Schalke 04 still have to pay €16m in loans per year, the club’s annual report has revealed. However, the story runs much deeper than that and is not as bad as it has been in recent years. A period of stabilisation is still occurring at one of Germany’s most famous and well-supported clubs. Below are all the key takeaways from the club’s annual report.
Slight Profit, Debt Levels Reduced
Whilst Schalke 04 are not quite out of the woods just yet, there is some good news. The club has steered away from potentially of not obtaining a license last season and going bankrupt just over four years ago. In fact, the club has actually made a slight profit, whilst negative equity and debt levels are down.
CFO Christina Rühl-Hamers would have been pleased to announce these figures on Tuesday; however, she did not stray from the core message of the report.
“Stabilisation course continued,” the club is “still in the intensive care unit, but things are getting better and better.”
Sponsorships are Key, Poor TV Revenue
Schalke is occasionally benefiting slightly from sponsors coming into the club, but this is not a long-term strategy as they’re currently too dependent on such spontaneous fluctuations. Following summertime concerts at the club, most recently Robbie Williams, the club received good revenue.
However, one area which would improve the club’s situation drastically, is TV revenue. Due to the club’s poor positioning in the 2. Bundesliga over the last few seasons, they’re getting less and less revenue through TV rights deals.
With the start the club has made, this is expected to be better. However, there is one clear goal that would massively benefit S04 – Promotion.
Whilst Schalke fans won’t want to get expectations too high, the club’s management would need promotion in the short term to be able to be in a better financial situation, rather than just managing the shortcomings. Not to mention the amount the club would receive in TV money alone.
Outstanding Yearly Debts
Until promotion, however, Schalke still has to face the €16m in loan debts each year without the lucrative Bundesliga money. What’s more, the €50m bonds that have to be reissued will only place a further burden on the club’s balance sheet.
Bit by bit, Schalke is tackling its situation with care. However, still in a period of stabilisation, they will still have to tread carefully when it comes to budgeting. Should Schalke continue their current form deep into this season, the financial team headed by Christina Rühl-Hamers will be the first to celebrate.
GGFN | Jamie Allen
