How big is the minus that 1. FCN made last season? That was the intriguing question ahead of the club’s virtual Annual General Meeting.
The answer from Chief Financial Officer Niels Rossow was either sobering or satisfying, depending on your point of view: The club closed the 2020/21 financial year, which was marked by the Corona pandemic, with a minus of 9.4 million euros.
To be able to speak of the past season as a mixed one at all, the FCN owes its good final spurt in the last third of the season with decent results and mostly good performances. The economic area shows parallels to this as far as the course is concerned. During the last business year, which ran almost parallel to the season, the Franconians were threatened at times that they would use up their positive equity capital of 10.4 million and slip back into the red. The club was able to prevent this from happening, and on the cut-off date of 30 June they remained in the black at 1.1 million euros. However, this also means that CFO Niels Rossow had to report to the members at the annual general meeting that the club closed the 2020/21 financial year with a minus of 9.4 million euros. At the same time, the debts increased by 3.2 to 13 million euros. An amount the club borrowed from a private individual.
Missing spectator revenues big challenge
The question of whether one can nevertheless speak of a decent result in view of the Corona pandemic cannot be answered with a simple yes or no. Since the club lost an important basis of its business operations due to the ghost games, namely the budgeted spectator revenue of almost nine million euros, the year was unquestionably “extremely challenging” for that reason alone, as Rossow emphasised. However, the formula “all Corona” only applies to a limited extent, because the nine million euros were significantly reduced by short-time work for the staff, salary cuts for the professionals and state aid. And the fact that, for example, around 2.5 million euros less flowed into the TV funds was due to the poor ranking of the 2019/20 season with the near-relegation to the 3rd league. The fact that total revenue fell from 55.2 to 35.8 million euros is unquestionably largely attributable to the Corona pandemic.
However, the year was also extremely challenging because it heralded the inevitable radical reorganisation following the Bundesliga relegation in 2019, which resulted in the double payment of expensive staff such as severance packages worth millions of euros.
FCN sets up own marketing department
At the same time, however, according to Rossow, the FCN was also able to afford a severance package “thanks to great discipline”, which the FCN considers an important strategic decision for its future: It pulled the special termination option granted to FCN by the 2018 contract with sports marketer Lagardere, formerly Sportfive, which was extended until 2028. The CFO sees the severance payment due in the mid-seven-figure range as a good investment for the club’s continued economic basis. The FCN is now setting up its own marketing department, and from 30 June next year it will no longer have to hand over anything when it signs a new sponsorship contract. The commission for the sports marketer, who will continue to operate in parallel, was and will continue to be between 20 and 30 per cent until June 2022. As Rossow sees the club as clearly “under-marketed”, he says this is a huge opportunity for the club.
“With the current stadium, it is not possible to become an established first division club. And that remains our goal. “
NIELS ROSSOW
Of course, this has only a very limited effect on the current business year. If there is no further exclusion of spectators because of Corona in the winter, he expects a loss in the seven-digit range.
Will the stadium construction become concrete?
In another point, Rossow could only report positive news. The FCN has made it its mission to be much more than just a football club – and to be perceived as such. The FCN’s intention to increase its social relevance has recently been followed up with many, many social projects.
Another important topic Rossow mentioned was the construction of a new stadium. A topic that the club’s leaders, no matter what their names, have taken up time and again. This time, however, it seems to be taking on more concrete features. The club is already in close dialogue with the city, the CFO told the members – and with the financing of the project being difficult, to say the least, there are very concrete possibilities for a solution. According to Rossow, one thing is already clear: “With the current Max Morlock Stadium, it is not possible to become an established first division club. And that remains our goal. “
