It has been a tough year for Schalke 04, a lack of fans at their games combined with very poor performances on and off the field has seen the club relegated from the Bundesliga I for the first time in 30 years.
Add to that a mountain of debt and a desperate need to address this, the club’s fans have had some good news in the past week after sports and esports betting company Betway announced they have become one of the primary sponsors of the club for the next three years.
The agreement comes into effect on 1st July 2021 and offers the beleaguered club some financial assistance after what has been a disastrous 12 months and which has also seen the club forced into a difficult decision regarding its LEC League of Legends esports franchise.
Financial Issues force Esports Cutback
The deal with Betway is clearly an important one for Schalke 04 given the clubs’ current plight regarding its perilous financial situation.
After a disastrous season in the Bundesliga I last year, the clubs’ finances have taken such a hit after a succession of failed managerial appointments, no fans at home games, and ill-judged signings that something had to give.
Unfortunately for fans of League of Legends, it looks to be Schalke 04’s LEC League of Legends team, with the German club putting their spot up for sale for €30 million.
In fact, their LEC spot has already been sold. Schalke 04 has completed the sale of its League of Legends European Championship licence to Swiss esports organisation Team BDS. According to their announcement, the sale will be finalised at the end of the Summer Split 2021. The spot is being sold for €26.5 million. This is a pretty good return on their investment. They reportedly bought the spot back in 2019 for €8 million. Team BDS is a Geneva-based esports organisation with teams in League of Legends, Rocket League, and Rainbow Six Siege esports.
However, with the club facing a debt of an estimated €219 million (and that was back in February and the likelihood is that the debt will only have grown since then), it is hoped that the sale of their LEC spot, together with more deals such as the one announced with Betway can help the club stem the deluge of losses it has made.
In truth, only a swift return to the Bundesliga and later on, the return of Champions League football will likely make a big enough dent in Schalke 04’s mountain of debt.
The sale of their LoL LEC spot and the deal with Betway however do offer the club some breathing space as they seek to return to the top flight of German soccer this coming season.
The purchase of their LEC spot by Team BDS will give them a little more breathing room for the current financial year. However, the sale of the spot and the financial assistance from Betway will only make a small dent in their debt. They will need to expand their network of partnerships and sponsors. In fact, they may end up looking more like an esports organisation than a football club.
In the meantime, deals like the Betway one will enable Schalke some stability going forward and it also expands Betway’s presence into Germany still further, with the company already operating several similar sponsorship deals in other countries around the world.