Schalke 'in worse financial shape' than Dortmund

22nd February 2005, Comments 0 comments

22 February 2005, HAMBURG - Germany's Schalke 04 may be in even bigger financial trouble than Bundesliga rivals Borussia Dortmund, with debts mounting to EUR 110 million by the end of last year, a report to appear on Wednesday says. The financial magazine Focus Money reports that Schalke estimates its operating losses for the 2004 business year will come to EUR 17 million. Total debts on 31 December stood at EUR 110 million on a turnover of EUR 94 million, the report said quoting preliminary data. Like Dor

22 February 2005

HAMBURG - Germany's Schalke 04 may be in even bigger financial trouble than Bundesliga rivals Borussia Dortmund, with debts mounting to EUR 110 million by the end of last year, a report to appear on Wednesday says.

The financial magazine Focus Money reports that Schalke estimates its operating losses for the 2004 business year will come to EUR 17 million.

Total debts on 31 December stood at EUR 110 million on a turnover of EUR 94 million, the report said quoting preliminary data.

Like Dortmund, Schalke from the neighbouring city of Gelsenkirchen are one of Germany's oldest clubs with a huge fan base. Both have invested heavily over the past few seasons in new players, making them overly dependent upon sporting success.

Borussia Dortmund, Germany's only publicly-listed football club, last week admitted it was on the brink of bankruptcy with record debts of EUR 67 million in fiscal 2004 and an operating loss of another EUR 27.2 million in the first half of this fiscal year.

Focus Money said Schalke's accounts for 2003 and 2004 had been inspected on its behalf by Professor Karlheinz Kueting of the Auditing Institute of Saarland University.

"I regard Schalke 04's financial situation to be even more catastrophic than Borussia Dortmund's," Kueting is quoted as saying.

He said Schalke's figures would be "even more disastrous" but for questionable accounting practice.

"Without these permanent paper bookings the club would have long gone to the wall", he said.

Kueting cited the sale of the crumbling old Parkstadion ground to the city of Gelsenkirchen in 2003 for the symbolic price of EUR one as an example of "book-keeping trickery".

Schalke booked the stadium sale as a EUR 15.6 million income, a figure based on two valuations for the ground, thus reducing debts on paper for that year from EUR 19 million to EUR 4.1 million.

"This paper profit is unthinkable from a company point of view," Kueting said.

In an interview with the magazine, Schalke vice-president Josef Schnusenberg defended the club's financial policies and said there was no cause for concern.

He predicted the club would break even this year, while lower interest rates meant the club was on course to pay off its debts for the new Arena AufSchalke stadium by 2017, four years ahead of schedule.

However, Schuseberg admitted everything depended on success on the pitch.

"Should we not take part in the UEFA Cup or Champions League for several years in a row and write losses we would be threatened by real balance and liquidity problems," he said.

DPA

Subject: German news

 

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