Hannover 96 failed in court in an attempt to get rid of managing director Martin Kind. A contract disclosed by the “Süddeutsche Zeitung” shows why. Was 50+1 injured? Could the DFL even refuse the license?
He has the money, he has the power – and possibly even a stranglehold on the second division soccer team Hannover 96. Because the fact that the club from the Lower Saxony state capital wants to get rid of its managing director Martin Kind and that this request failed at the Hanover Regional Court for the time being has received a piquant note through research by the “Süddeutsche Zeitung” (SZ).
According to “SZ”, there is a previously secret contractual agreement from 2019 that makes it almost impossible for the club to part with its multi-million dollar investor. The German Football League (DFL) waved the contract through – and obviously had no concerns about the 50+1 rule. Which can give the matter far-reaching significance
What is the 50+1 rule?
The 50+1 rule is part of the statutes of the DFL Deutsche Fußball Liga eV It stipulates that a corporation can only acquire a license to participate in the Bundesliga or Bundesliga 2 if the respective parent club holds a majority interest in the corporation, i.e. holds at least 50% of the voting shares plus one further voting share in the meeting of the shareholders involved in the corporation. For the area of the DFB, the DFB uses an identical regulation.
Source: dfl.de
What was agreed three years ago between the child and the registered association behind closed doors has so far remained hidden from the general public in its full scope. The seemingly irreconcilable parties to the conflict – the members of the Hannover 96 association (eV) and the hearing aid entrepreneur and professional football shareholder Kind – signed a joint paper: the so-called Hannover 96 contract.
Contract passage: Nothing works without a child
The decisive passage of the 21-page contract, which the “SZ” has, can be found on page 14. It says: “H96 eV undertakes not to change, supplement or replace the articles of association of H96 Management GmbH or without the prior written consent of H96 S&S.” Kind is the majority shareholder of Sales & Service GmbH and Management GmbH, which he manages as managing director, is considered the real power center of the professional department.
“Downright prophetic”, according to the “SZ”, in view of the most recent legal disputes about Kind’s dismissal, the addition: “The above regulation applies overall, but in particular to the passage of the articles of association, the function (appointment of the management of the company) and composition of the supervisory board of Hannover 96 Management GmbH.”
Child a CEO for life?
For the eV this means that it can no longer change something in the contractual agreement without the consent of the capital side (i.e. mainly the child) and has therefore also given up the possibility of redesigning the statutes in such a way that the managing director can be fired if necessary. Appointment and dismissal is the sole responsibility of the four-person supervisory board, which is made up of two representatives from each party – i.e. from the eV and delegates from the child side. This means that if there is disagreement between the two sides, there will always be a stalemate. And the possibility that the club chairman would have the last word, for example, is ruled out by the contract signed in 2019.
The club structure of Hannover 96.
SZ: “Crowbar” 50+1 no longer exists
“The legal crowbar that protected 50+1 in Hanover no longer exists,” says SZ editor Philipp Schneider in the sports club. “In my view, the rule only applies if the eV is also the master of the house. It is no longer.” Precisely because the managing director in Hanover can only be dismissed or hired again if both parties agree, the attempt by the 96 club representatives to remove Kind from his post by resolution of the shareholders’ meeting of Management GmbH failed in July.
“Mr. Kind does not comply with the guidelines of the association, although he is also obliged to do so from the point of view of company law. Working together is no longer possible.”
— 96 Deputy Chairman Robin Kraków
But although the club representatives have brought forward no less than 102 alleged misconduct by the 78-year-old, the regional court rejected a dismissal for important reasons a good two weeks ago. Now the Higher Regional Court has to decide. Child does not want to comment at the moment.
authority a blunt sword
The Hanover Regional Court referred directly to the Hanover 96 Treaty in its decision. The eV’s attempt to circumvent the supervisory board by terminating the child was a “statute-breaking resolution” that contradicted the agreements made in the contract. “The defendant’s allegation,” the court continued, “that Martin Kind had persistently violated the instructions of the association was not relevant to the decision because of the lack of dismissal authority.”
The eV side had led against Kind, among other things, his unauthorized engagement of coach Stefan Leitl before this season. But: According to the applicable statutes, Kind’s dismissal would have had to be decided by a majority of Management GmbH’s supervisory board. A blunt sword – thanks to the 96 contract.
The question remains why the club signed this contract at all? Did the threat of insolvency three years ago leave no other way out? In any case, the eV was officially very satisfied in those days in view of the urgently needed help in the millions from Kinds Sales & Service GmbH and the possibility of being able to participate in the trademark rights again. “Actually, it was inconceivable that this day would exist. But we managed to get everyone satisfied with this agreement,” said eV President Sebastian Kramer at the time.
50+1 – and the way through the back door
The real beneficiary, however, is likely to be the 78-year-old child. In striving for an exception of 50+1 – as the DFL only grants the works clubs from Leverkusen and Wolfsburg as well as TSG 1899 Hoffenheim, which grew up under the entrepreneur Dietmar Hopp – the majority shareholder had failed. Now he has sneaked past the rule through the back door, which is actually supposed to make it impossible for investors to incorporate the decision-making power of the club representatives in German football elected by the members.
League Association sees the club’s right to issue instructions
So Hannover 96 screwed it up themselves to be able to get rid of the child. Or as Schneider calls it in the SZ podcast: “The club shot itself in the foot”. But why did the DFL wave the signing of the contract three years ago? Because the registered association, as the sole shareholder of Management GmbH, still has an unrestricted right to issue instructions to the management, the league association announced. The only question is why a managing director should follow these instructions when imminent consequences can be blocked by his own confidants on the supervisory board?
Does 96 possibly have to worry about the license?
“Removal for an important reason cannot be ruled out either under the articles of incorporation or by contract, and it wasn’t,” argues President Kramer and, like other eV representatives, hopes to be able to hire a managing director after all. Regardless of the court decision and also regardless of the sensitive clause in the Hanover 96 contract.
And what does the DFL do? After becoming aware of the consequences that the delicate contract could entail, is she even considering not granting the license to the second division club? The “SZ” wants to have at least recognized a growing nervousness in the league headquarters. If it turns out that legal instructions from the eV representatives were not being followed, the DFL wrote on request that they would “re-examine the compatibility of the corporate law and contractual structure in Hanover with the 50+1 rule”. Which could ultimately mean: no license for the coming season.
Blueprint for copycats?
Legally, however, this would be on shaky ground. Judge Carsten Peter Schulze had already made it clear on the most recent judgment before the district court: “The impact this has on football is something that is not the focus here.” Apparently, Kind only has to refer to the contract, which was not objected to by the DFL in 2019, which grants the right to his dismissal to the supervisory board alone.
The DFL may even have opened a loophole for imitators – a Trojan horse, as the “SZ” suspects. Shareholders and investors in other clubs could follow the Hanover example and demand the same powers as a non-terminable managing director, Martin Kind. Provided they find club representatives who put their signature under such a momentous deal.
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sports club | 10/30/2022 | 10:50 p.m
