A foreigner could be forgiven for never having heard of SV Babelsberg 03. In truth, most Germans haven’t heard of them either.

Babelsberg is renowned for being the home of the German film industry, but its failing football team have never had any Hollywood moments. In recent months, however, the men from Potsdam have been involved in an episode that’s part underdog story, part legal drama and part zeitgeist thriller.

The tale began last April with a derby match in the Regionalliga Nordost, Germany’s fourth tier: Babelsberg, the hosts, faced their bitter rivals, Energie Cottbus. Babelsberg’s fans are known for their left-wing politics, while Cottbus have been among the worst offenders in the former East Germany when it comes to right-wing hooliganism. On top of all this, the pair hadn’t met in the league for over 25 years. You can probably see where this is going.

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The match was stopped on several occasions as Cottbus hooligans attempted to storm the home section. There were chants of “Arbeit Macht Frei, Babelsberg 03” and “Zecken, Zigeuner und Juden” – “Ticks, Gypsies and Jews” – as well as Hitler salutes by masked Cottbus ultras.

What marked out this particular conflagration was the reaction of the league. The Northeastern Football Federation (NOFV) fined Cottbus €10,000 for their fans’ behaviour, but there was no mention of racism or anti-Semitism. The fine was later reduced to €6,000 (€4,000 of which was suspended), while Babelsberg were ordered to pay €7,000. They refused, even though they were risking their place in the league – and almost certain bankruptcy – by doing so.

This initial resistance, though, was just the beginning. Babelsberg launched a campaign called ‘Nazis Get Out of the Stadium’ and began selling t-shirts to raise awareness and money for their legal defence. They gained over 200 new club members in solidarity and sold thousands of shirts. Supporters of Celtic, Real Betis, Bayern Munich and Borussia Dortmund were among those to pledge their support.

As the NOFV began proceedings to kick Babelsberg out of the league, political pressure forced the German FA to intervene. A deal was struck: the club would pay half of the fine, but only on the condition that the money went towards funding anti-discrimination campaigns.

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Babelsberg are almost a caricature of the German left: nobody seems to take their games too seriously, the stadium food includes the requisite vegan curry option, and the fan base includes more white people with dreadlocks than you would usually expect to see at a football match.

Stereotypes aside, the activist nature of the Babelsberg support is the club’s defining feature. At the height of the 2015 migrant crisis Babelsberg formed a team for refugee players, while all refugees are able to attend their home games for free. In 2014, they invited Thomas Hitzlsperger to launch a new anti-homophobia campaign at their stadium.

The roots of Babelsberg’s politics can be traced back to industrial times. Their socialist pedigree is impeccable: the club play in the Karl-Liebknecht-Stadion on Karl-Liebknecht-Straße and, in previous incarnations, were known first as Karl Marx Babelsberg and, after a link-up with a local locomotive works, Eastern Bloc SV Motor Babelsberg. When the Berlin Wall fell, squatters in Potsdam began attending the Motor’s games, a counterpoint to the general right-wing trend that was sweeping through the former DDR’s football scene.

Which brings us to the other party in this discussion. Energie Cottbus share the same state-sponsored roots – as their name suggests, their association was with a local coal mine – but their reaction to the end of socialism was rather different. By the end of the 1990s, Cottbus had become the most successful team from the former East: despite a fairly mediocre existence in the DDR-Liga, they reached the German Cup final in 1997 and, by the early 2000s, were regular fixtures in the Bundesliga.

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The town itself wasn’t doing quite as well, however. Squashed up against the Polish border like a post-Communist Carlisle, the city of Cottbus based its economy on coal mining, which collapsed alongside the state that controlled the industry. It lost a third of its population within a decade, and those who stayed suffered mass unemployment, a lack of investment and disillusionment with the new Germany.

Racism and xenophobia were never far away, and the aforementioned right-wing trend which encompassed much of East German football in the 1990s and early 2000s was taken up enthusiastically by the hooligans of Energie Cottbus. It goes without saying that Cottbus, as an economic backwater ravaged by population loss, has had almost no inward migration and possesses an ethnic minority population of just six per cent, one of the lowest in Germany.

Inferno Cottbus – one of the strange asides of this episode is that both club’s ultras are called ‘Inferno’ – had a long rap list for anti-Semitism and racism.

“We are done with the conspiratorial ranting,” they said in a statement after disbanding. “For no longer will we be the scapegoats for the failings of others. The name ‘Inferno Cottbus’ is forever inseparable from the fan scene of FC Energie Cottbus – a fan scene that we now leave lying in ruins.”

An official from Energie, Stefan Scharfenberg, described his club as victims: “We’re not a Nazi club – we’re the victims of those who want to use our club for political abuse.”

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Energie have subsequently banned Inferno Cottbus (whether they still exist or not) and launched an anti-racism campaign. Perhaps they might receive some of Babelsberg’s fine to help fund it.

Cottbus are far from the only neo-Nazi club kicking around the East German lower leagues. When Babelsberg fans were attacked on their way back from a game this season, there was plenty of discussion over the identity of the culprits, with Halle, Lokomotive Leipzig, Chemnitzer FC, BFC Dynamo and, of course, Energie all seen as potential perpetrators. The other left-wing team in the Regionalliga Nordost, Chemie Leipzig, have also been subject of anti-Semitic abuse from rivals Lokomotive Leipzig, while last September fans of the national team were heard chanting “Sieg Heil” during a World Cup qualifier against Czech Republic.

Babelsberg and Cottbus faced off again recently, though no away fans or colours were present. As the two predominant teams in Brandenburg, they will meet again in the state cup final at the Karl-Liebknecht-Stadion on Monday evening.

More generally, Babelsberg hope to continue their fight against racism and show that, despite the prevailing trends which saw the anti-migrant AfD party take 20 per cent of the Brandenburg vote at last year’s general election, football can be a progressive force in the former East.