ANDREW EKEJIUBA
With European football treading carefully and attempting to remove itself from the vice like grip of coronavirus, a new landscape is now emerging and one that has financial matters at the very heart of it. Much of the focus in what people are hoping is the post-pandemic phase, has been on the value of television rights and whether they can hold their own in an environment that has not been conducive to large media expenditure.
Thankfully, the early examples have been positive and although the Bundesliga recently announced a small downsizing in terms of overall rights values, there was at least reason to be optimistic within the German football community.
However, that optimism would have been tempered slightly by the news coming out of Signal-Iduna Park and it is news that may have the Borussia Dortmund finance department losing a night’s sleep or two.
That’s because, the black and yellow of Dortmund have reported an eye-watering loss of €43.9 million for the 2019/20 financial year and if they have reported figures in the red, one wonders if that will be the same picture across the division.
While to put this loss into further context, just 12 months ago a profit of €17 million profit was recorded – in percentage terms that equates to a swing of -358% from one year to the next and enough to make any of their supporters nervous.
In addition to this, the impact of coronavirus has been made even clearer when comparing the first nine months of the financial year to its remaining period. In the first three quarters of the year, a 6.3% sales growth was recorded and that was then followed by a 25% loss in the fourth.
All their prosperity had been wiped out in crippling three-month window and with the prospect of stadiums still operating behind closed doors, the start of the 2020/21 season does not paint anything resembling a brighter picture.
With five of their 2019/20 fixtures being played in almost silence, that would have undoubtedly created a huge dent in the Borussia Dortmund balance sheet and especially when 80,000 paying customers are usually in attendance.
This lack of matchday revenue when coupled with a downturn in television and sponsorship money created something of an imperfect storm and one that may only be navigated when stadium doors are reopened.
A point that was reinforced by the comments from their CEO, Hans-Joachim Watzke:
“We will only see the figures return to the black when we have no restrictions on the crowd. But we have to be patient. It is hard to imagine football without fans. We have to keep going. We will keep going until we get through it.”
Admittedly they are one of, if not the best placed clubs in Germany to withstand such a heavy financial storm and although they will have enough to absorb such a loss, the same tale might not be read across the Bundesliga.
If one of the giants of the German game has haemorrhaged money in such a short space of time, what about the other 17 clubs in the division and this could be the catalyst for a period of collective losses.
There has already been the need to request both state and federal loans in recent times and although the Bundesliga enjoyed a huge boost in terms of global focus and viewing figures at the tail end of last season that does not necessarily convert itself to an injection of cash.
Should things worsen for Borussia Dortmund, they can grudgingly sell a superstar to balance the books. However, clubs at the lower end of the table will not have the luxury and although their bad news is yet to be unannounced, their own financial woe could be just around the corner.