The Rise, Fall, & Rebirth of Borussia Dortmund

Borussia Dortmund are one of the best run clubs in European football despite having close to half the revenue of Bayern Munich under budget's equivalent to just 60 percent of the bavarians Dortmund only missed out on the Bundesliga Title by virtue of goal difference last season and they would have won the league but for a draw with mines on the final day of the campaign Borussia Dortmund have roughly the same-sized wage bill as Premier League relegation candidate severton and already relegated Leicester city Dortmund themselves by comparison have been Bundesliga runners-up in four out of the last five seasons and have only failed to qualify for the UEFA Champions League once in the last 12 years in the last two years alone Dortmund of sold Jude Bellingham Jaden Sancho and erling Harland for a combined total of almost 300 million euros none are actually their record sale that title belonging to Usman dembele who was sold to Barcelona for a potential 145 million euros six summers ago despite their frugality Dortmund still ranked 13th in the Deloitte football money League above in Summerland AC Milan and Newcastle United there are those who question why Borussia Dortmund don't just spend a bit more pay slightly higher wages and look to compete with Bayern and Europe's biggest clubs but to understand the Dortmund of 2023 the Plucky Innovative and Frugal underdogs up against the Bayern juggernauts in the Bundesliga you must first understand how and why the club very nearly died less than 20 years ago during the mid-1990s Dortmund tasted genuine success for the first time in over 30 years in 1995 and 1996 they won back-to-back bundes Liga titles never previously haven't been crowned as German Champions during the Bundesliga era and in 1997 they followed that success up with their first ever UEFA Champions League Crown dortmund's hierarchy liked the feeling of winning which club doesn't but they were prepared to do just about anything to cling onto it what ensued was almost a decade of some of the most Reckless spending in the history of European football culminating in a crisis which came within literal minutes of costing Dortmund their very existence in the nearly two decades since the events of dortmund's near-death experience have become the stuff of Legend with various claims and counter claims surrounding those ultimately responsible how Dortmund managed to pull through and perhaps most controversiable the significance of a 2 million euro loan from their great Rivals Bayern Munich which only became public in 2012 so following a number of requests it must be said I thought that it would be interesting to take a look at Borussia dortmund's wild spending close running with death and staggering Revival when compared with other clubs who have come that close to Total collapse so sit back relax and join me on a journey to Germany's industrial Heartland where football and Borussia Dortmund means everything but was very nearly lost to a community forever Borussia Dortmund have always been underdogs founded by a group of young men in opposition to the strict Trinity youth football team controlled by the local Catholic church and Parish priest Dortmund instead took their prefix Borussia from a local Brewery success was hard to come by and after a brief spell trying to pay professional footballers in a bid to improve their fortunes the exorbitant costs almost saw Dortmund declared bankrupt in 1929. the club survived but some of their staff didn't following the rise of the Third Reich executed in the final days of the war for using the club's offices to Prince anti-nazi pamphlets Borussia dortmund's president wasn't executed but he was forced to step down and replaced by a party stooge after refusing to join the Nazi party it was during the 12-year Third Reich the Dortmund status as underdogs was really cemented namely in opposition to their local rival schalke still one of the thirstiest derbies in all of German Football known as the river Darby it was a bit of a mismatching truth shulker were the most successful Club of the Nazi era winning six German championships and reaching nine National Finals in only 12 years meanwhile Dortmund never reached a single Final in fact Dortmund began the Nazi era in the second tier of the West Fallon District League only winning promotion to the galilego westfallen which schalker won every single season in 1936. by the time dortmund's gold generation rolled around in the mid-1990s they had won just three German championships all between 1956 and 1963 and were trophyllis since the 1960s barring a single dfb pokal dortmund's presidents and CEO at the time was a local lawyer named Gad niebaum who became President in 1986 when Dortmund were once again on the brink of bankruptcy and relegation in the 1985-86 season Dortmund finished 16th in the Bundesliga only managing to retain their top flight status through victory in the second Bundesliga promotion relegation playoff after that Sue likes playoff time with Fortuna cologne ended in a thrill draw in aggregate a replay was required which Dortmund won eight nil and lived to fight another day over the next few years nibbound built Dortmund back up into a formidable Force within the Bundesliga winning the dfb pocal in 1989 and finishing second in the league in 1992. Dortmund were actually tied on points with Stuttgart in the 1991-92 season in the first season following reunification in which East German clubs competed in the Bundesliga missing out on the title by virtue's solely of goal difference sound familiar having come so close Nai Baum and the rest of the Dortmund hierarchy were sermoned to push even harder in order to realize their ambitions Matthias Sama formerly of Stuttgart and one of the best defenders in the world was brought in for big money from Inter Milan fellow German international Stefan writer formerly of Bayern Munich was signed from Juventus Stefan Freud was prized away from dortmund's bitter rival schalke Carl Hans Riedel a rye for a club record fee from Lazio and Andreas mola and Julio Cesar were both brought in for significant fees from Juventus this was serious investment and it paid off in 1991 Dortmund appointed Ottmar hitsfeld and in 1995 they won their first Bundesliga title followed by a league and super cup double The Following season and a super cup and their UEFA Champions League double the season after that from their Extinction just a decade ago Borussia Dortmund had become Bonafide German and European powerhouses to say that it went to naibaum and cos heads would be something of an understatement the European Crown most notably of all twin wood falling from first to third place in the Bundesliga That season seemed to have a particularly profound effect they were no longer content with being Plucky underdogs now Dortmund saw themselves as European Giants and they intended to spend as such the following summer haiko halik Jurgen Kola and Ruben Souza were signed for a combat total in excess of the equivalent of 10 million euros Dortmund broke their spending records again in the summer of 1998. again in 1999 2000 and 2001 following their Champions League win Dortmund had actually slumped to a miserable 10th Place finish in the Bundesliga and in the 1999-2000 season they fell even further into 11th instead of reflecting upon those failures taking stock of the significance income shortfalls caused by a lack of European football and were addressing their spending as a result nybomb figured that the problem was that they hadn't spent enough in the 200102 season Dortmund broke all Bundesliga spending records signing Brazilian International Marcio Amoroso for a German record 50 million Deutsche marks or 25 million euros along with Jan collar for more than 20 million Deutsche marks in a summer of spending there was exceeded only by Real Madrid in the in the short term nybomb was Vindicated under the management of former star signing Matthias summer Dortmund won their first Bundesliga title since 1996 in the 200102 season finishing one point above perennial nearly Med by a Leverkusen and heralding their return to the UEFA Champions League in the long term neiban would be forced to resign in disgrace and later convicted a fraud in the words of GAD naibam's successor Hans jockenbotska who is still dortmund's CEO today it is pretty simple over time if you spend 20 or 30 million euros more than you earn and you don't have an oligarch or a nation like Abu Dhabi or Qatar to support you financially then at some point you have a problem end quote well Dortmund did indeed have a problem and a pretty big one though the true extent of the plight facing the club Only reached the public domain in 2005. by that stage Dorman had been hemorrhaging muddy for the best part of a decade and their malaise was exacerbated by the club's hierarchy refusing to acknowledge that there were any problems for years and instead using various Financial tricks Shenanigans and short-term wranglings in order to maintain their spending levels and postpone the inevitable Reckoning that was to come I don't suppose that sounds familiar at all does it I can't imagine that there would be any contemporary examples of a club doing something as Reckless as that dortmund's demise along with a handful of other German clubs was accelerated by the collapse of the Kirk group in 2002 with debts of nearly 6 billion euros the Kirk group's main asset was Kirk media whose subsidiary Kirk Sports owned the broadcasting rights for the Bundesliga the company's demise meant a collective shortfall of 1.5 billion euros across the bundesliga's 18 teams is since all 18 into a state of Crisis and uncertainty but for Dortmund who were just won the Bundesliga title it was existential to plug the financial black hole and in a desperate attempt to pay their most urgent creditors Dortmund either sold or pawned virtually everything that the club had once owned from the newly renovated Westville and stardian and the club's own independent kit manufacturer all the way through to the right to their own name and badge all flogged off to the highest bidder the West valenstadian just to give one example was sold for 75.4 million euros to investors and leased back to Dortmund for 13 million euros a season in 2002 until Dortmund would regain ownership status in 2017. it was all part of dortmund's desperate desire for Grandeur they didn't just want to have the best team but the best Stadium the biggest capacity and the most VIP seats the westfallenstadians capacity was raised to 65 000 for the 2006 World Cup and it meant that Dorman were successful in their bid to host one of the semi-finals the 15 years with a 13 million euro lease ended up costing the club 195 million euros though an enormous fee in comparison to the 75.4 million euros that they sold the ground for in the first place if you think that sounds mental and it is niband was seriously considering the possibility of building a roller coaster to go around the Westville and stardian it was all part of dortmund's innovative strategy to be at the Forefront of football entertainment which often seem to focus on almost every aspect of the club's operations other than the football itself a reminder just in case one were needed that this was a club mired in an unspoken crisis and up to their eyeballs in debt all the while the CEO was floating the serious possibility of turning one of Europe's most iconic football stadiums into a theme park it was fitting in a way not because Dortmund really were leading the way Innovation but because the club had become a total circus and the boardroom at the Westville and stardian was already living in a Fantastical world of Make-Believe throughout all of this madness Dortmund just kept on spending you might have thought that at the point at which you are selling your stadium with the promise to buy it back for an additional 120 million euros along with your badge and names for an insurance firm with a 5 million euro and Rising unpaid tax bill you would start to curb your transfer expenditure it's just somewhere in the region of zero Euros whilst taking a sledgehammer to your wage Bill oh no not a Borussia Dortmund in the summer of 2002 fresh off the back of that Bundesliga title win and despite the Kirk group's collapse plunging the club ever deeper into a crisis Dortmund saw off competition from some of Europe's biggest clubs to sign Torsten frings for 10 million euros the following summer presumably using Wonga loans by this stage a contractual Clause forced Dortmund to sign Brazilian Wing back Evan Nielsen for an enormous 15 million at the same time that Dortmund was still throwing silly money about having dropped a third in the 200-203 season they were pawning the literal transfer rights to their own players namely some of their most valuable players in the forms of Thomas rozitsky Everton and Christoph metzalda German property magnate Albert Sal who was a lifelong Bayern Munich fan lent the club 15 million euros but that loan was secured against the transfer rights of those three high-profile Internationals unhappy at dortmund's Annabella Tita repayers alone Saul wants turned up to a meeting of the club's creditors dressed in a Lederhosen it was around this time that another high-profile Bayern Munich fan and indeed bayern's general manager Uli hernis agreed to lend Dortmund 2 million euros on behalf of the Bavarian Giants 20 years on it has become possibly the most controversial and hotly debated Financial Arrangements in history of German Football it's often said that because of that loan Buy and Save Dortmund that is something of a gross exaggeration Dortmund were in 122 million euros of debt at the time bayern's loaned therefore equated to less than two percent of dortmund's overall liabilities it's alone came nowhere near to saving them nonetheless when it came to paying dortmund's most urgent and demanding creditors it's also true that every little helped and there weren't many people or institutions that would have lent to the club at the time what's more dortmund's alone was interest-free so long as it was repaid in the next six weeks which was all that Dortmund said that they needed it for at the time after six weeks 1.5 million euros was repaid the remaining 500 000 Euros accrued five percent interest until it was settled by offsetting the sale of torstenfringster Bayan in 2004. it wasn't exactly charity then but the terms were far more favorable than anything that Dorman could have received from any financial institution the buy and Loan went totally unreported by either side until February 2012 when Uli hernis by this stage binds presidents and on the verge of serving an 18-month sentence for tax evasion revealed all hernis told reporters quote when they meaning Dortmund were aware that they could no longer pay their salaries we gave them 2 million euros without collateral for a few months I'm a big fan of tradition in sports and I don't think that was a bad thing to do end quote the timing of hurtis comments purely coincidentally I'm sure came just as dormant had leapfrogged them in the race for the Bundesliga title and shortly after it was confirmed that they had beaten Bayern to the signing of Borussia Munchen gladback star Marco rice there are some in Dortmund who believe that the lone in of itself was always a cynical Ploy providing buy-in with permanent leverage and bragging rights that they could always Lord over their Rivals given the relatively small size of the loan then some wish that the club had never accepted that is probably a little bit fanciful if bayern's intentions really were wholly misanthropic the easiest thing to do would have been to say that Dortmund had it coming and simply to let them burn after all it is hard to imagine just for example if after 15 years of enormous spending Manchester City suddenly revealed that they were in dire financial trouble that the glazers would come to their beck and call even with a relatively modest loan or if things were to go south for Chelsea and Todd bowling that Spurs or Arsenal under Daniel Levy or stankronke would offer them a helping hand quite frankly it seems more likely that they would race to the Premier League demanding an immediate points deduction or Premier League expulsion after all dortmund's massive spending denied Bayern of at least one and possibly two Bundesliga titles and even Champions League qualification one season as perilous as the situation at Dortmund was sympathy would have been in short supply throughout most of the world's football leagues it is also worth noting that bind's 2 million euro loan to Dortmund was made in 2003. a couple of years before dortmund's financial crisis had rarely come to a head to say that Bayern saved Dortmund therefore simply isn't true but the idea that they only ever had cynical intentions is likely just as misplaced by and after all also made favorable loans to 1860 Munich and thanks Paul Lee when they face similar financial hardship it was only in early 2005 that the true extent of dortmund's deck pile and fire sales were made public when supporters discovered most notably of all the sale of the club's name and badge there was understandable fury on February 12 2005 before a game against bokham Dortmund fans held a rally in opposition to the way in which the club was being run uniting the hand in our iconic slogan Not for sale dormant fans it would be remiss of me not to mention had broadly bought into nibam's vision and were content with the club's spending and ambition of course they weren't aware of the serious long-term harm that was being caused by that spending and various Financial arrangements and it is rare that supporters don't cheer on their clubs spending lots of money it'll be to become ever more competitive when Leeds United threw tens of millions of pounds at the likes of Rio Ferdinand Robbie Keane and Seth Johnson there weren't Mass protests outside of Allen Road it was only once the West York Club finished outside of the Champions League places and just as with Dortmund the extent of their debt became public knowledge that most fans became perturbed with their spending levels Portsmouth fans certainly weren't complaining about signing the likes of Soul Campbell David James Peter Crouch and Jermaine Defoe culminating the club's 2008 FA Cup win but most Were None the wiser in terms of the Calamity there was still to come you could argue that fans ought not be quite so naive and I think that there probably is a greater awareness and concern surrounding Financial recklessness now than there was 10 or 20 years ago but for the most part they just want to see their teams compete and are willing to afford a great deal of good fate towards their owners and administrators until proven otherwise fabarusia Dortmund it all came down to March 14 2005. the club was 122 million euros in debt failures are qualify for Europe let alone the Champions League in the 2003-04 and 200405 Seasons despite their spending had reduced the club's annual revenue to just 75 million euros in other words their debt was equivalent to 163 percent of their revenue it would take almost two seasons then without paying any players staff for incurring any other operating expenses whatsoever while somehow managing to maintain the same level of Revenue just for Dortmund to pay off their debt let alone repurchase all of the assets that they had already vlogged off of course that would be impossible a football club needs players staff and to fund their day-to-day operations and even if they didn't Dortmund still had to pay the 13 million euros a season lease just a play at the westfalenstadian as dortmund's Empire rapidly crumbled gerd nybaum was forced to Arizona he was replaced as Dortmund president by the politician and lawyer Reinhard raubel who had previously served as Dortmund president in the 1970s and 80s and he was replaced as CEO by businessman Hans jockinvatzka who had been the club's Treasurer since 2001. vatska was appointed CEO on a Tuesday and on the Friday he held crisis talks with the club's creditors if the creditors weren't satisfied with what vatsuka had to say and to offer them Dortmund would be declared bankrupt on the following Monday before vatska had even had a week in their job bankruptcy at that time would have meant an enforced relegation to the fifth tier of German football for former European Champions and Bundesliga title winners less than three years ago it was simply unimaginable an official Club statement finally made it clear to supporters the dortmund's financial situation was threatening the existence of their there was immense relief when it was broadcast live the dortmund's creditors had agreed to give vatskat and the club an extension to repay their loans but that agreement came with a star Clause at any time in the future any one of dortmund's creditors would be able to call in their loan with just two weeks notice if any of the club's major creditors chose to do so Dortmund would have been forced to declare bankruptcy regardless furthermore as part of the agreement Dortmund would be overseen by a panel of their creditors for the next two years who would tightly monitor their spending through to 2006. that's together with Dortmund sporting director Michael Zork managed to slash the club's budget from 57 to 24 million euros in the summer of 2005. given that Dortmund had lost 27 million euros in the second half of 2004 alone these were much needed cost cutting but they didn't come without considerable risk themselves more than halving the club's budget off the back of the season in which Dortmund had finished seventh twenty points above the relegation Zone and 22 points behind Bayern and first meant that there was a real fear of relegation The Following season if you look at other teams at that time both in Germany and throughout the continent who had landed themselves in serious financial trouble and were forced into making fire sales few in as dire Financial predicaments as Dortmund it should be said there are virtually none that have fully recovered even now and certainly none to the same extent or with the swiftness of Dortmund Leeds United's demise mentioned earlier on coincided almost exactly with dortmunds but following their fire sales they were relegated twice in three seasons hit with a massive points deduction spent three years in League one and despite a brief recent return to the Premier League after 16 years are now back in the championship once again Portsmouth meanwhile her third even worse Pompey were relegated from the Premier League in 2010 during the same season that they reached their second FA Cup Final in just three seasons three relegations in four years landed Portsmouth in League two by 2013 and despite being acquired by American billionaire Michael Eisner in 2017 they are yet to return to the championship let alone the Premier League over in Germany FC Nuremberg at 1860 Munich faced similar crises following the collapse of Kirk media in 2002. Nuremberg who have been crowned German Champions even more times than Dortmund throughout their history were relegated in 2003 and are now a mid-table team in the second Bundesliga where they have spent eight out of the last nine Seasons 1860 Munich meanwhile were relegated in 2004 never to return and suffered a humiliating double relegation in 2017 relegating them all the way down to the regional Forte regionali gabayan they now compete in the third League even dortmund's bitter rival schalke his crippling Financial woes arrived a little bit later have been relegated twice in the last three seasons returning to the second Bundesliga last season there are now more former German champions in the second Bundesliga than there are in the Bundesliga itself Dorman avoided a similar fate due to the Fine work of vatsuka and Zork their Lois League finish came in the 200708 season in which Dortmund finished 13th under Thomas Dole but also made the final of the dfb poker throughout Dorman's golden age and into the early 2000s the club had never been too reliant upon their Academy structure Stars intended to be bought rather than developed that all changed under vatska partly through necessity of course since the club had no money but it was masterfully carried out over the next few years the likes of Yuri sahin and Mario gertza came through dortmund's own youth ranks the real turning point however following that 13th Place finish was the appointment of Jurgen klopp in the summer of 2008. klopp had done a magnificent job at Mainz over the preceding seven years and vatska was determined to bring him to Dortmund Dortmund had a youthful energized and ambitious group of players and as far as vatska was concerned there was no one better qualified to Marshall then klopp that summer the whole mood of the club changed Dortmund had a negligible NetSpend but climbed all the way up to sixth in the division just five points off the Champions League places the following year their net spend was just 4 million euros but they welcomed the likes of Max Hummels svenbender and Kevin gross greats to the club that's took them up to fifth and the summer of 2010 provided yet another key flash point in the club's Revival Shinji Kagawa and Lucas pischeck arrive free of charge as dortmund's net spend was less than 1 million euros meanwhile polish Center forward Robert Lewandowski was signed for less than 5 million euros from Lake poznan The Following season six years on from very nearly going out of business altogether Dortmund won the Bundesliga title a year after that they won the double and then in 2013 they faced the club that had lent them 2 million euros a decade ago whilst they were in crisis in the final of the UEFA Champions League Dortmund had done it all effectively without spending anything and indeed whilst continuing to pay back their debts without State ownership blood-stained billionaires or even very many notable wealthy benefactors the only major exception to that was Florian hom a hedge fund manager whose 20 million euro investments in Dortmund in 2004 through his Cayman island-based company played a key role in supporting the cash drop Club whilst also helping to overthrow dortmund's existing management through Clauses attached to his Investments Dortmund have now gone 11 years without winning the Bundesliga title as has it should be said every German Football Club that isn't called Bayern Munich though they should have won it last season and finished level on points with the bavarians even over the last 10 years still dortmund's CEO Hans yuckenbotsker acknowledges players and agents have become much more impatient and demanding that has made it increasingly difficult for Dortmund to keep hold of their best players and the club has turned its attention to maximizing profit particularly on young players when forced to sell them inu's mandem Bailey Jude Bellingham Jaden Sancho Christian pulasich and erling Harland alone Dortmund have raised nearly 500 million euros in player sales that's the best part of half a billion euros on just five players Dortmund have gone from being Germany's highest Spenders on transfers to by far the League's highest earners and close to the highest in all of Europe it is a lesson in how to run a football club from a cash flow perspective though it is also incredibly difficult to compete to the highest level as a stepping stone for players when your competition are almost all the Final Destination ultimately Borussia Dortmund enjoyed a miraculous golden age in the mid 1990s and they felt that that growth would continue forever they spent money based upon that ill-fated assumption and when it didn't come to fruition they spent even more money in the delusional hope that one more signing would see their master plan come good in October 2000 nybomb even made Dortmund the first German Football Club to go public raising 130 million euros on the Frankfurt Stock Exchange shares in the club were initially listed at 11 Euros before the decade was done the value of the club had dropped to below one Euro a share in 2012 gerd nybomb lost his license to practice law and it was reported that his Law Firm had in excess of 17 million euros in liabilities in 2015 he was given a 20-month suspended prison sentence for breach of trust credit fraud fraud and forgery of documents before he resigned naibam had been in talks to sell the next 12 years worth of dortmund's match day Revenue in addition to the club stadium name badge kit manufacturer and the transfer rights to several of their players dortmund's 2005 crisis was their third and indeed their closest encounter with total Annihilation this time the club appears to have learned their lesson so the next time that someone asks you why Borussia Dortmund aren't a bit more ambitious don't just roll the dice or throw a bit of money at things now you know that is it for today's video but thank you all very much as ever for watching hit the like button if you enjoyed it let me know your thoughts Down Below in the comments and of course it goes without saying make sure that you are subscribed and have notifications turned on for both this Channel and my second Channel both of which should be on or about to appear on your screens now along with a couple of videos that you might want to watch after this one you can also find me on Twitter or on Instagram via the username at hrtc sevens on both should you wish to do so

Channel: HITC Sevens

Views: 188,409

Keywords: HITC Sevens, Football, Soccer, Borussia Dortmund, Borussia, Dortmund, Finances, Crisis, What On Earth, Is Going On, Downfall, Demise, Owners, Owner, Money, Collapse, Bundesliga, Champions League, Westfalenstadion, Economics, Bayern Munich, Bayern, Documentary

Id: 34wgu7AHtNs

Length: 33min 9sec (1989 seconds)

Published: Fri Jul 14 2023