DFL not exploiting opportunities of the current process
Attorney Christof Wieschemann, Bochum
The licensing procedure of the DFL in its present structure is not able as a control instrument lasting economic stability of the League participants and credibility in the process to ensure – make. The DFL searches is in the intentional consequence to avoid invalid clauses in the license terms and the license of control, which she themselves exposing doubts as to an equal treatment of all participants and the application of only proper motives. Lacking the licensing procedure the inclusion of sustainability criteria and the overall granted only by presenting a consolidated balance sheet.
The DFL has failed but already 2004 in determining license to exploit the possibilities of the current procedure.
1. final cut
Rules in article 11, paragraph 1 LO about the limitation of the Kontrollrechtes of the decision of the DFL in the licensing procedure by third parties and the provision in § 3, sentence 2, of the agreement on the exclusion of claims for damages, seeking to evade the DFL of control of their decision applications. Although both standards are in their intended consequence regarded as un effectively, they nevertheless fulfil their purpose, as long as other participants consider at least to be effective.
Thus, the DFL provoked even doubt allow even justified motives guide the licensing procedure only in the procedure. Borussia Dortmund, as well as Schalke 04 are strong brands in the football business and value-forming factors within the framework of the overall marketing and the prestige of the Federal League. For this consideration, no space is however in the licensing procedure. Subject to review is solely the economic performance, insofar as this is necessary for the continuity of the game. The DFL can escape only through greater transparency, at least compared with its competitors in respect of a mutual Verschwie genheitskodexes the suspicion of connivance in favor of large and to the detriment of the little league participants. Alone the expectation that you can undergo the own decision of neutral review, already changed the decision making.
2. long term observation
The case, at least, documented Borussia Dortmund, that, within the framework of the licensing, the viewing of only the next season under pure liquidity aspects is not sufficient. Requires mandatory a higher weighting of sustainability criteria, such as the evaluation of capacity development. That is also now been subject to the procedure (annex XI, section II LO), is not sufficiently weighted but at least in practical application. Supposedly the DFL a sachgerechteren shaping of the licensing process with the inclusion of assets by a ruling in 1982 to see is prevented. This is the TSV 1860 München for the season to a decision of the regional court of Frankfurt in connection with the licensing procedure zuguns-th 1982 / 1983 were the basis of the judgment but only the standards d license game Statute of the DFB, which in addition have been rejected in the section 5 replaced in the meantime anyway by other regulations of the League Association by the Court. 1860 Munich was inferior in the lawsuit. The judgment is a different design of the process not ent against. What but then?
3. consolidated financial accounting
The DFL is confined in the licensing order, in particular in annex VII, to request economic data of only the League participant and to evaluate. Professor Küting has however particularly in his interview by the 24.02.2005 applicable affiliated, that almost all participants are flawless corporations that have outsourced their business activities in areas of rehab, marketing, sponsorship, catering etc in subsidiaries. Moving of assets within the group leads itself to the result – or equity capital improvement League participants. Netting of the approaches to the League participants and the subsidiary in the consolidated balance sheet would, however, lead to neutralization. Of course you must remember, that referred to by Lord Professor Küting as “Balance makeup” kind of accounting is legal and applying them alone has no evidence value for the economic performance ability or lack thereof. Against this background, the abandonment of the consolidated company accounts template but for not making of credibility and reliability sensitivity of the procedure.
4. application of existing criteria for the licensing of 2004
The BVB was allowed to assume 2004/2005 not by higher revenues from game operation due to the table situation in the spring of 2004 for the season, as in the fiscal year 2003/2004. For this FY BVB had already a negative Cash Flow from operating activities of € 25 million and investment activities of 21.8 million from (annual report, page 77). Even if at that time the expectation was to reduce the investment for 2004/2005 despite the Bauver obligations for the World Cup and transfer surpluses achieved in addition to be able to reduce the cost of the license player Squad (around 20%), and was already foreseeable that a capital increase through the issue of 9.750.000 shares at a price of approx. € 3.00 would just sufficient to operational liquidity requirements until 30.6.2005 to cover. At the same time the GB expelled but already connection possibilities with a remaining term of less than 1 year in the amount of € page 71 65 million, were no funds available for their compensation. Not the € included 20 million, which will have to pay contract to the 30.6.2005: BVB may in connection with the Gerling apparently still. This would be in the table page 72 as other liabilities with a remaining maturity 1-5 years are shown, should, but according to Mr Meier in the PK now a reserve to be formed covering. It’s also “in 2003/2004 a debt purchase and assignment agreement has been carried out the season 2004/2005 garantie fend amounting to € 12.4 million for the pre-financing of pending claims” on page 67. This should be a note, the BVB is already 2003/2004 has future revenues to finance, 2004/2005 would necessarily missing from the season. These numbers are the logical continuation of the semi-annual report to 30.12.2003 and correspond to the State of knowledge at the time of the license decision in June 2004.
Numbers of known in the licensing procedure full-time, qualified for the examination of the documents employees of the DFL came to the message of the kicker of the 14.10.2004 already concluded that a license is not to issue. About sat across the Board.
Conclusion
The licensing procedure will and should be not only control, but also a Steuerungsin instrument with which the financial soundness and economic performance of the clubs to improve (preamble of the licensing regulation). It can be but only, if the procedure allows a long term consideration of affiliates in the group a League participant and in turn by new control mechanisms ensures that licensing decisions are determined solely by considerations justified the procedure itself and not influenced by other, possibly political motives can be.
Lawyer Wieschemann is mainly in Bochum enough law, but also sports-legal work. He is member of sports law in the German German lawyers association since the year 2000