ABSTRACT
Rationale: The paper examines whether the concept of the soft budget constraint (SBC) helps understanding how lower tier football coped with the revenue drop during the COVID19. Design: A qualitative research design relying on expert interviews and document analyses was employed. A sample of five clubs was examined using process-tracing methods. Findings: Overspending and debt-making are persistent features of German lower tier football. Before the pandemic, clubs benefitted from distinct bail-outs. The revenue drop during the pandemic was primarily compensated by public subsidies;clubs also got money injections from fans, sponsors and investors. Yet, shareholder structure matters for the likelihood that clubs faced hard budget constraints. Practical implications: The system of promotion and relegation facilitates overspending and debt-making. The specific corporate of German football clubs encourages moral hazard and creates hold-up risks. The public seems to have become more hesitant to grant bail-outs. Research contribution: The concept of the soft budget constraint is instructive for understanding the specific economics of European football but its limits have to clearer specified. © 2022 Informa UK Limited, trading as Taylor & Francis Group.