Inside Bayern Munich: Business of Sport Special

Oh Bayern Munich dominates German club football now one of the world's most successful clubs and biggest sporting brands the trophy cabinet is packed they hold the record 25 German titles and 17 national cups they're five times European champions and FIBA World Club winners in 2013 this is their home ground for 75,000 seater Allianz Arena opened in 2005 in cost 340 million euros to build it's hosted a Champions League final and World Cup games the club itself made 500 million euros last year that's the third biggest in sales when it comes to a club in global football it also has been in the black for 22 consecutive seasons that's an exception not the norm in world football last year bian made 20 million euros in profit 1/5 of that came from selling merchandise each year they sell around 1.7 million replica shirts that's more than all the other Bundesliga sites combined they gave us behind the scenes access as we spoke exclusively to German football legend and by Munich chairman karl-heinz Rummenigge er as well as Spanish World Cup winner shabby along of this week's business of sport now with Rama Nagar over 300 appearances and 162 Gold's for by noon twice the European Footballer of the year 95 international caps and 45 goals for West Germany Evans Col Heinz rumor he's one of the biggest names in European football now he's back his chairman at the club where he made his name English boots affirm this week I sat down with him at the club's headquarters its central noon aching don't wanna loose of the rules of football for an exclusive interview on Bayan strategy mr. uma daga thank you very much for talking to us here at Bloomberg let's start with the business side of a by Munich last financial year you've surpassed half a billion euros in revenue for the first time you have little debt you have local investors how can you sustain this what seems to be forever rise in revenues how can you sustain this model so first of all I believe it is very important having success on the pitch and then we can work about the success of the pitch I believe by unfortunately was in the past 34 years very successful on the pitch beginning in the 70s when we had the big guys like Franz Beckenbauer get Miller said Maya and so on on the page yourself and and these team was very successful winning three times in the row that Champions League at that time and that was a basis the roots of the clubs of our club and then time by time we was able to to have a kind of continuity on the pitch and and we worked especially in the past 10 years in partnerships what we can do to have a stabilized economy basis and so we we convinced partners like adidas a 12 13 years ago to be shareholder in by a Munich company because we had the big project the Alliance arena to build up and in the meantime we we convinced to more important partners like Audi and Aliens insurance to be shareholder of buy Munich and that that so we have a strong basis on the pitch but I believe a strong basis as well off the pitch so we can be very optimistic looking in the in the future if we split revenue into three compartments there's matchday broadcasting and commercial matchday you lag behind four teams in Europe which leads to the question could you will you why don't you raise ticket prices because to be a season ticket holder at Bayern Munich it's it's incredibly cheap versus Premier League teams in England yeah should you could you why don't you raise ticket prices to to raise your matchday revenue so we're we're as you said it's right we are much cheaper than our friends in England Italy Spain France as well so from the big Five's way as the cheapest not just buying alone the whole league is relatively cheap in comparison to these countries the problem of the problem is is a kind of philosophy I would say so we have the philosophy that the ticket price is on it let's let's call it a social basis so we want to care about that if you go to buy Munich that at the end is not depending just buy you your pocket that you are able to get in trance entrance in the stadium or not so we have still I would say rich prices regarding our lounges or business seats where you pay for it for instance 12,000 euros per season but then we have as well very social basis that the stands just costing hundred fifty euros per year for 70 games 17 games so we try to have let's let's call it a social basis between the rich and unfortunately not the rich people that we care about that I would say it is a kind of filthy philosophy as well that the we don't want to loose if the roots of football football I believe is is belonging to fans and the fans like to go into stadiums and so we want to care about that the fence are able to pay relatively let's call it good process and let's talk about broadcasting because I think when it comes to broadcasting rights Bayern Munich in the top 20 clubs in Europe its 10th 11th the German league when you compare with justa Premier League I mean it's it's lagging way behind isn't it can the German leak and the Bundesliga whichever one can it close the gap when it comes to broadcasting rights or not why is there such a gap so first of all we have an incredibly big gap between pay TV England and pay TV Germany first of all I believe we in Germany the leak may make big mistakes if we talk about 10 12 15 years ago where where pay TV market was established and then build it and developed in England so we was very slow believing that the clock may be in Germany is going different than in England but it doesn't go different so that is a big big problem now you see that in the actually transfer market and because England have so much of the English clubs have so much money available in that market that it is not easy to defend that we keep our players as well here Bayern Munich like Thomas Miller or like players from Real Madrid like Sergio Ramos because they have big requests from England and so it is very difficult to keep them but we have to do we have to do better in Germany because it can't be it can't be happen that just see Bundesliga the first league is getting something like half a billion euro income if you compare that to the English market where for instance the number 20 of the Premier League is getting likely the double of Bayern Munich as German champion you can imagine how how long these could work because especially in the transfer market so I believe we are very creative very good in sponsorship very good in merchandise very good in commercial your number two to PSG are we are we are a very good in these but so I believe the creativity is quite limited in comparison to the broadcasting money so we have to do much better in Germany and that is really an obligation for the German league to cash in money in favour of the club's to to be more come to to have a better comparison against the English classes Bayern Munich success has made them a household name across Germany now they're setting their sights on a global fan base the team has just returned from China where they sold out stain that were greeted by thousands of cheering fans the fine Munich recently opening offices in New York and Shanghai we asked Truman eager about his plans for global expansion the brand is very strong by Munich it was number one Manchester United overtook it last year according to brand finance you will you're the world's number two brand that's based on a clubs ability to monetize its global recognition what more can buy nunik do to boost your global recognition what would you say the key is to harnessing your brand I believe we are handed precent strong regarding the home market in Germany I believe everybody if you go on the streets asking who is by a Munich probably 100 percent can give you an answer I believe what we are doing now is to go abroad especially in the States and in in Asia especially in Asia in China because it's by far the biggest market so we going there to bring the club closer to offense in Asia and in the States to to show the people that buy what is buying unique for what stands by a Munich and what is buy Munich may be different than English claps alike and what how are you different I mean you were late to the China party you've said that the Premier League clubs were there way before you you've now got a presence in China I gather you're going to open an office in Shanghai as I correct let's Graham how can you show your difference to the to the other big European clubs who are already present in China so I believe we can show our different being different because we just want to not go alone therefore cashing money quickly so we want to establish partnerships so we try to get in close in closer partnerships let's call it we want at the end of course we want to earn money in depth countries in that regions but we are always ready to give up and to help them in supporting football in their countries I believe in the States soccer is on a very good way football in in China is on a good way but however they need help to establish the quality of these big quantity they fortunately have available so I believe we can do a lot for Chinese football we can do a lot for American football and we try to do so to help them at the end the outcome has to be good for both for Bayern Munich and for the football in the States and in China do you worry about China especially the headlines in recent days it's it's an economy it's a market system that's going through troubled times - does that affect your supporter on the ground or not no not really not really absolutely no because when we had our two of these here in China playing in Beijing Shanghai and Guangzhou third one so we had still the impression that economy is a bit slowing in comparison to the past years but and we had some talks and discussions with partners who followed us on that tour like Allianz like Audi Volkswagen and so on and we had the we had the clear sign however that is a question of time now so maybe after always growing growing growing heav'nly growing maybe it's no a couple of months hopefully just months that the economy in China is slowing but no no no worry about we are not worried about what are the new markets you mentioned the US you have an office in New York outside the US outside China what are the new markets that you're going to be pushing into the untapped markets yeah that bian has to be pushing into an incoming ears I can imagine that we go to a market which maybe he's not very developed in football on and not escape by many football clubs like like India in there is a big big market in the world many many people are living there and football is in comparison to hockey or to other sports in India not very popular but I believe there is still a big market because they established a leak last last season last year and I believe that is something what we can do together with our partners going there together with editors with Audi with aliens to - - to help Indian football to develop that as well in our favor can we talk about domestic matters once again the 50 plus 1 rule which to many English fans is it's it's it's a strange rule but it's quite simple the fans have to be in control of 51% of each club there are a few exceptions to this rule and these exceptions is causing slight annoyance among fans in Germany do you do you underst do you accept the annoyance I mean we're talking about Hoffenheim here you know we're talking about by Ally Baku sir nor Wolfsburg people are looking at Leipzig Hannover is the rule being diluted is it a bad thing for football should the function should the rule be banned what's your view first of all from the legal point of view this rule is not in line with the low with the European law doesn't work and so we had a case here from Hannover but the Chairman or the boss of innova was troubling that rule and he was close to to open a legal case in in Luxembourg at the ogia and I believe fence like its likes it but they love it and I had some some interesting experience when we played I believe quarter final two years ago in Manchester so there had been many supporters with a green and yellow shirt that's right and I asked one of them what is the reason that you were wearing the green and yellow shirt and they said so we don't like the Glazers we don't like that they're that they take over the club and and we don't like that and so we don't want to help them buying the original shirt and it was an interesting experience for me and then and then they said to me we laughed by a Munich because you're independent so I believe the supporters laughs in dependency of the clubs is in a working financial type like in Europe or not telling is the truth it's very difficult to understand actually financial fair play because when I see the transfer activities from certain clubs who had been penalized a year ago yeah it's very difficult to understand if financial fair play this year is different and how it works and I what I'm I'm missing a bit is a transparency how it works because I understand the rules but I don't understand the rationality actually of the whole system and that is not up to me it's I received many telephone calls what has happened in the market because a year goes some clubs have been penalized and now they came back stronger than before and it's very difficult to understand and I believe it's up to you a fir to make it more transparent and to make it more understandable for the clubs that was by Munich chief executive officer karl-heinz Rummenigge up next I speak to current player and Spanish star Xabi Alonso he's won everything there is to win on the pitch what about off the pitch we speak about his investments and his life after retirement shabby Alonso has won it all from the World Cup champions league titles at almost every European trophy in between the Spaniards been playing professionally for 16 years and last year transferred to Bayern Munich following the glitt'ring five years at Real Madrid we spoke exclusively with the Spanish midfielder at baiance training ground I asked him which league is Europe's strongest it's been great experience but not it's hard today which one is the best of course I really liked it primarily because it's the weights it's been broadcasted all over the wall and the weight you have to watch the game and I finished potato probably is the best like they both they're primarily okay I don't spectator front and on the television front internationally can the Bundesliga ever compete with the Premier League in you look at the TV rights money and the Premier League is way ahead how can the Bundesliga catch up how can buy a new Knick catch up with the Manchester United's of this world well I think that in our case particularly biomimetic we can't compete with all the teams financially talking about because you see there they all the income that they confirm from merchandising Zonday from the stadium from the civil rights and they have big it's very well balanced but of course to compete with the Premier League it's really tough because they are years ahead of of La Liga of Bundesliga in terms of selling the TV rights in terms of merchandising and all over the world they have they have been doing this work to have like an a worldwide brand for years and I mean in dusters it's hard to compete that I think that it's good that the Bundesliga juggling for the last use the teams the level of the team is getting better which League to play next or very silly well I don't know I don't know I 33 now so the the end is getting closer to getting closer I don't know what is your final Club at the top or I don't know I I don't who knows at the moment I am focused on in this session but but for sure and I will have to take it would you be happy now having just played in those three big leagues and what I would like to add a little yeah because she saw well so I'm fine happy because you know I I love football and out of there the the groups with big tradition big history and so far I came from social and my Holden that's what I wanted to play after I went to Liverpool you know all the history Real Madrid tan Champlin and coming here to buy a little acre a nice mmm and I scrape table for Gloria a butcher that can you compete with Barcelona I mean de de de were the team of yeah Europe last you know the last year Real Madrid before to Spain seemed to have well actually the dominant team that the Champions League you wanted the year before Bayern Munich is it going to be difficult to stop the dominant Spain's hi Sarah fine now are there in this sentence Chavez League which is amazing isn't it yeah just but of course it's gonna be tough because once you are in the semi-final eyes you know that what a final semifinals did you know that you are going to face one of the best things in Europe and whenever you're paying Madrid or Barcelona that they are fantastic fantastic teams anything can happen but we need to to get ready for that moment but I wouldn't say that at the moment there is Spain's dominance because before the as you said the final was between buyer and doorman yeah few years ago since they were over their Premier League team so pretty poorly the football is has will a little bit like a cycle there are cycles and there was the privilege cycle the German one the Spanish ones of the good thing is that you don't see a clear favorite there are five six top teams in Euro there for sure contenders for the Champions League you want everything literally World Cup European Championships Champions League National League's national cups what's left what what keeps you going well you literally want everyone is to wait for say for me the most important is that is it the collective accomplishments and one but as an individual as a follower you know I have that thing that winded the third chaplet will the third Club it will be like like the ice on the cake to say no the ice on the cake for me it will really not only a shadow pass achieved Adam and it will be great the achievement but it's gonna be a different one I will try that you've obviously been very successful both on on the pitch and financially you've been rewarded for that our football players advised enough on where to put their money how to manage their money in your experience would you say there's enough advice for players well prolly from it depends a lot off of the background you have for how you are raised you know I understand in some cases is difficult to cope with with that thing with that big money that comes suddenly into your hands and to be able to manage it in the right way probably you are you don't have the formation or your parents they don't have the formation and that's why you have to be surrounded with with great advisors but it's difficult as well to find that that people to trust your money where you are going to put that because from my case I was lucky enough to my parent he was a football player as well and we were led life we've had like a good good advice also good a good chin we've had so I've had no problems but it's not easy to deal with that - Dutch strong change to take an active yes right it I take your body I mean you keep healing yeah yeah yeah I try to have a control of my finances to have like a business plan because you know that if you in ten years you get great great amount of money but you need to try to be smart enough to to be able to not to to have enough rent and and not return for the full of future as well can you give us an idea mean well I try to over so file on on real estate or in the stalks of Havana a nice portfolio to not to be hit with this suddenly China crisis or to with financial crises you to have a diversified portfolio biology a of global financial markets yes I do I do I do keep an eye because I have some investment in those in those areas and you need to keep an eye on and as I said before the end Paul is closer so I need to be more more focus on those things of the Spanish economy is rebounded are you surprised it's it's the sort of the strong economy right now in Europe on a rural level the Grove values around three three point three point three percent so that's that's great news because the the crisis hit really hard Spain and you know the measure that had to be taken we're really tough but of course the macro numbers are are looking really good for for Spain probably for the people on the streets it's still very hostile I the unemployment rate is really high so it's it's it's not easy to to differ for those people that but probably in the Loden they will they will notice that and hopefully not just Spain and Europe will will get better and that's going to be good thank you very much thank you sweetie goodbye one you

Channel: Bloomberg Quicktake

Views: 48,347

Rating: 4.9011531 out of 5

Keywords: Bloomberg, FC Bayern Munich (Football Team), Football (Interest), Sports (TV Genre), soccer, world cup, FIFA World Cup (Football Competition)

Id: 2I4Gj78yjCA

Length: 26min 31sec (1591 seconds)

Published: Thu Sep 17 2015