Football and Law - Episode 2: Football clubs and cooperatives

Cooperatives are usually found in the areas of finance, housing and agriculture. What is new, however, is that football clubs are currently also interested in cooperatives. This year, the German football clubs FC Schalke 04 and FC St. Pauli want to become active with cooperatives. At the same time, a reform of the Cooperatives Act came into force at the beginning of the year and the United Nations has declared 2025 the Year of Cooperatives.

This is the second in a series of blog posts on the topic of football and the law. Based on current developments, the second instalment deals with the question of why football clubs establish cooperatives.

What is a cooperative?

A cooperative is a company the purpose of which is to promote the economic, social or cultural interests of its members through joint business operations. In contrast to other forms of company where the focus is on making a profit, cooperatives focus on the cooperative members and their support. Cooperatives are characterised by the so-called identity principle, which states that the members are at the same time co-sponsors of the cooperative's decision-making, investors by paying into the shares, and business partners of the cooperative. A cooperative is allowed to make profits, but must convert profits into support services (and not just money) for the benefit of its members. Furthermore, the cooperative is described as particularly democratic, as each member has one vote in principle, regardless of how many cooperative shares they have subscribed to. Members of the cooperative are not personally liable.

Cooperatives in professional Football

While the role of cooperatives as banks (providing their members with banking services) or in housing construction (providing their members with housing) has a long tradition in Germany, the interest of football clubs in this legal form is new. In the case of FC Schalke 04 and FC St. Pauli, the clubs want to secure their financing by founding a cooperative, issuing cooperative shares in return for the payment of a sum of money and raising a total of tens of millions. Financing through the issuance of cooperative shares is intended to strengthen equity without the clubs having to borrow money from outside investors. Purchasers of cooperative shares get a say in the cooperative and a share of the profits in return. In fact, according to their own statements, both football clubs have already issued over 10,000 cooperative shares and collected several million each (cf. reports by FAZ and The Athletic).

At both football clubs, the new cooperatives are to operate their respective stadiums. However, the legal form of a cooperative is not suitable for the licensed players' section. These are subject to the so-called 50+1 rule of the DFB statutes. According to this rule, the parent club must hold at least 50% of the voting rights plus an additional voting share. The (controversial) rule deserves its own blog post and is intended to prevent investors from gaining complete control over club teams. Compliance with the 50+1 rule is not possible in a cooperative because each member has one vote. Although multiple voting rights are possible, they are subject to strict limits.

Reform of the Cooperatives Act

The interest of football clubs in cooperatives coincides with a reform of the Cooperatives Act which came into force in January 2025. The aim of the reform was precisely to increase the attractiveness of this legal form. In particular, the cooperative projects at Schalke and St. Pauli directly benefit from the fact that the reform removes the written form requirement. Previously, membership of a cooperative could only be acquired by submitting a written declaration of accession. The legislator no longer considered a handwritten signature on paper to be in keeping with the times. Since the beginning of January, a declaration of accession in text form has been sufficient, meaning that membership can now also be acquired online. It is therefore possible to issue cooperative shares digitally.

The establishment of (funding) cooperatives as a financing vehicle is a form of crowdfunding. It is not limited to football and requires - in addition to compliance with the special features of cooperatives - a wide reach. Football clubs with a large number of members already have the latter. However, there are also large clubs outside of sport for whom this form of financing could be both interesting and viable.

Philipp Sahm
Chiara-Lucia Peterhammer