Covid-19 has seen German Bundesliga football club Borussia Dortmund post a net loss of €43.9m ($52.3m) for the 2019-20 financial year, with chief executive Hans-Joachim Watzke warning that fans will need to return to games before its fortunes are revived.

The figures have acted to reverse a run of strong financial results for Dortmund, with the full impact of the pandemic laid bare. In the past financial year, spanning July 1, 2019 to June 30, 2020, Dortmund generated total gross group earnings of €486.9m, a slight decrease on last year’s €489.5m.

Group revenues amounted to €370.2m, versus the previous year’s €370.3m. Matchday revenue dropped from €44.7m to €32.5m, but this was offset by a rise in sponsorship revenue (€98m v €96.8m) and broadcast rights revenue (€169.8m v €167.3m).

“The past decade was excellent throughout, both in sporting and financial terms,” Watzke said at a press conference. “Financially, we have always been comfortably in the black. Then came Corona.”

From mid-March, Dortmund outlined how its revenue and earnings situation was “significantly influenced” by the severe restrictions on public life as a result of Covid-19 and the accompanying impact on the economy. As a result, the company’s 6.3 per cent consolidated sales growth recorded in the first nine months was completely eradicated due to sales declines of more than 25 per cent in the last three months of the financial year, when compared to the same quarter of the previous year, accompanied by a high decline in earnings.

“Football has suffered significantly more from Covid than DAX companies, which suffered average downturns of 13 per cent in the fourth quarter,” Dortmund chief financial officer, Thomas Treß, said.

Dortmund ended its 2019-20 season with five home games played behind closed doors. The €43.9m annual loss compares to a profit of €17.4m for 2018-19. Looking forward to the current financial year, Watzke said: “We will only see the figures return to the black when we have no restrictions on the crowd. But we have to be patient. It is hard to imagine football without fans. We have to keep going. We will keep going until we get through it.”

Dortmund’s 2020-21 accounts will be bolstered with two key sponsorship agreements coming into force. In November, Puma extended its kit deal with the club, while it was announced in February that Dortmund will split its shirt sponsorship rights between the incumbent chemicals brand Evonik and telecommunications company 1&1 from 2020-21.

Watzke admitted that while the current situation isn’t ideal, the club is strongly positioned to ride out the pandemic. He added: “(Dortmund has) generated such a high level of liquidity on the capital market that we can hold out against the pandemic situation for a very long time. The liquidity that we have now obtained is available well beyond the season.”

In other news, Dortmund has agreed a deal with German startup Liquiditeam to help the club explore the realm of blockchain technology. Brokered by the Sportfive agency, Liquiditeam has gained a comprehensive rights portfolio for the activation of a new brand which aims to launch in December.

Simon Mayr, who is responsible for the project as head of digital and innovation at Borussia Dortmund, said: “We are convinced that blockchain-based approaches have the medium-term potential to fundamentally change structures, including in sports.

“We therefore want to get to know this technology better at an early stage. The key terms for us in the new project are community and participation. We want to create an instrument with which BVB fans can help shape and contribute their own ideas – transparently and safely.”

(Excerpt) Read more Here | 2020-08-18 03:21:00
Image credit: source

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