FCB: The Healthiest Club in Europe?

FC Bayern joins European football's top-earning clubs, with zero debt.

Fans of FC Bayern München (“FCB”) have it pretty good these days. The European football club from Munich, Germany consistently challenges for top honors in every competition it enters. Domestically, FCB has won the Bundesliga (German national league) 25 times, more than any other club since its inception. It currently tops the table in contention for an unprecedented 4th consecutive title. Internationally, FCB is routinely among the favorites to win the UEFA Champions League, the most coveted trophy in club football. They have already won it 5 times, surpassed only by Real Madrid and AC Milan, but the growing fan base is hungry for more silverware.


FC Bayern’s financial performance has matched its sporting success. Revenues have grown at a 10% CAGR over the past five years, most recently reaching €523m in the 2014-2015 season, the third highest of any football club globally [1]. Last season also saw them earn a record after-tax profit of €24 million [2]. Most impressive, however, is not FCB’s relative scale, but its relative financial health. FCB is the only club of its size to be completely debt free, with equity of €412 million [2]. The club recently paid off its flagship stadium, the Allianz Arena, 16 years earlier than originally negotiated [3].

As FCB Chief Executive Jan-Christian Dreesen put it, “there is no doubt that Bayern is at a stage they have never been before, both on a sporting level and financially” [1]. Contributing to this success is a highly effective alignment between the club’s business model, its operations and key stakeholders.

Business Model

FC Bayern has three main sources of revenue: match day, broadcasting and commercial activity. Match day revenue includes ticket and corporate hospitality sales. Broadcasting refers to the distribution of broadcasting rights domestically and internationally. Commercial sources include sponsorship, merchandising and other commercial operations. In 2014, match day comprised 18% of revenues, broadcasting 22% and commercial activities 60% [1].

media.media.e6263f8d-c8ce-4c13-b0ba-0454318e0041.normalizedWages are the largest expense, primarily for the players, but also for coaching and support staff managing training facilities and the stadium. The quality of the squad is the top priority and FCB invests significantly into increasing its talent pool. When it comes to developing players, a club has three general options: build, buy or borrow. The club can develop budding players through youth academies, buy contracts of players developed at another club, or sign a player temporarily on loan. FC Bayern is active in all three areas, trying to complement home-grown stars with high-potential and seasoned outsiders. In some years, transfer activity contributes positively to net income as player sales can exceed player purchases.

It is important also to consider the context in which FC Bayern operates. Since 2001, the German national football league forbids corporations from owning a majority stake in football clubs. This is intended to maintain public ownership of the club and ensure each club is managed with a long-term perspective. Furthermore, UEFA “Financial Fair Play” was passed, requiring clubs to balance budgets over several years to prevent financial distress, which was common after periods of overspending [4].

Operating Model

Along several dimensions, FC Bayern has organized itself effectively to transform its assets – players, coaches, the stadium and the fan base – into drivers of value. Overall, there is a strong focus on aligning incentives of all key stakeholders around the sustained success of the club.

Organization & Management – The professional football club is run under the FC Bayern München AG, effectively an unlisted joint-stock company. The AG is owned 75% by FC Bayern eV, a sports non-profit representing the collective ownership of over 250,000 members [5], and 25% by long-term corporate partners [6]. This ownership structure ensures that the interest of FC Bayern’s fan base is ultimately aligned with the organization’s priorities. FCB rose to prominence under the executive leadership of several former players, primarily as Uli Hoeneß, Karl-Heinz Rummenigge and Franz Beckenbauer. These individuals contributed greatly through their experience, loyalty and vision. They also maintained close relationships to Germany’s political and corporate elite.

Transfers – FC Bayern has been highly successful at maintaining a squad that is able to compete at the highest level. To this end, they focus primarily on their own player development. Operationally, this takes the form of dedicated training facilities and coaching staff for youth players, but also frequent interaction with the senior squad. The most talented players receive opportunities to debut for the senior squad, even if they are still under 18. Home-grown talents include World Cup 2014 winners Bastian Schweinsteiger, Philipp Lahm and Thomas Müller. Bayern have also managed incoming transfers well, spending large sums, but more selectively than Real Madrid, Barcelona or the likes. While aggressive spending can drive success in some years, over time it drives volatility as overspending cannot be sustained. FCB’s shrewd management of transfers is bearing fruits and enabling it to finance top player purchases without debt.

allianz-arenaStadium – Stadiums are major investments and operations to maintain. FCB was lucky that, after the 1972 Munich Olympics, it could play in Munich’s iconic Olympia Stadion. As the club rose to international prominence in the 1970s, it was able grow into the existing 57,000-seat stadium. While ticket sales are an important source of revenues for the club, its member-ownership always ensured that ticket prices stayed affordable for all fans. This also meant that stadiums were full, as they are at most top-flight games in Germany today. In 2005, the new Allianz Arena was inaugurated (see image on the right). Its setup was carefully managed, to ensure a world-class stadium was built without the expenditures burdening the club. The stadium was built together with lower-division football club 1860 München. Eventually, FCB bought 1860’s share and leased the stadium back to them for their games. The flagship arena also generates revenue through concerts, national football games and other hosted events. It seats 75,000 and sells out most games.

Corporate partnerships – To fund the growth of its operations, FC Bayern has established deep partnerships with major German corporations. 8.33% stakes each were sold to Adidas, Audi and Allianz [7]. Most recently, FCB negotiated an extension of its sponsorship deal with Adidas, which will bring in €60m every year until 2030 [6]. FCB has also partnered with Germany-based SAP to run its ticketing systems and provide software for advanced game analysis [8]. This careful selection of partners, regionally based and long-term focused, ensures that FCB’s interests are supported by the broader community in Bavaria.

Culture – Another critical component to FCB’s success, and in particular the dedication of its players and staff, is the club’s culture. The club emphasizes that it treats every member as “family” and demonstrates this in meaningful ways. Beyond helping youngsters and foreigners settle in, the club members are loyal when times are tough. Breno, a once-promising Brazilian defensive talent, was sentenced to jail after setting a fire in his own home in Munich. FCB honored its contract and supported his re-integration into the sport after his prison term. When the club’s long-time leader Uli Hoeneß was sentenced to jail for tax fraud, there was an outpouring of support from club and players alike, while the general tone in German press was much harsher. Bayern extends its loyalty and earns it from supporters in return.

FC Bayern has the same business model as other professional football clubs, but it has managed to scale with a sustained financial health that is unmatched. As Chief Executive Dreesen explains, the club’s maxim is “maximum sporting success alongside financial prudence” [2]. FCB has done well to operate in the spirit of legislation like UEFA’s “Financial Fair Play” or the Bundesliga’s requirement for non-corporate majority ownership. The club has not cut any corners. It has managed its finances conservatively, focused on internal youth development, selectively bought international top stars, and ensured that everyone puts the interest of the club ahead of their own. This culture, the atmosphere in the Allianz Arena and the serious contention for titles are driving growth in FCB’s fan base. With typically German aspiration for “slow, sustainable growth”, to date FCB has focused predominantly on developing the domestic market. After the recent record results, however, management has decided to increase the focus on international expansion. The mission was underscored by the opening of a new FCB office in New York, with the aim of building presence in North America. With the organization run as it currently is, fans old and new can be hopeful that the Champions League trophy is theirs again soon.



[1] Deloitte, Football Money League – http://www2.deloitte.com/content/dam/Deloitte/uk/Documents/sports-business-group/deloitte-football-money-league-2015.PDF

[2] Goal.com, Bayern Announces Record Financial Results – http://www.goal.com/en-us/news/87/germany/2015/11/27/17785852/bayern-announces-record-financial-results

[3] Sueddeutsche – http://www.sueddeutsche.de/sport/arena-in-froettmaning-fc-bayern-hat-sein-stadion-abbezahlt-1.2229576

[4] UEFA – http://www.uefa.com/community/news/newsid=2064391.html

[5] The Telegraph, How German Giants Became the Strongest Club in the World – http://www.telegraph.co.uk/sport/football/teams/bayern-munich/10646992/Arsenal-v-Bayern-Munich-How-German-giants-became-the-strongest-club-in-the-world.html

[6] Finance Magazin – http://www.finance-magazin.de/meinungen/dritte-halbzeit/der-900-millionen-euro-coup-des-fc-bayern-1345059/

[7] FC Bayern München – https://www.fcbayern.de/de/club/fcb-ag/organe/aufsichtsrat/index.php

[8] SAP, Press Release – http://news.sap.com/big-data-turning-fc-bayern-munich-international-business-video/

[9] The Economist, Bayern and Selling – http://www.economist.com/blogs/gametheory/2013/06/german-football-s-finances

[10] Forbes, The Rise of Bayern Munich – http://www.forbes.com/sites/afontevecchia/2014/05/07/the-rise-of-bayern-munich-can-the-worlds-best-club-keep-it-going/

[11] Bleacher Report, Is Bayern Munich the Perfect Model of a Modern Football Club? – http://bleacherreport.com/articles/1638221-is-bayern-munich-the-perfect-working-model-of-a-modern-football-club

[12] BBC, German Football Model is a World Apart – http://www.bbc.com/news/business-22625160

[13] Forbes, Bayern Munich – http://www.forbes.com/teams/bayern-munich/




Redefining how WeWork


Trader Joe’s

Student comments on FCB: The Healthiest Club in Europe?

  1. Winning the Bundesliga 25 times and UEFA Champions League for 5 times is just amazing!
    I recall the moment that Germany won the 2014 FIFA World Cup and the team consisted of around 6 starting members who belong to FCB.
    The German national team’s sophisticated teamwork and organized move captured all audiences.
    As you wrote, I heard FCB is really good at its player development. Also I am impressed by its healthy financial position and its ability to bring talented people from outside including the former FC Barcelona coach.

    However, one drawback would be, because it is too strong and dominating the Bundesliga, it may affect the overall dynamism of the league. Havind said that, FCB is one of my favorite team in the world.

  2. Very insightful analysis and observation of FCB. I was really impressed by how influential it is in Germany. But also then my concern is similar to Tomo’s – could FCB or Bundesliga share the experience or extend the support to the other clubs? Most rising stars from other teams targeted at transferring to FCB to become successful, making FCB overwhelmingly successful and most other teams much less competitive. But in other leagues like in England, many teams could fight for the championship and not any is dominating all along.

  3. FCB’s success is predicated on holding a near competitive monopoly over the Bundesliga and being able to obtain top talent from other teams (i.e. Borussia Dortmund) at discounted rates. Therefore it is uncertain if their operational model can withstand the level of competition the club would experience in other European leagues.

  4. Great reading! I wonder how FCB got so ahead of its german rivals in terms of financial health. Also, compared to other european power houses, such as Real Madrid and Manchester United, I would like to know what is the breakdown of local vs international revenues. I guess international expansion (targeting new countries) is a revenue stream that FCB would benefit a lot from.

  5. “Breno, a once-promising Brazilian defensive talent, was sentenced to jail after setting a fire in his own home in Munich. FCB honored its contract and supported his re-integration into the sport after his prison term.” I found your point around culture really interesting. In my experience, sports clubs legacies depend a lot on their ability to win but almost more importantly to ensure that their fans feel like they are part of something bigger. With the cultural elements that you describe, I am quite confident that Bayern is one of the healthiest clubs in Europe.

  6. Great article Damian! True respect for FCB for what they have accomplished. As previously hinted by other commenters, is FCB shooting in their foot with too much dominance? From what it appears, FCB drafts all the good players their potential Bundesliga rivals produce. Partly, one can argue that such transfers have smaller barriers of cost, player transition to an altogether new country and league style of playing. However, such an operating model affects FCB’s revenue stream in the following way:
    a) Poor broadcast revenues: I’d read an article that says Queens Park Rangers, last season’s worst Premier League club, made almost twice as much in TV revenue as German champions Bayern Munich (90.8 million Euros to 50.6 million Euros, respectively). Partly one can blame it to Match Day timings, lack of german-speakers vs. english speakers globally. But, I believe a good part of it is probably because of the league’s lack of competitiveness. In India (developing market where EPL is cashing heavily on), we have fans for close to 6-7 top EPL clubs where I doubt if people know of any club from Bundesliga other than FCB (which affects broadcasting revenues)
    b) Poor country fan-following: Because transfers to FCB mostly happen inside Germany (from one german club to FCB), FCB lacks a cross-country following. For instance, any top league EPL club will have loads of players from outside England, which draws country-specific following in several countries. This in turn raises the club following globally and results in higher revenue streams.

    Agree, none of the above should be pursued at the cost club football performance, maybe testing it out while FCB is dominating the Bundesliga can help the club figure if it can extract more monetary value.

  7. Damian,

    Thanks for sharing this post. It would be very interesting to look at the differences between European football clubs and other professional sports franchises. Many US sports teams, especially baseball clubs, fail to turn profits despite large media markets and a large number of games. Perhaps some of these clubs need to take a look at FC Bayern’s operating model!

  8. Although not one to follow football, I thoroughly enjoyed reading this! I’ve often thought about what makes some sports clubs more successful than others, and that usually led me to believe it must be the club with most financial support, enabling them to “buy” the best players. It’s interesting to see there is a lot more to it than just acquiring top talent or young rising stars.

Leave a comment