Schalke 04 Faces Risk of Extinction

The Schalke 04, a traditional German club with a huge and passionate fanbase, the second club with the most supporters in Germany, is at risk of extinction. Below, we’ll recount a bit of the Königsblauen’s (Royal Blues) history and how they reached this point. To give you an idea of the current situation, they are just 3 points away from the relegation zone to the German third division. If that happens, it will be the downfall of a giant. Understand the case:

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The History of Schalke 04

The club originated in the city of Gelsenkirchen, in the neighborhood bearing its name, Schalke. Its establishment was initiated by a group of students in 1904 and was named Westfalia Schalke.

Since its inception, Westfalia had been striving year after year for admission to the German football association to participate in the most contested championships of the time. However, they never succeeded and initially played in marginal leagues, primarily in the region where the club was based. To try to join the association, they made and dissolved mergers with a gymnastics club called Schalker Turnverein 1877, which ultimately increased the club’s popularity.

In 1923, they won their first title and earned their first nickname ‘Die Knappen’ (the miners), as they were known for recruiting several players and fans from the coal mines of Gelsenkirchen.

In 1924, there was a definitive split between the clubs, and once and for all, FC Gelsenkirchen Schalke 04 was founded, a name alluding to the year of creation and also the city and neighborhood where it was based. From then on, the club presented itself to the football world with everything it had.

In 1929, they won their first title in the West German League, and their popularity increased exponentially. An example of this was the game against Fortuna Düsseldorf in 1931, which had more than 70 thousand spectators. The team was known for its physical football without the ball and, when in possession, for many short and quick passes.

Photo: Reproduction

Their years of greatest glory began in 1933 after Nazi Germany restructured German football. Schalke was placed in the first division among the 16 created by the Nazi regime, which aimed to unify German football, which at the time was almost 100% regionalized. This division was called Gauliga Westfalen.

In this league, the club established a historical dominance in the 11 seasons played until 1945. They lost only 6 games, remaining unbeaten in 6 seasons. In 189 games played, they achieved 162 victories, 21 draws, and 6 defeats, scoring 924 goals and conceding only 145.

The success of Schalke at the time was such that it was constantly used by the Nazi government as an example of the New Germany. Therefore, it became one of Hitler’s favorite teams and one of the most hated in the world because of this association with the dictator and his regime.

After the end of World War II and the defeat suffered by the Nazis, Schalke resumed regular matches in 1947 and gradually regained its place in German football, especially from the mid-1950s onwards.

In 1958, they became German champions again, which directly influenced the increase in supporters, especially since after the title, one of the most famous churches in Gelsenkirchen honored the club with its colors, making it one of the most popular clubs in Germany.

In 1963, the Bundesliga, the German Football League that is still played today, was implemented. Schalke’s start wasn’t the best, and they even fought to avoid relegation in the first seasons. However, in the 1970s, the club restructured itself, not winning the title but consistently appearing at the top of the table.

In the 1980s, the club struggled to achieve success on the field, experiencing two relegations to the second division during the decade, with the second one occurring in 1988. Die Knappen returned to the top flight in 1992 and remained there until 2021, always challenging at the top of the table and participating in European competitions. They even won the UEFA Cup in the 1996/97 season against the mighty Inter Milan.

With the European title, Schalke regained their form, and their fan base continued to grow. They consistently ranked at the top of the Bundesliga table, won German Cup titles, and reached far in various European competitions.

Such success and support made Schalke one of the teams with the most supporters in the world. Currently, they are the second in Germany and fourth worldwide, with approximately 170,000 members.

1996/97: Unsung Schalke shine | UEFA Europa League | UEFA.com
Photo: UEFA

The Onset of Crisis and the Risk of Extinction

Despite the good results on the field, immense and passionate fanbase, and receiving substantial sponsorship funds, the Königsblauen began to suffer from poor management, especially in terms of finances, starting from 2010. They were spending more than they were receiving, and worst of all, they couldn’t do anything to increase their revenue. In fact, they let almost all of their youth talents leave for free starting from 2016. Let’s take a look.

In 2016, Joel Matip, a 23-year-old considered one of the best defenders in the Bundesliga, was worth around 20 million euros, but Schalke let his contract expire, and when that happened, the young defender moved to Liverpool for free.

Kolasinac, another product of the youth academy with great potential, a left-back, also didn’t have his contract renewed and left for Arsenal for free. At the time, the left-back also had a market value of 20 million euros.

Another example is Leon Goretzka, who was emerging at Schalke as one of the best midfielders in German football. With an estimated market value of 40 million euros, he also left for free. This list doesn’t end here. Max Meyer, goalkeeper Nübel, seen as a possible Manuel Neuer replacement, among others, also left in this manner, resulting in approximately 150 million euros in lost revenue.

Moreover, fearing they wouldn’t perform on the field with the departure of their main prospects, Schalke made several signings without proper scrutiny or scouting, losing a lot of money in these transactions. For instance, Embolo was bought for 26.5 million euros and sold for 11 million, Bentaleb was signed for 19 million euros and left for free to Newcastle, and Rudy, bought for 16 million, also left for free, among others, totaling approximately 100 million euros in losses.

Despite such poor management, the club finished in 2nd place in the 2018/2019 Bundesliga season. However, the reckoning was imminent, and the COVID-19 pandemic exacerbated the situation rapidly.

The club stopped receiving its usual matchday revenue and other income streams, leading to a lack of funds to pay its players and staff and the onset of flirting with bankruptcy. In a desperate measure, they imposed a salary cap on their players, resulting in the departure of some and the consequent weakening of the team.

Furthermore, President Tönies, who had been in office for over 19 years, became embroiled in a major controversy when one of his meatpacking plants became the center of a COVID-19 outbreak, with over 1,500 employees being infected. This led to the quarantine of the region where the plant was located, as well as Tönies’ forced removal from the club.

Escândalos derrubam presidente do FC Schalke 04 – DW – 01/07/2020
Photo G. Kirchner

In the 2020/2021 season, amidst financial and managerial crises, Schalke struggled to perform and was relegated to the 2nd division of the Bundesliga. In the 2021/22 season, they managed to return as champions, but in 2022/2023, they were relegated again.

In the 2022/2023 season, another blow hit the club’s financial management. Due to the war between Russia and Ukraine, their sponsor Mastrer Gazprom, Russia’s largest energy company, could no longer continue sponsoring the club, exacerbating the financial situation of the Knappen even further.

In total, Schalke currently owes around 150 million euros and is in 14th place in the 2nd division of the Bundesliga.

According to the Bundesliga regulations, teams have a certain ceiling for the value of their debts, directly related to the division in which they compete. In the case of the Königsblauen, they exceed the ceiling for the 3rd division of the Bundesliga. Therefore, if Schalke does not recover and is relegated to the 3rd division, they will be dissolved and will have to start their journey again as an amateur club at the bottom of the German football pyramid.

Currently, Schalke is in 14th place with 23 points in 20 games played, just 3 points ahead of Eintracht Braunschweig and Keiserslautern. There are 14 games left in the season. If they finish in 17th place, they will be relegated directly to the third tier. If they finish 16th, they will participate in a playoff against the 3rd-placed team from the lower division to determine if they stay in the second tier.

It’s a very complicated situation for a good club with a massive and passionate fanbase. Is it just a phase?

 

 

Written by João Felipe Miller

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Tags: International Football

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