Local politicians in Gelsenkirchen have decided on the future of Schalke 04. An impending end has been averted (for the time being).
The financial collapse of the highly indebted second-division soccer club Schalke 04 has been averted for the time being: The city of Gelsenkirchen has decided not to withdraw its investments in the arena and the club.
The main committee approved an urgent application to this effect on Thursday evening. Time was short because the traditional club has to submit the documents for licensing by Friday. CFO Christina Rühl-Hamers will present the 2023 annual financial statements on Monday.
According to WAZ, the city and its subsidiary Stadtwerke have invested around 35 million euros in the club and its stadium. Stadtwerke has a €15 million stake in the Veltins Arena via the stadium company and has granted the club and the stadium company loans amounting to €11 million. The city is a silent partner in the stadium company with ten million euros.
Stadtwerke had an option to sell, which the local politicians postponed to June 30, 2029 at the non-public meeting. It was also decided that the city would not terminate its participation at the end of the year.
The main committee thus followed a recommendation by the city administration, which now classifies the investment as “considerably risky”. The second relegation within two years had “significantly changed the general conditions in a negative way, so that the risk has once again increased considerably”. Schalke was €165 million in debt in mid-2023.
However, the administration had also pointed out that in the event of insolvency, “all or part of the capital invested would be lost”. In addition, the city would have to assume the “ongoing expenses” for the stadium. However, this would only avert the threat of bankruptcy if Schalke remained in the second division.
In the event of further relegation, according to the city administration, “the financial framework conditions clearly speak against the granting of a license to participate in the 3rd league and thus for an almost inevitable insolvency procedure.”