FC Schalke 04: One of Germany’s Biggest Club’s Are Under The Threat Of Extinction

FC Schalke 04 are facing the possibility of losing their club as they know it if they are relegated to the third division of German football. They wouldn’t qualify to be granted a licence for this division due to the extreme financial crisis within the club, with debts amounting to around 165 million euros.

It is unclear what the exact repercussions will be if this relegation does happen. However, the most likely scenario would see them relegated directly back to the Regionalliga West. They would lose their professional status and have to work their way up through the divisions once again as an amateur club.

This would certainly go down as one of the biggest falls from grace in German football history. Especially for a club that won the German Cup, competed for titles, and reached the Champions League semi-finals amongst Europe’s elite just over a decade ago.

The State of Play for Schalke

They are currently just three points above the relegation zone in the Bundesliga 2, with just two wins in their last five league games. This is a very unusual position for the club from Gelsenkirchen to be placed in, as they are usually a staple of the Bundesliga. They are now deep into the most tumultuous time in the club’s history, with the rest of the campaign’s results ultimately deciding how their future will be shaped.

It’s vital to look at the club’s high points to show the context of just how drastic this sudden decline is. It’s also important to look at what factors have contributed to their financial crisis as well as how their performances on the pitch have plummeted. It is a combination of these elements that places Schalke in one of the most desperate situations in Germany’s football history.

Schalke have historically been one of the biggest teams in Germany, playing through nearly their entire existence in the country’s top tier. They won seven league titles between the years of 1934 and 1958. Although they have failed to win the league since this period, they have come close on several occasions.
Their next most successful period began in the late nineties, as they won the UEFA Cup in the 1996–97 season. They defeated Roy Hodgson’s Inter Milan on penalties after the two-legged affair finished 1-1. It was a huge win for the Royal Blues, as it kicked off one of the most productive spells in the club’s history in the two decades that followed.

They won the German Cup in successive seasons in 2001 and 2002 before winning the League Cup in 2005. Their league form was also really strong during the 2000s, as they had six top-four finishes in the Bundesliga including four times as runners-up.

Looking Back on Happier Times

Schalke’s most successful period in recent memory came in the early 2010s, as they reached a Champions League semi-final before eventually losing out to Manchester United. Raul, a legend of Real Madrid, and Manuel Neuer were among the members of this Ralf Rangnick-led team.
They also won the DFB Pokal Cup in what turned out to be one of Schalke’s most successful seasons this century, despite their disappointing 14th-place finish in the Bundesliga.

Although they lost several key players following this brilliant European run, Schalke still managed to keep up their strong league form over the coming seasons. They finished in the top half of the following seven seasons, including a second and two third-place finishes.

This also included getting out of their Champions League group and reaching the knockout phase four times during this time. All signs pointed for Schalke to continue this vein of form for years to come, where they could be a mainstay consistently in the top places in the Bundesliga and qualify for European competitions.

Could a Different Strategy Change the Club’s Fortunes?

Schalke were seen as one of the best hubs of talent in European football, with many of their youth products moving onto some of the biggest clubs. They became a club that many of the top clubs followed during this era, as many players were destined for bigger things.

This brought another facet of attention to the club outside of their performances, as they were viewed as a club where players could thrive and reach their potential. There have been some brilliant examples of this production line.

Manuel Neuer was one of the biggest examples, as he has gone on to have a stellar career. The shot-stopper was Schalke’s captain and was a pivotal part of their 2010–11 team that reached the Champions League semi-final and won the DFB Pokal Cup.

Bayern Munich came calling, where he has won 29 trophies, including numerous league titles and two Champions Leagues. He also solidified himself as Germany’s outright No. 1, where he was instrumental in their World Cup triumph in 2014.

Another integral member of that World Cup squad was Mesut Özil, who came through the youth ranks at Schalke and made a name for himself. Following a contract dispute with Schalke, he made the move to Werder Bremen, where he became one of the Bundesliga’s top players. before going on to play for both Real Madrid and Arsenal, winning several major honours along the way.

One of the more recent talents that stemmed from the Schalke Academy was Leroy Sané. The German emerged in the Bundesliga as one of the most exciting talents in Europe. This led to Manchester City splashing out for the German winger, who became an important part of Pep Guardiola’s title-winning teams. He would go on to move to Bayern Munich, where he has been having one of the best spells of his career in Bavaria.

There have been so many players that Schalke has nurtured into world-class talent, whether it be from their academy or in the early stages of players’ careers. Joel Matip, Ivan Rakitic, Leon Goretzka, Julian Draxler, Thilo Kehrer, and Weston McKennie, to name a few.

Ajax are a great example of a club that can move their talents to bigger clubs for substantial fees and reinvest small portions of the fees to keep themselves competitive on the field and stable off it. Schalke had a similar system during this period but the players they brought in for a fraction of the transfer fees they got were unable to replicate the performances of those who left.
This failure, along with no longer being able to produce world-class talent from their academy, began a downward trajectory for the club.

Not all the players mentioned commanded huge fees, despite the players they turned out to be. However, Schalke did receive large sums for the likes of Neuer, Draxler, Sane, Kehrer, and McKennie.

They were unable to follow Ajax’s example in this regard, as the departures continued to deteriorate the performances of the club rather than stabilise them. These large fees received should have helped the club with matters both on and off the field and prevented them from experiencing any kind of hardship in their performances or financially.

Many of the other players mentioned, such as Matip, Goretzka, Özil, and Rakitic, left the club for minimal money or free transfers. This was poor business on Schalke’s behalf, letting players run down their contracts or letting players go for cheap, which is another aspect of their transfer dealings that could have been handled better.

It’s difficult to say how different things could have been if they had alternative tactics regarding transfers, given the severity of the current financial situation. The process around transfers was also a contributing factor in the trouble the club is in both on and off the pitch.

Schalke’s only finish outside of the top half of the Bundesliga since 2000 came in their brilliant 2010–11 season, where they won the Cup and got to the Champions League semi-finals. However, starting in 2019, they then had consecutive bottom-half finishes before eventually being relegated the following season to the second division for the first time since the 1990–91 season.

This drop in the club’s fortunes coincided with the COVID-19 pandemic. Many football clubs around the world lost out on huge revenues during the various lockdown restrictions, with matches being played behind closed doors.

However, Schalke was particularly hard-hit financially because they disclosed that bankruptcy was a possibility in April 2020. This was largely due to the debt within the club and the lack of matchday revenue during lockdown.

The club acted quickly to try to combat these financial struggles by introducing a cap of £2.5 million per year for players’ wages. Naturally, this would affect the calibre of players that the club would be able to bring in and it wasn’t long before the club’s misfortune began to reflect on the pitch.

Schalke began the 2020-21 season in a disastrous fashion, losing their first three games by an aggregate score of 15-1, including huge losses to Bayern and Leipzig, losing by eight and five goals to nil, respectively. This left them at the bottom of the Bundesliga and led to the sacking of manager David Wagner. Manuel Baum was appointed as his successor but failed to improve results as the club went nine more league games without registering a single win.

Baum was ultimately sacked after the run of poor results. Huub Stevens and Christian Gross would also manage the club throughout the season, where they amounted to a thirty-game winless run starting from the season before. Following the appointment of Dimitrios Grammozis, the club’s fifth manager of the season, which emphasised the desperate state the club was in both on and off the pitch,.

Eventually, the club’s relegation to the second division in April 2021 made their misery even worse. This led to many riots and protests from the club’s fans after witnessing such a sharp decline after such a positive era for the club during this century.

Schalke were under huge pressure to thrive in the second division and began to get the club back on track by earning promotion. This return to the top flight looked uncertain, with the club changing managers once again and bringing in Mike Büskens. This turned out to be an inspired decision, as Büskens won eight out of the last nine matches to earn their promotion dramatically.

Despite the high promotion, the club failed to improve their state financially, as once again, events beyond the club’s control would prove to put a major dent in the club’s finances. They had to cut ties with their long-time sponsor, Gazprom, following Russia’s invasion of Ukraine.
This was another huge blow to the club financially as well as their stability to lose a main sponsor with whom they had such a strong connection. Chinese electronics manufacturer Hisense took over from Gazprom as the club’s main sponsor.

This financial situation heavily hindered Schalke’s ability to build a team that could compete in the Bundesliga during the summer window. The Royal Blues just couldn’t afford to sign the same calibre of player as they used to and were facing a fight for survival as soon as the season started.

They sat dead last halfway through the season and despite a temporary upturn in form, they couldn’t escape relegation. They would once again return to the second division but this time there would be no immediate return.

A Future Defined By This Season

Things have only gone from bad to worse for Schalke since their relegation back to the Bundesliga 2. They are currently languishing just two points above the relegation zone. They have only managed seven wins this season and currently sit at 23 points from a possible 63.

They remain in danger of being relegated to the third division for the first time in the club’s history. Manager Karel Geraerts must rally his players for the rest of the season to ensure the future of the club as they know it.

If they manage to stay up this season, then the club must use this as a major warning. They must begin to rebuild the club from next season onward and return to where they belong in Germany’s top flight. Schalke must never let themselves be in another situation like this where their entire club is in jeopardy.

It’s one thing for the club to be in such dire straits as far as the league standings but the club’s financial situation has only deteriorated throughout this season. This gross financial mismanagement puts Schalke’s history of being one of Germany’s most important clubs on the line.

This would be one of the biggest declines for a club in football history. They were a club consistently finishing in the top half, including many top-four placements along with domestic cup wins, the UEFA Cup win and that run in the Champions League to the semi-finals over the last three decades.

The idea that a club like Schalke, which has achieved those things in recent times, could potentially turn into an amateur team is unfathomable.

The players will be easily able to secure moves to other clubs of a similar level if this nightmare scenario becomes reality but the fans and the club itself are going nowhere as they may have to endure the darkest days their club may ever see. Time will only tell what Schalke’s future holds but one thing is for sure: the next 13 games are the most important in the club’s history.