One league title (2011); one double (2012); a run to the Champions League finals as underdogs (2013); stable, debt free financial structure with revenue well north of €300m per season; energetic attacking football; highest average attendance in Germany and Europe (80,521); one of the youngest squads boasting five reigning world champions in Mats Hummels, Roman Weidenfeller, Kevin Grosskreutz, Erik Durm, Matthias Ginter and coached by one of the most charismatic and tactically astute manager in the world.
Whilst in the past decade, the English Premier League has seen the emergence of billionaire owners affecting the mentality in English football with the excessive “financial doping” with a belief that success was only possible with vast amounts of money, Borussia Dortmund has been the antithesis of these sides. They have achieved their success with a net spend of zero, yes zero, these past three years. The rise of Dortmund is a story which inspires not only a belief that football’s future is not as bleak as many believe but of a model which can be replicated by many sides across the world. It is BVB’s remarkable rise under Jürgen Klopp that has attracted the dreamers. A dream based on youth development, attractive attacking football helmed by an exciting young coach with a well-defined footballing philosophy.
Dortmund’s rise to the top, however, hasn’t been pretty, it’s only recently that they have found stability, gained respect from Europe’s elite and balanced their books so well that their piggy bank cracks open a healthy profit. It wasn’t so long ago that Dortmund were synonymous with arrogance, money, and everything wrong in football.
Borussia Dortmund was founded in 1909 by seventeen football players from Dortmund who were unhappy with church-sponsored Trinity Youth, where they played football under the stern and unsympathetic eye of the local parish priest.
Their first league title came in 1956 and then 10 years later in 1966 they became the first German club to win a European title, winning the UEFA Cup Winners’ Cup against Bill Shankly’s Liverpool at Hampden Park. It was in the mid 90’s that Dortmund enjoyed their greatest success, winning the Bundesliga in ’95 and ’96 and the Champions League in 1997 when the Dortmund side, with European player of the year Matthias Sammer, Andreas Moller and Karl-Heinz Riedle overcame the talent of a Juventus side blessed with Deschamps, Zidane, Vieri and Del Piero.
At the turn of the millennium, Dortmund decided to emulate the likes of Real Madrid or AC Milan. BVB went public, netted €140m on the stock market, brought in more superstar players, and sank funds into stadium expansion.
It was to be a hubristic venture. Such spending became unsustainable the moment on-pitch results suffered, and by 2004, a club with superpower ambitions found itself on the brink of financial ruin. Germany has a history of suspicion when it comes to money-making and football. So when Dortmund’s financial gambles backfired, the club’s popular image also took a turn for the worse. They lost around 30% of their national fanbase at this time and with them went the club’s draw power for sponsors and investors.
Desperate times call for desperate measures and the club had to make some hard decisions to reassert their dominance in German football. In this 2 part series, I’ll be discussing the factors that came into play to steer Dortmund out from a state of total financial ruin to a reckonable force and a business model to be studied and adhered to.
1. New Board of Management
It was at the turn of the millennium when the fortunes of Dortmund started to turn. In 1999-2000, they avoided relegation by only five points. It emerged that problems had surfaced through the poor management of finances and a change of manager had rocked the club and affected results.
Management decided to take drastic action and Dortmund became the first, and only, publicly traded club on the German stock market. This generated money which enabled the purchases of Marcio Amoroso, Jan Koller, Ewerthon and the creative Tomas Rosicky. Dortmund became a force once again.
After winning the Bundesliga in 2002, they followed it up the next season by finishing third and having to enter the Champions League qualifying rounds. Dortmund faced Club Brugge in round two and it was Brugge who progressed to the next round after defeating Dortmund on penalties. The result for Dortmund not qualifying for the Champions League left them in a vulnerable financial position (amazingly they had budgeted for Champions League football without the guarantee of actually being in the competition). Poor financial management and a heavy reliance on foreign players who were being paid big wages sent Dortmund to the brink of bankruptcy. Their old rivals Bayern Munich even loaned them 2 million Euros to help pay their payroll for a couple of months.
2004 saw Dortmund usher in a new management board, charged with one simple, staggering objective: Rescue BVB.
A modern football club is a business, and like any business the point is to maximize revenue and minimize cost. Between 2005 – 2008, the club embarked on a mass clear-out in order to balance the books. All playing staff had their wages cut by 20% and their stadium, which was known as the Westfalenstadion was renamed ‘Signal Iduna Park’ to produce some much needed income.
Dortmund’s financial side have improved vastly since near collapse in 2005. Their revenue almost doubled in the two years from £103 million in 2010 to £199 million in 2012. This was due to the increase in the TV pool for German teams and Dortmund saw their revenue increase threefold from 21 million Euro’s to 60 million in 2 years. If we look further into their finances, their strong run in the Champions League (reaching last 16 as group toppers) has enabled them to generate a revenue of more than 41.8 million Euros. By reaching the finals in 2013 their potential earnings rocketed to around 80 million euros (including ticketing for home matches).
Dortmund’s morals also seems to have followed their growing success. When asked if City’s owner Sheikh Mansour, ever wanted to invest in Dortmund, the clubs managing director Hans Joachim Watzke, said he would refuse to meet him and remarked, “We want to keep our soul”. An admirable answer in front of Dortmund’s ever growing media spotlight.
With all the stars Dortmund have, their wage bill is now sustainable. Their wage bill is half of what Bayern’s is and a third of Madrid’s. With the fear of bankruptcy in 2005, Dortmund managed a profit of 160 million in 2012, mostly because of some inspired decisions taken by the new board of management.
It was however their appointment of one man as the manager of the club that turned out to be the biggest stroke of genius and changed the club’s fortunes forever.
2. Jürgen Klopp
On 23 August, as he made his way to the dugout for Borussia Dortmund’s first Bundesliga game against Bayer Leverkusen, Klopp entered into record books becoming the longest-serving manager in the history of the Black and Yellows, superseding Ottmar Hitzfeld, who was in charge from 1991 to 1997. Seven years into his reign at the Signal Iduna Park, the Stuttgart-born heavy metal aficionado has become a legend in his own right; a coach whose transformative effect on his club is rivaled only by that of Alex Ferguson, Arsène Wenger, Pep Guardiola and José Mourinho in the modern era.
In the 2000’s, whilst Dortmund were going through financial uncertainty, Klopp was making a name for himself at lowly Mainz. As a one club man, Klopp started and ended his playing career with Mainz. When he retired from playing in 2001, he was appointed their manager. It took several years for him to adapt to management. But in 2004, Klopp led Mainz to promotion to the Bundesliga. In his first season in Germany’s top flight, he guided them to safety as they finished 11th. They were also rewarded with a place in the UEFA Cup thanks to Germany’s fair play draw. Mainz followed up their impressive first season in the Bundesliga with another 11th place finish. Although the next season, they were relegated. Klopp stayed with Mainz as they tried to get back into the top flight at the first attempt. After failing to do so, he left Mainz and was quickly appointed as Borussia Dortmund’s new manager.
Before his move to Dortmund, Klopp was considered for the Bayern Munich job too. He revealed that he got a call from Uli Hoeness and he told him that they were considering two people for the manager’s position. Klopp was one of them. After a while, Hoeness decided against Klopp. Hoeness opted for the other candidate, Jurgen Klinsmann.
Klopp was also approached by Hamburg. But he decided against the job because his appearance was not what Hamburg wanted. Klopp wears a team track suit instead of a suit. Hamburg’s hierarchy also didn’t like the fact that the players were calling him by his nickname, ‘Kloppo’. Hamburg believed that he couldn’t have the respect of his players. Hamburg appointed Martin Jol instead.
It seems that he and Dortmund were meant to be. On his appointment, Klopp was instructed that he would have to follow a sustainable model which would not burden the club with debts. In his first season in charge, he led Dortmund to a sixth place finish and followed that up with a fifth place finish the following season. But it was in 2010-11 where Borussia Dortmund really came to the fore. Klopp had already adopted a youth policy. He was prepared to be brave and play youngsters. Youngsters like Mats Hummels, Nevan Subotic, Marcel Schmelzer, Sven Bender, Ilkay Gundogan, Mario Gotze, Robert Lewandowski and Nuri Sahin. These players would be the core to Borussia Dortmund’s recent success.
Not only was Klopp the right choice to steer Dortmund’s players, he was also the right person to front Dortmund’s public image. Klopp is a veritable one-man PR machine, with his quick wit and open passion, sniping at Bayern, admitting his own sadness when Kagawa and Götze left the club. The coach’s reflections of fan sentiments binds club and supporters ever tighter, while simultaneously raising BVB’s profile with famous interviews.
“If you don’t have money and, despite everything, you want quality, you have to be brave. We have grown together. Not having money doesn’t mean not being able to carry on working; it just means that you have to find other ways,” Klopp said in an interview with Spanish paper El Pais.
Dortmund’s style of play under Klopp has been breathtaking and refreshing. The speed of transition from defence to attack is phenomenal. The energetic duo of Gundogan and Bender in the centre of midfield and the pace of Marco Reus and Jakub Blaszczykowski on the break. Then there was Lewandowski upfront who would take any chance that comes his way. Hummels is a major part of this team. The central defender reads the game so well and his partnership with Subotic is key. Dortmund play is massively affected whenever Hummels doesn’t play.
Another key part to Dortmund’s play under Klopp is their relentless pressing. The energy that this team has is unbelievable. This new thing is what Klopp has termed ‘full-throttle football,’ which, as it did in the first leg against Real Madrid, generally overwhelms their opponents. The goal of playing at such a staggering tempo is not just to get the result. Klopp seeks more. “I want to feel it,” and he wants the fans’ experience of a Dortmund game to be like a drug that they can’t get enough of. He has certainly done this, with 80,000 packing the Westfalenstadion for home games to create what is arguably the best atmosphere in European football.
While the aforementioned points have definitely been the biggest factors around which Dortmund’s fortunes transformed, there are some more facets that have influenced Dortmund’s turnaround which we discuss in Part 2 of the series
As we pay heed to the nitty-gritty details of Part 2 before publishing it, why don’t you browse through the wide catalogue of sporting goods on offer at TossNPlay.com – India’s first dedicated online sports store.