After the subscription for a capital market bond of the relegation-threatened Bundesliga club Werder Bremen began this week, the rather rare asset class is growing immediately.

Martin Hock

Editor in business.

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    However, the issuer is an old acquaintance.

    The Bundesliga club Schalke 04, who have been relegated for a long time, is planning a new corporate bond that will serve to repay the bond due on July 7th.

    Therefore, the new bond will also have a very crooked maximum volume of 15.893 million euros.

    In 2016, Schalke 04 took in around 50 million euros with two bonds.

    Of this, 34 million will be due in two years.

    Schalke pays 4.25 and 5 percent annual interest for these bonds.

    In July 2016, however, the club had just finished the Bundesliga season in fifth and advanced to the second round of the Europa League.

    Interest will probably be higher

    A prospectus for the new bond is expected to be published in the coming week, which will then contain further details.

    In view of the silent descent and an interest rate range of 6 to 7.5 percent for the Werder bond, it can be assumed that Schalke will not be able to finance itself at 4.25 percent this time.

    In view of the poor performance on the pitch and a rather chaotic leadership, the situation of the club does not currently have the greatest advertising effectiveness.

    The planned exchange offer for old investors, for which a bonus is promised, could help.

    Even if it is explicitly not a so-called, unlisted "fan bond", the association seems to be banking on just this.

    After the exchange offer ends, club members, fans and everyone else would have the opportunity to subscribe to the new bond via the club's website.

    The planned bond is aimed primarily at private investors with an interest and experience in the capital market, it says there.

    It is also only possible to subscribe to the security via a securities account.

    Financial improvements perdü

    Schalke is financially badly hit.

    In 2020 alone, there was a loss of around 53 million euros.

    Against the background of the corona pandemic, sales fell by around 100 million euros to around 175 million euros compared to 2019.

    The equity gap reached minus 28 percent.

    This is not a record minus compared to the past ten years, but all improvements made in the meantime are gone.

    In the 2018 calendar year, Schalke even reported equity of zero.

    At that time they were runner-up and made it to the semi-finals of the DFB Cup.

    This was followed by two years as a "gray mouse", which already cost the association 80 million euros in sales in 2019 compared to the previous year.

    According to the announcement on Tuesday, the club management is now facing major challenges.

    But the prerequisites for mastering these are given.

    The association has "numerous success factors with enormous value and great potential".

    For example, the so-called Knappenschmiede is "proven to be the most successful youth football team in Germany" and the loan for the Veltins Arena has been paid off since 2019.

    The sponsorship revenues decreased due to the descent, but the base was stable.

    However, there is also a question mark behind the transfer proceeds because not too many players were able to stand out positively in the current season.

    And goalkeeper Ralf Fährmann is said to stay.

    The development of the revenues from media exploitation rights also remains to be seen.