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Bayern's Uli Hoeness

The Rise And Fall of a Soccer Saint

Part 2: Jail Sentence Possible

Wednesday, 5/1/2013   06:35 PM

If the public prosecutor and the courts don't accept the late voluntary declaration, Hoeness may well have to go to jail. In 2008, the Federal High Court determined that for alleged tax evasion sums of over €1 million, the courts generally can no longer issue a suspended sentence. Even if Hoeness' lawyers manage to push through as many as deductions possible, they will hardly be able to reduce it below the million-euro threshold.

In addition to possible tax evasion, the charges could also include bribery in business transactions -- if, that is, it doesn't already fall under the statute of limitations. Why did Louis-Dreyfus gave his friend millions to go on a gambling spree? Was it a small inducement to help pave the way for the hoped-for extension of Adidas' endorsement deal with Bayern Munich? The agreement was renewed in September 2001, although Nike would have paid significantly more.

It wouldn't be the first dubious business deal between Adidas and the Bavarians. In the spring of 2001, the record-holding championship team was negotiating the transfer of Peruvian striker Claudio Pizarro from Werder Bremen. Pizarro had scored 19 goals the previous season, so he and his manager were asking for $7 million net income for four years, plus a one-off net payment of $8 million.

Since the Bavarians apparently couldn't or wouldn't pay this much money, Adidas stepped in. Pizarro was given an eight-year advertising contract worth $21.6 million, which was precisely the amount needed to end up with $8 million after deducting all taxes. The deal included a confidential side agreement ("only two originals, no copies"), in which the Bavarians guaranteed the one-off payment stipulated by Pizarro.

'I'm Almost Hopelessly Ambitious'

Why does a club or an individual go to such lengths? One reason is competition, the underlying principle of capitalism. Nowhere is competition as demonstratively practiced as in sports. It's all about performance and rankings -- there are winners and losers, champions and teams that are relegated to lower divisions. The best should win, but in football this dictum is increasingly associated with the pronouncement that, in reality, only the rich can win. Virtually no one has grasped this as clearly as Hoeness, who has transformed Bayern Munich into a stronghold of sports capitalism. He is the ideal man for this kind of system.

Hoeness, whose parents ran a butcher shop in Ulm, in the southern German state of Baden-Württemberg, wanted to move up in life, right from the start. Moving up was all about acquiring money, wealth and a large, successful business -- unlike his father, who never expanded his shop, and closed up the place if five pfennigs were missing from the cash register, and only reopened for business when the money was found. Football was one way of moving up. "I'm incredibly, almost hopelessly ambitious," Hoeness once said of himself.

There were bigger talents in German football in the late 1960s, but none of them were driven by such determination. Hoeness told his father to wake him up every morning at 5:30 a.m., so that he could go jogging before school. Out on the pitch, he rarely picked his brother Dieter to play on his own team because he felt he would jeopardize their chances of winning. Later, Dieter Hoeness went on to become a successful center forward, and spent part of his career at Bayern Munich.

Losing was the worst thing that could happen to Hoeness. He took it as a personal insult. When he was 15, he said to a teammate at TSG Ulm: "Look, the others are off to drink beer, and we'll play for Bayern Munich someday." Three years later, he was in a team with legendary players like Franz Beckenbauer and Gerd Müller. At the age of 20, he helped the team become European champions, at 22 he was on the West German national team that won the World Cup in 1974. He also took home the UEFA Cup Winners' Cup three times.

After the World Cup in 1974, Hoeness sold 300,000 books within just a few months, and personally signed each copy. He offered his wedding to the media -- for 75,000 marks. He posed for a menswear company in hot pants and with a bare torso. He opened up his half of a duplex to a tourist group, pulled on a pair of oven mitts and served them Leberkäse, a Bavarian meat specialty that's similar to boloney. He was a new kind of professional athlete, one who strove to turn every occasion into a money-making opportunity. After friendly matches, coach Dettmar Cramer would often say: "Gentlemen, I leave you in the hands of Uli here, you can settle everything with him!"

General Manager of Bayern at 27

An injury to his right knee put a stop to his meteoric career. At the age of 27, Hoeness became the general manager of Bayern Munich. "I put on a tie, sat down at a desk and after three hours there was nothing more to do," is how Hoeness described his first day at work. At the time, in 1979, Bayern Munich was a different club. It was 7 million marks in debt and the golden days were over, with Beckenbauer in the United States and Müller on his way there.

But Hoeness confided in his pal Paul Breitner that he would turn this scrap heap into "a new Real Madrid."

At best, it became a poor reflection of the elegant Spanish team. For decades, the team's style of play had remained relatively unrefined. Once they scored a goal, they would play a defensive, boring game to hold the score, led by football warriors like Klaus Augenthaler. With obvious delight, Hoeness snatched up the best players from other teams in the Bundesliga. In the early 1990s, when Karlsruher SC valiantly fought their way to the top of the first-division standings, they were practically bought up lock stock and barrel by Bayern Munich. One after the other, Michael Sternkopf, Oliver Kreuzer, Mehmet Scholl and Oliver Kahn transferred to Munich, followed later by Thorsten Fink and Michael Tarnat.

Hoeness struck another blow to his rivals' ability to compete in early December 1999. At the time, he signed a secret agreement with the Kirch media group, which operated TV stations Sat.1 and Premiere, which broadcast Bundesliga games back then. The contract secured the Bavarians the equivalent of some €15 million a year for the first three years. Starting in 2003, this amount was supposed to increase to €40 million. The reason behind the highly confidential agreement was that Bayern Munich had agreed to the central marketing of TV broadcasting rights by the League Commission. Back in the summer of 1999, the Bavarians had still insisted on being able to market their TV broadcasting rights themselves in the hope that this would significantly boost their revenues.

This plan failed due to resistance from other clubs. The Bavarians acted as if they were prepared to make concessions, but then signed the secret contract. Up until 2002, when the Kirch media group went bankrupt, some €20 million were deposited on account 6105308 owned by FC Bayern Sport-Werbe GmbH at the club's principal bank, Hauck & Aufhäuser.

'We Have to Become More Arrogant'

Later, in 2000, Hoeness argued before the League Commission in favor of accepting an offer by Kirch for the awarding of broadcasting rights, although at the time a considerably better offer was made by a rival. An assessment by Lovells law firm on the issue came to the conclusion that the Bavarians under Hoeness had been "bought" by the Kirch group.

His at times contemptible manner of beating the competition was often accompanied by notorious comments such as this: "We're going to slaughter our opponents." No wonder the rest of the country hated Hoeness and Bayern Munich. And Hoeness? He loved it. He said: "We have to become more arrogant." On the side, he set up a sausage making factory.

Success at any price -- that was one side of Hoeness. The other side was that of a patriarch who looked after his people. He made Bayern Munich into a family firm, although the core family still remains the team from the 1970s: Beckenbauer, Rummenigge and Breitner. Hoeness personally oversaw the alcohol detox of Gerd Müller, who found himself stranded in faraway Florida.

It's a two-faced kind of capitalism that reigns in Munich, on the one side brutal and arrogant, on the other dependable and caring. The club doesn't gamble with its funds and it doesn't have debts. In fact, it has €100 million in the bank and a stadium that will soon be paid off. A good 80 percent of FC Bayern belongs to its members, with Adidas and Audi each holding 9 percent. This is a team without a trace of Chelsea's oligarch, of the consortium of sheikhs that rules Paris Saint-Germain and Manchester City, or of Manchester United's US business tycoon.

Hoeness' FC Bayern is in perfect health, and that's one reason it's been able to draw someone like Pep Guardiola, considered the world's best soccer coach since his time with FC Barcelona. Guardiola picked a respectable team run by respectable people -- or at least so he thought when he agreed this winter to join FC Bayern.

Hoeness knew what was coming at that point, yet he continued to play his new role, that of the good, wise man who tells everyone how to live an orderly life and how to do sensible business. A SPIEGEL reporter accompanied Hoeness during those weeks in which he was simultaneously two different people. One side of Hoeness was the respectable soccer team manager and sausage factory owner. The other was the tax evader Hoeness, the man who had already turned himself in, the man who was later arrested and remained at liberty only in exchange for a hefty bail, still having to report twice a week to the police.

And all the time this was going on, Hoeness was hoping the public wouldn't catch wind of any of it, allowing him to maintain his image as a moral authority. Hoeness liked being described as a role model. It's unclear whether he was even fully aware of the double life he was leading, or if at some point he stopped noticing the contradiction between the public figure and the private citizen.

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