What HAPPENED to Schalke 04?
For decades, Schalke 04 were a force to be reckoned with in German as well as European football. Since 2000 they placed in the top three in Bundesliga on eight occasions and played in the Champions League nine seasons, making it all the way to the semi finals in 2011. But things have gone terribly wrong since.
Today, Schalke is involved in a relegation battle. From the 2. Bundesliga, the second tier of German football. They’re having a horrid season so far. And the 2020s’ has been a horrid decade for them so far. What’s gone wrong at the former top club?
| # | Team | Goals Scored | Goals Conceded | Points |
|---|---|---|---|---|
| 12 | Wehen Wiesbaden | 24 | 26 | 26 |
| 13 | 1. FC Magdeburg | 32 | 30 | 24 |
| 14 | Schalke 04 | 33 | 41 | 23 |
| 15 | 1. FCK | 33 | 41 | 21 |
| 16 | Hansa | 20 | 34 | 20 |
| 17 | Eintracht Braunschweig | 19 | 33 | 20 |
| 18 | Vfl Osnabruck | 18 | 42 | 11 |
What Happened?
Clemens Tönnies
For decades, Clemens Tönnies, billionaire heir of Tönnies, a major beef producer in Germany was very actively involved in the club. He was on the board from 1994 and acted as chairman from 2001. In addition to his work on the board, he contributed significantly financially to the club. Although necessary, the financial contributions were questioned by fans who thought Tönnies benefited from the club's financial position.
In 2019, Tönnies was caught making some very discriminatory, racist comments. He immediately announced that he was taking a three month time out but Schalke fans wouldn’t have it. They wanted him out and they made it very clear by locking arms and forming a human chain around the stadium. He resigned shortly after.
After all this, the club didn’t want to be dependent on Tönnies anymore and, despite him offering, refused to take up any more loans with him. Additionally, through his 26 years of involvement, Tönnies had brought stability to the way the club was run, which was now also gone.
Covid and the 2020/2021 season
Having the third highest average attendance in Germany proved to be a negative when the virus came, in 2020. Match day revenue was usually a big part of their total revenue. Combined with the fact that they missed out on European football and placed lower in the league, the club's revenue dropped more than €100 million in a single year.
Without supporters in the stands, Schalkes performance on the pitch dropped. You could fill a book about the 2020/2021 season. Schalke recorded one of the worst starts to a Bundesliga campaign ever. It took the team 15 games to win their first game of the season.
And they wouldn’t stop breaking terrible records. Schalke became the only team in Bundesliga history to have five different managers in charge in a single season.
Schalke ended the season having only recorded three wins and a total points tally of 16. They’d conceded 86 goals, 26 more than anyone else. In April, Schalke were mathematically relegated.
| # | Team | W | D | L | Goals Scored | Goals Conceded | Points |
|---|---|---|---|---|---|---|---|
| 14 | Hertha BSC | 8 | 11 | 15 | 41 | 52 | 35 |
| 15 | Arminia Bielefeld | 9 | 8 | 17 | 26 | 52 | 35 |
| 16 | 1. FC Köln | 8 | 9 | 17 | 34 | 60 | 33 |
| 17 | Werder Bremen (R) | 7 | 10 | 17 | 36 | 57 | 31 |
| 18 | Schalke 04 | 3 | 7 | 24 | 25 | 86 | 16 |
Russia's invasion of Ukraine
As if things weren’t bad enough, Russia invaded Ukraine. A tragedy in itself, it was also devastating for Schalke. The team's main sponsor for more than ten years was Russian gas and oil giant Gazprom. After Russia's invasion of Ukraine, the entire league took a stance against the war. Schalke, despite the rough few years they’d been through, cut ties with Gazprom.
So, after cutting ties with their benefactor, getting hit hard by Corona, they were now breaking up with their long-time main sponsor. While the Bundesliga aided financially for the loss of revenue in that season, not all was recouped and getting a new sponsor of that size is a multi year project.
Poor management
While external factors affected the club massively, the club's management sure did its part to speed up the process. They were unable to profit off the young players that came through the club. Max Mayer (then valued at €18 million by Transfermarkt), Leon Goretzka and Joel Matip were all allowed to leave the club on a free.
But maybe that was for the best. There’s no telling how the club would have squandered the money of any had come in. Nearly every player that was brought in failed. Practically every expensive transfer made failed, Breel Embolo, Nabil Bentaleb and Sebastian Rudy.
But it gets worse
So that’s how we ended up here, just a few goals off the relegation spots in the German second tier. Here’s the problem though. Relegation in this case, doesn’t mean relegation, it means ceasing to exist.
As one of the biggest clubs in Germany by most measurements: attendance, members, historical significance, etc, Schalke has a LOT of costs. But as a second division team, sponsorship, TV-money, and, last but not least, those big fat European football checks that used to be a regular occurrence the revenue just isn’t what it used to be.
In combination with the terrible business we discussed before - Schalke has been haemorrhaging money. They currently find themselves more than €160 million in debt. If the club was to get relegated to the third tier, because of league rules, they wouldn’t get a professional licence. The club would cease to exist.
What happens next
This is an awful situation. Even Borussia Dortmund fans wouldn’t want this to happen to Schalke. Well most of them at least. However, they can still stay up. It won’t solve their financial problems but the club could go on operating. Maybe the situation they find themselves in is a wakeup call. Sometimes you gotta hit rock bottom to get back up.
If the worst was to happen, if the club was to go under, there are clubs that have gone through the same thing and come back stronger. For example, Rangers had a similar standing in Scotland – one of the most prestigious clubs in the country. After the club's liquidation in 2012 and the club officially ceased to exist, a phoenix club arose and started over in the fourth tier of Scottish football. But through the strong support of their fans, the club made its way back to the top and won the league in 2021.
The big membership (the second most members of any club in Germany) and the high attendance (third highest in Germany, even in the 2. Bundesliga) means they have a solid foundation. A liquidation would be a tragedy but also a chance at a clean slate.
Football Stories Like This, Twice a Week
Join thousands of subscribers getting The Touchline - a free, twice weekly newsletter with analysis, stories and interviews from the world of football.
