Every few days a new episode of the royal blue drama is told. The reflexive tendency to hysteria has become a kind of permanent condition at FC Schalke 04. If the gap to the relegation places narrows, or if the young players brought in by the new sports director don’t immediately become heroes. When defender X steps over the ball at the wrong moment, when the coach changes again, and when it comes to money anyway.
The beautiful alliteration “Schalker Debt Club” is older than the Bundesliga club RasenBallsport Leipzig. It’s logical that the club’s management’s latest plan is also causing hysteria. Like FC St. Pauli, Schalke want to outsource parts of their stadium to a cooperative in order to raise money. The “association goes on a begging spree,” she claims Bildand the WAZ asks: “Is the financial situation now so precarious that Schalke is thinking about selling the arena?”
Such a cooperative is particularly interesting for registered clubs such as Schalke and St. Pauli, whose members reject the spin-off of the professional department. At least that’s what Oke Göttlich, the president of FC St. Pauli, says. The project in Hamburg is already much more advanced than in Gelsenkirchen, and the first cooperative shares are expected to be acquired this year. “All common models of raising money do not suit us, our goal is to offer an alternative,” says Göttlich. At FC St. Pauli, at the request of the members, it is not possible to market the stadium name, investors are not welcome, and a spin-off is taboo. “The wish of our members is an independent and flexible FC St. Pauli,” says the president.
But in reality, the idealists from Hamburg’s Millerntor Stadium are also competitors in the seemingly limitless commercial world of football. You need money because you need to invest in infrastructure. Because old debts burden budgets with interest and principal payments. Because investors are pumping millions into competitors’ outsourced professional departments. So the question is: “How can we raise a larger sum while at the same time meeting our demands for the common good?” And how can people benefit from it if it works?” says Göttlich.
Get involved, have a say, return on investment!
In Hamburg, those involved have been dealing with the advantages and disadvantages of a cooperative for almost ten years; the search for alternative paths in the world of rampant football capitalism is part of the club’s DNA. “Another football is possible,” is one of the club’s slogans, and now the unique alternative looks like this: around 30 million euros are expected to be raised through shares in the stadium cooperative, which will probably be sold for around 850 euros.
The remaining debt of 15 million euros from the stadium construction should be paid off and new investments in the infrastructure should be made possible. In return, the cooperative members can hope for a small return; they can get involved, have a say and take responsibility. So far, the project has been viewed with goodwill in the city’s society, also because trust in the club’s management has developed over the past few years and because everyone has seen how HSV has been struggling with its investor Klaus-Michael Kühne for years.
It’s completely different at Schalke, where controversial fundraising measures have a certain tradition. The loan from the financial broker Stephen Schechter made headlines in the noughties, a state guarantee raises the question of whether football, which is actually rich, should really use such a public funding instrument, and the scary deal with Gazprom only ended after 13 years with Russia’s attack on Ukraine. Maybe you have to understand that those around Schalke find it difficult to trust the club management now. Cooperatives actually don’t spread fear.
The concept has been around for 160 years and has proven to be suitable in very different economic sectors: in agriculture, in the banking and energy sectors, and in housing construction. Wherever it makes sense to strengthen the interests and influence of those directly involved, instead of putting power in the hands of external donors, who are usually also interested in privatizing profits.
Without any dubious instances
In football, a cooperative is a partner company that, with cleverly drafted statutes, can also be directly linked to the club’s values. Schalke says that a cooperative can be used to compensate for the weaknesses that such a registered club has compared to the outsourced professional departments of most other Bundesliga clubs.
It is almost puzzling why it took until 2024 for the system in which the biotopes of registered associations compete with investors, states and large corporations to recognize the cooperative as an alternative model. In a football world in which it is becoming increasingly difficult to resist the influence of dubious authorities bought with billions of dollars, FC St. Pauli’s cooperative model is attracting so much attention that even… New York Times reported in detail about the project. “We try to make a more right life possible in the wrong one. For me, that’s something the club clearly stands for,” said Miriam Wolframm from the board of FC St. Pauli in an interview with the taz in September, which is also backed by a cooperative.
In the Ruhr area, solidarity models are just as rooted as skepticism towards entrepreneurs
In football, governance rules at both Schalke and Millerntor are intended to ensure that the cooperative cannot make any decisions that contradict the guidelines of the parent club. For example, a group of BVB Ultras could be prevented from acquiring shares in the Schalke cooperative in order to then demand that the roof of the arena be painted black and yellow. The entry of morally dubious companies or states can also be prevented through veto rights. “It’s good for football when two clubs like St. Pauli and Schalke do it at the same time, we can take a new path and be a pioneer to some extent,” says Schalke’s CEO Matthias Tillmann on Deutschlandfunk.
The suspicion that Schalke are selling off their stadium in order to secure liquidity during ongoing operations is wrong, assures the Schalke club boss. Rather, the income should be used to reduce debts, which are a leaden burden on the club. There are currently financial liabilities of around 160 million euros on the balance sheets. As a result, 16 million euros in interest and repayment are due every year; this money must first be earned before even one euro is available for the resurgence project. This is a massive competitive disadvantage, especially in the second league, where some competitors finance their entire team with 16 million euros.
Shares? Show your membership card!
However, the shares in the Schalke stadium cooperative are said to be cheaper than in Hamburg, and there is also the restriction that, in addition to companies, only members of the registered club can join. When the professional department is spun off from the registered club and the subsequent sale of shares – a concept with which Dortmund, Stuttgart and FC Bayern have generated millions in income – “you have others in the club who have a say,” says Tillmann, in conjunction with the Everything in the cooperative should remain in Schalke’s hands.
If Schalke succeeds in meeting the legally complex challenge of this project, this step could at some point be considered a game changer. After all, solidarity models are traditionally just as rooted in the Ruhr area as is skepticism towards entrepreneurs who are primarily concerned with making money before thinking about the consequences for people. “What one person cannot do, many people can do together. This is a path that suits Schalke very well,” says Tillmann, who will promote the project and announce further details at the general meeting in mid-November.
However, it is also true that the resources generated by a cooperative through great effort and effort can never compensate for the inequality that arises through participation in international competitions. Even the rather small club SC Freiburg earned over 20 million euros during its two most recent Europa League participations.
Co-operative projects also involve communication and administrative costs as well as annual meetings – for the clubs this is more challenging than paying an investor who might get a place on the board in return. But especially in Germany, where the German Football League and the active fan scenes are fighting for the ideals behind the 50+1 rule, the Schalke and Hamburg projects could find many imitators. And in the best case scenario, the debates about cooperatives in football could also have an impact on other areas of society.
Göttlich would think it would be nice if football brought the topic back into the focus of public debate. As a contrasting complement to the privatization dynamics, social entrepreneurship and start-up culture. “Cooperatives have contributed a lot to Germany’s prosperity,” says Göttlich. “The concept of helping to shape things through this form of ownership, taking responsibility and benefiting as part of a community” is much better than its somewhat outdated reputation.
