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FC Schalke 04 releases 2020 fiscal year report
The fiscal year was massively shaped by the Coronavirus pandemic and the measures implemented to contain it. FC Schalke 04 generated revenues of €174.7 million in the 2020 fiscal year (2019: €275.0 million). The season being put on hold and the subsequent decision to play matches behind closed doors meant the temporary loss of significant revenue sources for the Royal Blues, ones that could only be realized to a limited extent by the end of the fiscal year.
In the midst of the crisis, it was important to act quickly. The Royal Blues were able to mitigate the pandemic’s impact on revenues by implementing extensive cost-cutting measures. The consolidated net loss for the yearwas €52.6 million (2019: €26.1 million), and is thus in line with what was forecast for the fiscal year in the interim report released by the club in September 2020.
Christina Rühl-Hamers, Board Member for Finance, Personnel and Legal Matters, said: “The Coronavirus pandemic hit us with full force and caused massive declines in key revenue areas. Thanks to the immediate implementation of cost-cutting measures, we were able to mitigate the overall effect. Our goal is to position FC Schalke 04 based on commercial economic measures that make sense in the mid- to long-term so that we are economically stable and can act with confidence, even in periods of unforeseen crisis.”
Our goal is to position FC Schalke 04 based on commercial economic measures that make sense in the mid- to long-term so that we are economically stable and can act with confidence, even in periods of unforeseen crisis.
The significant decline in revenues compared to the 2019 fiscal year are mainly due to match operations, with games having taken place without spectators in attendance since the start of the pandemic (2020: €9.2 million; 2019: €35.6 million), as well as lower revenues from media marketing rights (2020: €80.6 million; 2019: €108.8 million). The main reasons for this are the lack of UEFA TV marketing revenues, as FC Schalke 04 did not compete in any international competitions in the last fiscal year, coupled with a lower position in the Bundesliga’s media income distribution table. Sponsorship revenues also fell sharply to €49.7 million (2019: €73.3 million) as a result of advertising services not being provided due to matches being played behind closed doors, as well as missing out on international competitions. Catering revenues also recorded another drastic decline due to matches being played behind closed doors since the start of the pandemic (2020: €2.7 million; 2019: €15.1 million).
FC Schalke 04’s debt increased by €19.0 million to €217.0 million in the 2020 fiscal year. The main reason for the increase compared to the previous year is the taking on of a loan during the Coronavirus pandemic in order to strengthen the club’s financial situation. The net debt increased from €120.4 million to €148.1 million, due to the aforementioned loan and the investment into the Berger Feld rebuild.
“Unfortunately, the Coronavirus pandemic has also had an impact on our debts. Had it not been for the pandemic, we would have been able to reduce our debts to well below €200 million,” said Rühl-Hamers.
S04 makes critical decisions
FC Schalke 04 have also made two key decisions. The Royal Blues will issue a new bond in summer 2021 to refinance the expiring bond from 2016/2021 to a sum of €15.893 million. No other new bonds will be issued. Holders of the 2016/2021 bond will receive an offer to voluntarily exchange their bond, while all members and fans of S04 will also once again have an opportunity to subscribe to the bond via the club’s homepage. The new bond will be the fourth corporate bond issued by FC Schalke 04. The initial bond from 2012 was successfully paid back in 2016, with only the 2016/2021 bond and the 2016/2023 bond still outstanding. The Royal Blues will provide further information on the terms and conditions of the bond in the coming weeks.
At the same time, FC Schalke 04 have also announced a halt to construction on the Berger Feld II project. So far, a total of seven new training pitches, a professional performance centre, three parking garages and the Parkstadion have all been completed as part of a reconstruction of the club’s grounds. Additional projects, such as the ‘Tor auf Schalke’ (Schalke Gate), the building housing the professional and youth training centre and the administrative offices, will no longer be completed.
“This is a decision we’ve made based on economic common sense. The Coronavirus pandemic and the sporting situation have fundamentally changed our general set-up over the last 12 months. Our entire focus is now solely on the core of our business,” said Rühl-Hamers.
For the Knappenschmiede in particular, the already completed parts of the reconstruction of the club grounds have been of enormous importance. Through the successful construction of the new training pitches and the commissioning of the Parkstadion in 2020, FC Schalke 04’s academy players are now able to train on club grounds, while also playing their matches within sight of the VELTINS-Arena. The development of academy players for the club’s first-team squad will continue to be of enormous importance for the Royal Blues in the coming years.
The consolidated financial statements for the period of 1st January 2020 to 31st December 2020, which were prepared and audited in accordance with the German Commercial Code (HGB), were presented to the DFL Deutsche Fußball Liga GmbH in Frankfurt punctually on 15th March 2021. The consolidated financial statements are also now available on the club’s homepage at schalke04.de/ir-anleihen, as is the Annual Report for 2020.