GGFN Analysis & Commentary | DFL clubs set to vote on 70-percent ‘Player Licensing Cap’ | OneFootball

Kicker reports that, at its next General Assembly Meeting on March 3rd, the DFL will vote on a clearly designed new series of penalties for clubs that violate Bundesliga financial regulations. The league body responsible for administering Germany’s top two professional footballing tiers wishes to impose stricter violations on clubs spending too much of their budget on players. GGFN is pleased to supply a run-down:

Is this a vote on a salary cap?

No. That’s a much more clear-cut and separate issue that shouldn’t be confused with this attempt by DFL member clubs to tighten up existing regulations. In effect, Bundesliga and 2. Bundesliga clubs already operate under scrutiny that prevents overspending. The 36 clubs under the DFL’s purview are routinely “stress-tested” to ensure long-term financial solvency and must maintain a healthy amount of liquidity to ensure that there are no unexpected club bankruptcies.

The new rule will force clubs to adhere to a restriction that will permit them to spend no more than 70 percent of their sports-related budget on “Player Licensing”. This includes salaries and all manner of fees associated with transfers, loans, re-sales, etc. German clubs already must adhere to FIFA and UEFA financial fair play rules which attempt to restrict such expenditures, but the new rule tightens up discrepancies and set a clear boundary. 

Will the new rule restrict Bundesliga salaries?

In the long term, potentially. Kicker reports that, on average, Bundesliga and 2. Bundesliga clubs spend around 55 percent of their sporting budget on player licensing. There are nevertheless, Kicker claims, two to three clubs operating dangerously close to the 70 percent limit in any given season. In any event, the 36 DFL members have until the 2027/28 campaign to adjust for partial implementation of the new rules. Full monetary sanctions won’t be enforced until the 2028/29 season.

Will the new rule cap private investment in clubs?

Unfortunately, the new rule doesn’t appear to be interested in this issue at all. The Kicker article specifically references the two major private investment fiascoes (Hertha BSC and Schalke 04) that ultimately led to both clubs imploding in the current decade. And yet, Kicker also claims that major cash injections such as the €80m pumped into Hoffenheim by club patron Dietmar Hopp in the autumn of 2024 won’t factor into the “70 percent calculus”. 

Moreover, non-50+1 clubs such as RB Leipzig, Bayer 04 Leverkusen, and VfL Wolfsburg are officially exempt from extra capital their parent companies wish to add to the club’s sporting budget. To put this into perspective, the extra private money that Lars Windhorst pumped into Hertha wouldn’t apply to the new “70 percent calculus” at all. It is somewhat confusing that Kicker references the Windhorst case when this new rule wouldn’t prevent a repeat. 

It is understandable enough that the working group responsible for submitting the proposal to the DFL created such loopholes as Wolfsburg, Leverkusen, Leipzig all have representatives in it. The proposal does promise “fairness reviews” for private capital infusions, but it remains unclear how such reviews would be different from other supervisory guardrails already in place. 

What is the GGFN Analysis and Opinion?

The new rule remains a fairly bland technocratic implementation that will likely interest few. One can easily some positive intent in that, heading into the future, the DFL wishes to ensure that some strict penalties prevent clubs from spending too much on players. Viewed a little more cynically, one can claim that this is a means of deferring the entire “Salary Cap” debate in the future. German football can point to this regulation to bypass the debate entirely. In the meantime, very expensive accounting lawyers have more than enough time to figure out how to outwit it. 

One should point out that the “Salary Cap” debate really isn’t much of a live issue within the German footballing public. The fan-base remains far more passionate about 50+1 and preventing foreign money from infiltrating its football clubs via privately bankrolled clubs, sponsorship, and investment deals. Linking the issue of Bayern dominance to a “Salary Cap” doesn’t even fully make sense seeing as how Bayern do face budgetary restrictions, were very parsimonious this year, and are still dominating the league. 

A issue of more equity in distribution of TV broadcast revenues is something the DFL addressed in the 2020/21 and 2025/26 negotiating rounds more to the satisfaction of the fan bases. Though more equitable distribution was largely marginal in both instances, but the fact that the scales became more progressive kept the public largely content. The fact that league-wide fan protests in the spring of 2024 also sunk the proposed DFL investor deal preserves a fragile peace when it comes to financing issues, though fans still literally protest staggered kick-off times for TV audiences every last week.

Something German football lovers should like about this new rule is that, if applied properly, it should incentivize clubs to invest more of their sporting budget for homegrown projects like their academies, training grounds, facilities, and youth programs. Additionally, the new rule reportedly is structured well enough to hit repeat violators with the right progression of financial sanctions, points deductions, and transfer bans. Sometimes technocratic bureaucracy can build something rather well constructed to meet legal needs.

Then, of course, we have the matter of the exceptions.

Sigh. Those remain rather self explanatory don’t they?

A 70-percent Player Licensing Cap for all clubs…

…unless they have a rich benefactor, or are bankrolled by a multi-billion-dollar conglomerate. 

 *cough*

GGFN | Peter Weis