FC Schalke 04 reduce liabilities by €33 million

“We are on the right path,” was how Christina Rühl-Hamers, board member responsible for finance, described the club’s financial reporting for 2021. Despite the ongoing Coronavirus pandemic and relegation to the 2. Bundesliga, the Royal Blues have been able to strengthen their financial ability to act and recorded significant improvement in key figures in comparison to last year.

VELTINS-Arena

The club have reported a total loss of €17.8 million. This corresponds with the figure predicted in the interim report, and is far lower than last year’s reported loss (-€52.6 million). At the same time, the club’s total liabilities have sunk from €217 million to €183.5 million in that same timeframe (-€33.5 million), while the financial liabilities have been reduced from €149 million to €140.6 million. The total revenue of €167.1 million is slightly less than last year’s reported figure (€174.7 million).

“The progression of these key figures shows that our decisions are paying off. In the second half of the 2020/21 season, we weren’t able to sell any tickets due to the pandemic restrictions in place. Despite a huge decrease in our revenue, we had to follow through on a historic squad rebuild following our relegation, while also maintaining the club’s financial ability to act. Despite all this, we managed to accomplish our aims,” said Rühl-Hamers.

In my opinion, this successful rebuild of our squad was the key to overcoming these financial challenges.

Christina Rühl-Hamers

The decision to begin preparing early for the challenging and complex realities of 2021 paid off for the Royal Blues. The implementation of extensive cost-cutting measures since the begin of the Coronavirus pandemic, the decision to put a stop to the planned ‘Berger Feld’ project and the implementation of new decision-making processes, in particular between the finance and sporting departments, helped the club to continue to be able to act and to mitigate the liabilities incurred over the preceding financial year. Rühl-Hamers emphasised that all pending decisions are scrutinised to determine their financial sensibility. “That was also the case during the transfer window in summer 2021, in which we were confronted with a very stagnant market. Nonetheless, Peter Knäbel and Rouven Schröder managed to reduce our budget from over €80 million to €20 million, while also putting together a new squad that was able to compete. In my opinion, this successful rebuild of our squad was the key to overcoming these financial challenges,” said Rühl-Hamers. She added that this rebuild is not finished yet, and will require several more transfer windows.

Successfully overcoming planning difficulties

Various other decisions also had a positive impact on the club’s financial figures. The sale of the club’s League of Legends European Championship spot and the addition of a mid-seven figure stopgap allowance all worked in the club’s favour. In contrast, the Coronavirus pandemic, relegation, the stagnant transfer market and the unexpected depreciation of fixed assets related to that, especially in terms of player values, as well as the postponement of the Berger Feld construction project, all had a negative impact on the club’s financial figures.

“For two years now, we have been working mainly with liquid funds. As a result, certain key figures such as our capital haven’t yet, or have been slow, to see positive growth,” explained Rühl-Hamers. However, this was essential in order to navigate the uncertainties of the Coronavirus pandemic. Constant changes in total capacity limits at the VELTINS-Arena also made planning more difficult, while the club were able to compensate with a cautious planning approach and cost-reduction programs.

If I look at how we have mastered the challenges we have faced since our relegation, fills me with optimism when looking towards the future.

Christina Rühl-Hamers

With an eye on the current financial year, Rühl-Hamers is able to pick out certain key areas in order to ensure a successful end to the club’s current plan. “In the short-term, the focus is on the 2022 bond being successfully issued, which should happen soon. Our finance department is also in close contact with the sporting department, in order to get an early start on budget and squad planning for the 2022/23 season, regardless of which league we are in. The termination of our partnership with GAZPROM will have no impact on that,” she said. Due to the new partnership with VIVAWEST, as well as other upcoming sponsorship announcements, the board are confident that the club will be able to successfully fill this financial gap.

In the intermediate term, the goal is to continue to strengthen the club’s financial ability to act. “We need to be able to make plans with certainty, in order to allow for long-term squad planning, spanning multiple seasons. This increases the likelihood of our sporting success, which is the key to our financial ability,” said Rühl-Hamers. She added that she sees the Royal Blues as being on a long, but promising path: “If I look at how we have mastered the challenges we have faced since our relegation, including the recent change in our main sponsor mid-way through the season, fills me with optimism when looking towards the future. Schalke, together with their 160,000 members and millions of fans, have an incredible power and we are working to bring this back, both on and off the pitch.”

Previous financial reports and statements can be found on the homepage.

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