Absence of yellow wall takes its toll on Borussia Dortmund

ONE OF the most dynamic aspects of German domestic football is the sight of Borussia Dortmund’s so-called “yellow wall”, the vast bank of fans that makes the club’s ground a unique and somewhat intimidating place to visit. In 2020-21 season, with the majority of games played behind closed doors, the absence of Dortmund’s fans inside the Signal Iduna Park compromised their financial statements as well as their famed matchday atmosphere. 

After years of making profits, BVB generated a pre-tax loss for the second consecutive season. In 2020-21, this amounted to € 73.2 million, more than € 26 million higher than 2020’s deficit. 

The economic effect of no fans in the ground meant BVB’s matchday income fell by 98% to just over half a million. Overall, the club’s revenues were down by 9% to € 344.5 million, boosted by a 10% rise in broadcasting to € 186.7 million. Commercial earnings were also lower, falling to € 157.4 million from € 177.1 million.

BVB’s wage bill went up marginally to € 215.7 million but given the reduced circumstances, this represented 63% of income, compared to 57% a year earlier. BVB have a relatively low level of debt compared to many of their European peer group, their € 19.3 million slightly lower than 2019-20’s €21.1 million. BVB moved quickly to repair some of the damage caused by the pandemic, agreeing to raise more capital via an € 86.5 million share issue.

Dortmund have been one of Europe’s most proficient player traders over the years but in 2020-21, profits from player sales were just € 15.4 million versus € 40.2 million in the previous season. There were no massive sales in 2020-21, although Jadon Sancho departed for Manchester United in the close season of 2021 for € 85 million, a transfer fee that will benefit the 2021-22 accounts. 

Big deals that preceded Sancho’s return to England included Abdou Diallo to Paris Saint-Germain (€ 32 million), Christian Pulisic to Chelsea (€ 64 million), Ousmane Dembélé to Barcelona (€ 105 million) and Pierre-Emerick Aubameyang to Arsenal (€ 64 million). 

Dortmund invested in Birmingham City’s Jude Bellingham, paying € 25 million and he became an England international in his first season in Germany. Bellingham and the sought-after Norwegian, Erling Haaland will undoubtedly be added to the list of major transactions in the near future. Dortmund have one of the youngest squads in the Bundesliga and one of the most diverse, with more than a dozen nationalities and 55% non-Germans.

Although Dortmund are the second biggest club after Bayern Munich in Germany, they are still way behind the current Bundesliga champions. Bayern earned around a billion euros more than BVB’s revenues between 2018 and 2020, hence the importance of continued Champions League participation.

In 2019-20, they reached the last eight of the Champions League, losing to Manchester City, and won the DFB Pokal, crushing Leipzig by 4-1. They also finished third in the league. They have started the 2021-22 season well, winning all their home games and both of their UEFA Champions League fixtures. The crowds have returned but their first three Bundesliga games were limited to 25,000 before rising to more than 40,000 in October. It’s not quite the yellow wall, but it’s heading in the right direction. 

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Photo: Marco Verch CC BY 2.0

UEFA Champions League: And then there were eight

THE NAMES in the quarter-finals of the UEFA Champions League may be familiar, but nobody can accuse the competition of lacking some variety. This season’s last eight showed a five team change on 2019-20’s last eight which continues the trend of a 50% churn on the previous campaign. Yes, they are all part of the elite, but at least there is a reasonable chance of a different name being etched on the trophy in Istanbul.

There are six past European champions among the eight clubs, only Manchester City and Paris Saint-Germain, two of the new money representatives, have yet to lift the prize they crave. But both are edging closer to success, Manchester City are back on song and gunning for a quadruple and PSG lost in the final in 2020. Both may still be kicking themselves for not doing better last time as the competition looked open and unpredictable. Bayern Munich, who beat PSG 1-0, look like favourites this time and the quarter-final pairs those two teams from the Lisbon final.

Bayern cannot repeat their treble of last season as they were surprisingly beaten by Holstein Kiel in the DFB Pokal, but they are on top in the Bundesliga and four points clear of RB Leipzig. They have also won the FIFA Club World Cup. Bayern have a mature team and their leading scorer, Robert Lewandowski, is having another exceptional season, scoring 42 goals in 36 games. PSG, meanwhile, are back on top of Ligue 1 after their 4-2 win at Lyon. They face Lille this weekend, who have been setting the pace in France, but now they are level on points with PSG and worse off on goal difference. The game at Parc des Princes is going to be very decisive in the race for the Ligue 1 title. PSG also recently beat Lille in the Coupe de France recently.

PSG have been playing without Neymar, but Kylian Mbappé has netted 30-plus goals. PSG’s financial clout has resulted in a squad that has one of the highest percentage of foreigners (74.2%) and a very low level of club-trained players (8%). It’s a similar story at Manchester City, who have 77.6% expatriates in their squad and just 5.2% of home reared players.

City have been in exhilarating form since making a shaky start to 2020-21. They have won 16 of their last 19 Premier League games and have already booked places in the Football League Cup final and FA Cup semi-finals. People are talking of multiple trophy wins once more. They have also benefitted from the emergence of England’s Phil Foden, who is realising his potential as one of City’s most valuable players. 

City will face a Borussia Dortmund team who will include one of the hottest properties in world football in Erling Haaland, who has scored 33 goals including 10 in the Champions League. It is looking increasingly likely that Dortmund will have to sell Haaland soon as the clubs are queuing-up to buy him. BVB also have England’s Jadon Sancho, another current transfer target, and the slightly over-hyped Jude Bellingham, so there’s plenty of fresh legs in their line-up.

Real Madrid and Liverpool meet in a game that doesn’t look quite as glamorous as it would have done a year or two ago. Real still rely too much on ageing stars like Sergio Ramos, Luka Modric, Karim Benzema and Toni Kroos. Although they are nowhere near as dangerous as they were when a certain number 7 played for them, they may still have enough to beat a Liverpool side who have really misplaced their mojo in the past few months. 

Jürgen Klopp’s team have lost eight of their last 13 league games and scored just 12 goals in the process. Considering they had lost just once in their first 16 Premier fixtures, their slump is strange and largely unexplainable, although fatigue and fitness have played their part. 

As well as a lack of goals, the form of players like Trent Alexander-Arnold has suffered and he’s now considered only a fringe possibility for England’s Euro squad.

Chelsea sacked Frank Lampard in January and brought in Thomas Tuchel, who had been let go by PSG. Since then, Chelsea have tightened their defence and kept eight clean sheets in 10 games. They may still be waiting for their plethora of summer signings to show their full worth – Timo Werner in particular – but Chelsea are looking solid and capable, as their two-legged victory over Atlético Madrid demonstrated. 

Porto will have a big say in this tie, however, and they also impressed in the round of 16, disposing of Juventus on away goals. Porto won the double in Portugal last season, but they are 10 points behind leaders Sporting Lisbon this time. Porto may not have the depth of talent of the other seven quarter-finalists, but Chelsea would be wise to be wary.

The last eight have 62% of the world’s 50 most valuable players in their ranks, according to KPMG Football Benchmark’s valuations, and 52% of the Guardian’s top 100. This not only shows the power of these clubs, but also highlights how the crème de la crème gravitates towards a small number of elite institutions.

Some, such as PSG and Manchester City are desperately hungry for success it aches, but it shows how attritional the Champions League is and confirms that all the money in the world cannot guarantee silverware. The margin between the capabilities of the top superstars and merely very good players is not as significant as the cash differential of their valuations. 

Since 2003-04 when Roman Abramovich rolled into London town, the winners of the Champions League have largely been old money names from the European Cup’s past: Liverpool, Barcelona, AC Milan, Manchester United, Inter Milan and Bayern Munich. The only other winners have been Porto (also winners in 1987) and Chelsea, the only “new money” winners. These teams are in combat with opponents of a similar calibre, which means the likelihood of disappointment is always going to be very high. 

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Photo: Flicker – “Pete” – Public domain CCO-1-0

Germany’s Bundesliga braces itself after bull run comes to an end

GERMANY’s Bundesliga is the envy of the world in many ways: affordable ticket prices, high levels of stakeholder engagement, big crowds and successful teams. Furthermore, the Bundesliga and Bundesliga 2 contribute around € 1.4 billion in taxes and duties to the German economy and employ 53,000 people. 

But like all major leagues, the Bundesliga felt the pinch in 2019-20 from the pandemic and they are facing the future aware that the financial consequences of covid-19 has only just started. “This is just the beginning,” said DFL executive committee speaker, Christian Seifert. “No one was prepared for the extent to which the crisis would affect all areas of life, and football is no exception…we know that the pandemic will continue to have a significant impact on society as a whole in 2021.”

In 2019-20, Bundesliga revenues declined by 5.4% to € 3.8 billion and the combined total of Bundesliga and Bundesliga 2 was down by 5.7% to € 4.5 billion, the first time in 15 years that income had dropped. There were, of course, good reasons for that, but the likelihood is that 2020-21 will be even worse for all clubs given they may spend the entire campaign playing behind closed doors.

Of the 18 top flight clubs, 13 generated total revenues north of € 100 million, but only eight achieved a positive result, compared to 14 in 2018-19 and 13 in 2017-18. Bundesliga 2 had seven clubs in positive territory, half as many as 2018-19. 

The lack of spectators in the closing weeks of the season had a negative effect on the league’s finances. Matchday income in the Bundesliga fell by 21% to € 363.5 million and contributed 9.6% to the overall pot. In 2017-18 and 2018-19, matchday contributed 14% and 13% respectively with a recent annual average of € 536 million.

Media income managed to remain strong, partly attributable to successful negotiations by the league, and rose slightly to € 1.5 billion, contributing 39.2% to overall revenues. Advertising also increased marginally to € 889 million.  

The figures relating to Bundesliga 2 underline the huge gap between the two divisions. The Bundesliga earns around five times more than its poorer relation. However, among Europe’s second level competitions, Bundesliga 2 can attract an average gate of close to 20,000 in a normal season. Only England’s Championship has better attendances among second divisions.

For the first time in seven years, transfer activity declined in the Bundesliga, although buying and selling players still accounted for almost € 600 million of income. According to Transfermarkt, in 2019-20 Bundesliga clubs spent € 848 million, with the biggest spenders Borussia Dortmund (€ 134 million), Bayern Munich (€ 126 million) and Hertha Berlin (€ 100 million). The latter two clubs had the highest net outlay, both nursing a negative balance of more than € 75 million.

Despite lower revenues, player wages rose slightly in the Bundesliga, although administrative staff experienced a cut in salary. Given the downturn, it was no surprise that the overall wage-to-income ratio jumped to 44.8% which compared to many European leagues is still relatively low even though it was 2.5 percentage points higher than 2018-19.

The total assets of the Bundesliga for 2019-20 were € 3.95 billion (2019 € 3.8bn), with player values € 1.47 billion (€ 1.2 bn). The league’s equity ratio was 43%, lower than 2018-19 but the second highest in Bundesliga history. 

German clubs continued to fare well in European competition. Bayern Munich won the UEFA Champions League in 2019-20 and only Bayer Leverkusen failed to qualify for the knockout phase of the competition, moving over to the Europa where they reached the last eight. RB Leipzig fell at the Champions League semi-final stage, losing to Paris Saint-Germain. Bayern Munich and Borussia Dortmund are still involved in the Champions League in 2020-21, but all the German clubs have been eliminated from the Europa League. 

German football remains in good shape but there will be challenges in the near future. Seifert concluded in the league’s economic review: “Over the past 20 years, German professional football has established economic foundations on which the two leagues are able to build their future. At the same time, however, it is clear that the massive ramifications of the pandemic will require all of the clubs to continue to act with absolute financial discipline and considerable foresight.” 

Although Seifert’s caution is understandable, few would doubt that Germany’s football organisation is better equipped than most to withstand shocks to the system.

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Photo: PA