As of: January 31, 2024 10:15 a.m
It would be a novelty in German professional football: FC St. Pauli is planning to found a cooperative this year. The idea already existed a good five years ago, but was then rejected. This time the chances are better. But why now? And what consequences would this step have for the leaders of the 2nd Bundesliga? The most important questions and answers at NDR.de.
Cooperative: What’s behind it?
In Germany there are around 7,500 cooperatives in a wide variety of areas: energy, real estate, utilities, credit, agriculture, … The aim is not to make as much profit as possible. Rather, the members of the cooperative should work together towards a goal and also benefit from it together. True to the motto: One for all – all for one!
Practically anyone who purchases one or more shares in the cooperative can become a member. The special thing about it: Regardless of the number of shares and the amount of the investment, each member only has one vote in decisions. This is one of the reasons why cooperatives are considered grassroots-oriented, democratic, sustainable and particularly crisis-proof. Thanks to extensive testing regulations, the insolvency rate is just 0.1 percent.
What makes a cooperative so interesting for FC St. Pauli?
FC St. Pauli needs money. Among other things, for the planned expansion of the youth training center at Kollau. One possibility would be to get one or more investors on board and sell shares accordingly. For example, the professional department could be outsourced. Given the threat of dependencies and external influence, this option is considered impossible for the member-run FC St. Pauli. Likewise sponsorship measures such as the sale of the stadium name.
The cooperative model could close both gaps at FC St. Pauli: on the one hand, secure the urgently needed capital, and on the other hand, ensure that decisions are made on the broadest possible membership base. Cooperatives are primarily aimed at small investors who want to have a say and get involved, regardless of their investment.
Why does FC St. Pauli need capital at all?
President Oke Göttlich emphasized at the most recent general meeting that the cooperative was not a measure to plug holes in the short term. But the fact is: FC St. Pauli reported a loss of 4.9 million euros for the past 2022/2023 financial year.
The equity capital, which was previously around 14 million euros, has now almost been used up. On the one hand, the sale of cooperative shares would enable investments that FC St. Pauli cannot make from its operational business. On the other hand, the income would also strengthen equity capital and thus enable better loan conditions from banks.
Of course, reaching the DFB Cup quarter-finals also helps to stabilize the financial situation. Reaching the round of the last eight, which was the final stop for Hamburg after the dramatic elimination against Fortuna Düsseldorf, costs 1.7 million euros. However, this should have no influence on the cooperative plans.
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What do investors get from a FC St. Pauli cooperative?
One thing first: It’s not about the game operations or the professional department. A cooperative is being discussed that, after the renovation and new construction, will include shares in the youth and performance center on Kollaustrasse. The previous center in Schnelsen will be abandoned for this purpose.
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The cooperative will also have shares in Millerntor-Stadion Betriebs GmbH and Co. KG. The main issue is the marketing and leasing of the Millerntorstadion to, among others, FC St. Pauli. It was said that further individual projects could be incorporated into the cooperative later. It remains to be seen how high the return will be for investors.
And the 50+1 rule?
…is considered problem-free here. Because the 50+1 rule applies to the professional teams in the clubs and the game operations. But that is not affected by the current plans anyway. Apart from that, in previous plans, only a minority stake in Millerntor-Stadion Betriebs GmbH and Co. KG was to be brought into the cooperative. That’s probably how it will be this time too. In other words: FC St. Pauli retains at least 50.01 percent of the votes. Not because of the 50+1 rule, but rather to not lose influence on this part of the club.
What is the catch?
Even with cooperatives, the small print matters. Are returns paid out to members or are reserves created for bad times? Are there so-called additional payment obligations if things don’t go well? In other words: Do members have to inject additional money if necessary? And what shares does the cooperative actually contain?
Five years ago there was talk of only bringing a minority share in Millerntor-Stadion Betriebs GmbH and Co. KG into the cooperative. The influence would have been correspondingly small because the club would still have held the majority. Former managing director Andreas Rettig declared at the time: Nobody would get rich. But he could promise an emotional return.
And for the club? He initially benefits from the deposits – but only once. From then on, business success counts. Unless further shares are issued. A second disadvantage is the return obligation. If numerous cooperative members want to return their shares at the same time, the association could find itself in a difficult financial situation. Even if the shares only have to be bought back at their nominal value – i.e. the issue price.
The idea is a good five years old. Why now?
This is primarily for tax reasons. The stadium is on municipal land, but belongs to FC St. Pauli. And here tax deadlines have thwarted the previous plan of ex-managing director Andreas Rettig. Essentially, this is about the gradual conversion of the Millerntor Stadium, which was officially referred to as a reconstruction.
However, if the tax authorities had classified the renovation of the south curve, the main stand, the back straight and the north curve as new construction, a period of speculation could have applied. After that, profits must be taxed unless a new or newly acquired property is held for at least ten years. Only then are profits generally tax-free.
The bottom line is that there was a risk that the cooperative sale of stadium shares to small investors would have cost FC St. Pauli a lot of money. This deadline has now passed. However, an examination process is currently ongoing. This involves, among other things, legal and tax issues. It is unclear when the process will be completed.
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Sports current | 01/30/2024 | 11:17 am