Schalke 04 up the swanny

FC Schalke 04 is heavily in debt. As a survival strategy, the players' salaries should be capped - and a state guarantee is probably needed. For this, the club accepts a competitive disadvantage.
 
197 million euros in debt, covered by a state guarantee of 40 million so they can secure loans.
 
State guarantee for Schalke

Who pays the bill?

FC Schalke 04 is heavily in debt. As a survival strategy, the players' salaries should be capped - and a state guarantee is probably needed. For this, the club accepts a competitive disadvantage.
By Marcus Bark
30.06.2020, 12.48 p.m.


On June 30, 2020, Peter Peters will have his last day at FC Schalke 04 . During his 27 years in the club, Peters often had to talk about money. On the one hand because it was his job as CFO in the end, but also because Schalke's relationship with money is a chronically problematic one.

Now that the consequences of the coronavirus pandemic are forcing even better-off rivals Borussia Dortmund to predict an annual loss of 45 million euros , it is particularly problematic. As the "Handelsblatt" and other media reported on Monday , the government of Prime Minister Armin Laschet probably granted Schalke's debt of 197 million euros with a state guarantee from North Rhine-Westphalia of almost 40 million euros. So a security to get new loans from banks. Laschet did not want to confirm at a press conference on Tuesday that a decision had already been made.
There were already country guarantees at Schalke: most recently when the Veltins Arena was built in 2001. The fact that another guarantee is needed to obtain credit shows how great the economic hardship in the club is at the moment.
Schalke has to save and also chooses an unknown path for the club. In the future, new employment contracts should provide for a maximum salary of EUR 2.5 million. So it first reported the "Süddeutsche Zeitung" . At the request of SPIEGEL, a spokeswoman for the club said that Schalke did not comment on the content of the contract, including on future contracts.
However, it can be heard from the association that an individual upper salary limit is actually planned. All available indicators make the sum of 2.5 million euros appear realistic.

The Schalke savings potential

Schalke spent almost 124 million euros on personnel in the 2019 financial year. At least 80 million of these should have been accounted for by professional footballers, including the coaching staff for basic salaries and bonuses. With around 30 players and coaches, this results in an average of 2.66 million euros in salary and bonuses. Players with the first contract in the senior sector will be significantly lower, national players such as Suat Serdar and Weston McKennie above.
The calculation shows that Schalke could save a lot of money in the future.
Suat Serdar and Weston McKennie could soon be too expensive for Schalke.

But it also shows that many players, even from the current squad, may be too expensive for a royal blue jersey. The association fends off all inquiries about the new strategy and refers to a media conference on Wednesday. Then there will also be talk about the resignation of the chairman of the supervisory board, Clemens Tönnies, and the analysis of the sporting decline, which has faded somewhat into the background in view of other topics :

  • the hardship application when reimbursing entry fees
  • the termination of bus drivers of the youth teams
  • especially the coronavirus outbreak in the meat factory of the former supervisory board chairman Tönnies
  • the fan protests against Tönnies, which ultimately led to the resignation, as well as the remaining board members Jochen Schneider (sports) and Alexander Jobst (marketing)


Schalke accepts the competitive disadvantage

Good news is therefore all the more welcome. The news that a staunch club voluntarily limits its salary spending sounds reasonable at first. Most recently, Bayern Munich CEO Karl-Heinz Rummenigge and *** President Fritz Keller brought an upper limit into play in order to bring the sometimes very over-worked branch to economic reason. The "Salary Cap" known from US sports , which was mostly meant, provides for a total cap.

"Living a mission statement - instead of slaughtering values": Protest against Clemens Tönnies

Taking Schalke as an example, the following could be said: In future, the club will only pay the professional department only 40 million euros per year plus more performance-based bonuses. Then the salary of a well-known player or outstanding talent could still be around five million euros. With the planned individual capping, however, Schalke obviously accepts a clear competitive disadvantage for everyone. This will make it even more difficult to enlist a striker who is likely to score at least ten goals a season.

In the absence of a CFO, Jochen Schneider will have to answer the questions on Wednesday that arise from a generally sensible message. She came at the right time for Schalke, even though the position of CFO is currently vacant. That also raises questions.
 
Incompetent board now where have we heard that before. I was at the Veltins Arena last year and it’s an incredible stadium that should be making a huge dent in their debts.
Obviously the virus is having a huge effect on that but they’ve been struggling before that as well.
They have a football pitch,ice rink and general flooring so they can host ice hocke etc one day and a music concert the next.retractable roof as well in case the weather is shite.
Pop up bars all around the stadium with not another pub in sight so on beer alone they should be coining it in.
 
What a cock up really, I can't help but think the 50 plus 1 rule hurts some German Clubs as people get involved/decisions made based on fan style gambles done out of passion rather than Business sense.


The 50+1 rule still allows clubs to be run by professional boards of directors. There is absolutely no reason why the professional board at Schalke couldn't have made better decisions. It's a failure of business management for sure, but one driven by failures in the boardroom.

Transfers don't seem to be excessive, although there was one year that they had a net transfer imalance of about £35million. Average around 60,000 fans per home game. Almost certainly going to be down to wages spent trying to remain title challengers and the cumulative effect or years of transfer imbalances.

I'd suggest that much like Murray at Ibrox, the Schalke fans were never given a proper picture of club finances. No fans would willingly see their club accumulate that amount of debt, no matter how ambitious they were.
 
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The 50+1 rule still allows clubs to be run by professional boards of directors. There is absolutely no reason why the professional board at Schalke couldn't have made better decisions. It's a failure of business management for sure, but one driven by failures in the boardroom.

Transfers don't seem to be excessive, although there was one year that they had a net transfer imalance of about £35million. Average around 60,000 fans per home game. Almost certainly going to be down to wages spent trying to remain title challengers and the cumulative effect or years of transfer imbalances.

I'd suggest that much like Murray at Ibrox, the Schalke fans were never given a proper picture of club finances. No fans would willingly see their club accumulate that amount of debt, no matter how ambitious they were.

Oh aye I know that but this is happening with a lot of Clubs over there and many have admitted the wrong people with the wrong ideas were voted for with hindsight.
 
Aye right, imagine state intervention in Scotland o_O
There was they watched as we got ripped apart by media mp's & the scottish football supporters, & didn't intervene & allowed us to be dumped into the abyss of the lower league's & watch millions of pounds slip out of football, & god knows how much money was lost to businesses & communities, but the fans got what the fans wanted , empty stadiums, NEVER FORGET OR FORGIVE BEARS .
 
Show them as much sympathy as they showed us in 2012!!!!! Long....slow, lingerrrrrrring death etc.

;)
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The club management has been appalling in recent years. The amount of quality players that have been allowed to walk away on free transfers has lost the club almost enough to cover the current debt level. And 22 managers in 18 years hasn't helped much either. Clemens Tonnies resigning from the head of the club yesterday was a start in the right direction but there is a long way to go yet.
 
Being a strong catholic club and their
connections to the Vatican via
Honourable Member Pope John Paul 2, I’m sure they won’t let them go under.
 
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