Hamburg have taken just a point from their first two Bundesliga games after they followed the 3-3 draw at Schalke on the opening weekend of the season with a 5-1 hammering at home to Hoffenheim last Saturday.
Furious coach Thorsten Fink gave his players two days off after the debacle, then threw defender Dennis Aogo and midfielder Tomas Rincon out of the squad to play Hertha Berlin away on Saturday for using the time to fly to Mallorca.
"In my opinion, the club is amateurish on all levels. The Hamburg house isn't so much on fire as ablaze," 76-year-old Swiss investor Klaus-Michael Kühne told Hamburg newspaper Abendblatt.
"I am incredibly disappointed by coach Thorsten Fink, his decisions are incomprehensible to me."
Kühne called for former Hamburg midfielder Magath - who scored the winning goal for HSV in their 1983 European Cup final triumph against Juventus - to be brought in as president to make structural reforms.
Magath also coached Hamburg before leading Bayern to the 2005 and 2006 titles and then Wolfsburg to Bundesliga glory in 2009.
"He could give Hamburg the much-needed boosts," Kühne said of the 60-year-old Magath, who has earned a reputation in Germany as a hard task-master.
Kühne went as far as to call current club manager Oliver Kreuzer "third division", branding him "the wrong man in the wrong place".
In response, Kreuzer, who only took charge in June, told Sky Sports News: "Mr Kühne doesn't have a football background and is far away from football business, otherwise he wouldn't make such statements.
"It is a disaster when individuals believe they can defame everyone here."
Having played a key role in providing the finance to bring Dutch midfielder Rafael van der Vaart back to Hamburg from Tottenham Hotspur in August 2012, Kühne said he will not provide anymore support unless changes are made.
"Without structural reforms, as an investor I am no longer available," the Swiss insisted.