing giant and the energy drink corporation chose to take the road less travelled by to carve
their entry into German football. In the year 2009 Red Bull founded an own association of
members consisting of only Red Bull acquaintances and employees, by thus taking over the
sports license belonging to the East German 5th division amateur club SSV Markranstadt.

A takeover such as this requires utmost support and confidence from the members of the club as
well as the supporters of the club because it is them who have to deal with the fallacies of
structural changes such as this. Therefore to ward of potential membership to the club and to
remain in control of the functioning of the club, as per reports of the board of the club the
membership fees to the club was set to a whooping 800 Euros; most of the members of the
football club are current or ex employees of Red Bull.

One question which daunts the mind of the researcher is the extent to which Red Bull completely
rebranded the intellectual property belonging to SSV Markranstadt. The DFL and the DFB
governing laws prohibit changing a club’s name and the logo for the sole purpose of corporate
advertisement, but the club chose to overcome this hurdle by choosing to call itself,
RasenBallsport4 , abbreviating to RB Leipzig, which unsurprisingly and eerily is similar to the
brand name “Red Bull”. Appendix 1 gives a list of structural and design changes to the
intellectual property owned by the club which was a result of this rebranding.

3
"A company may acquire a sporting license only, if a club [i.e. the member association] has a controlling stake in
it […]. The club holds a majority interest in the company […] if it possesses more than 50% of voting shares plus
one additional vote in the shareholders assembly" DFB Statutes, Section 16 (c) (2) para.6; Ligaverband Statutes,
Section 8 (3) paragraph 6.
4
This translates to, “lawn ball sport”.

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Vidit Divya Kumat 011 Trimester 2,
MBA (law) Intellectual Property Rights

Conclusion

In a span of 9 years RB Leipzig has evolved from being an amateur football club in the 5th
division of German Football to being at the top of the table in Bundesliga which is the premier
football league in Germany. The adaptation to this new identity and to the new structural setup
proposed by Red Bull has not been an easy achievement as at the heart of things in a sport like
football the support of the fans is of utmost importance and can never be bought by money, thus
making sure that the strategy applied by Red Bull to take over the football club cannot be in
direct violation of the values and the philosophy of football which the club follows. The author is
of the opinion that the manner in which Red Bull handled the proposed change to the intellectual
property and the functioning of the football club is noteworthy due to the dependence of football
clubs on investor payments. In conclusion, one must observe the tact with which the Red Bull
acting as an external investor made sure that they aren’t perceived as a trigger resulting in the
distortion of competition in the German league but rather they have marketed themselves as a
possibility for football to become more competitive in Germany.

Bibliography

Books and articles

 Stephen de Wint, Key aspects of legal form and status for sports clubs in England, Sport and the
Law Journal, Vol. 11 Issue 2, Pg 147.
 Award of DFB court of arbitration of 25 August 2011, published in SpuRt, 6/2011, pg.
259 (in German language).

Websites

 https://www.theguardian.com/football/2017/aug/31/disneyfication-clubs-manchester-city-
red-bull
 https://www.natlawreview.com/article/common-ownership-uefa-reach-decision-
participation-rb-leipzig-and-fc-red-bull

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Vidit Divya Kumat 011 Trimester 2,
MBA (law) Intellectual Property Rights

Appendix 1

Fig 1: The new jersey with the new crest and design

Fig2: Evolution of the logos after the Red Bull takeover.