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How Borussia Dortmund nearly lost everything before returning to the top of German football

Despite getting tonked by Spurs in the Champions League and bottling a nine point lead over Bayern Munich in the Bundesliga last season, Borussia Dortmund are the model of a sustainable modern club. But the German outfit very nearly went out of existence in the recent past. 

1997 saw Borussia Dortmund realise their greatest ever achievement: beating Juventus in the UEFA Champions League final. Goals from Karl-Heinz Riedle and Lars Ricken on 28 May that year ensured the illustrious trophy made its way to North-Rhein Westphalia for the first time. And they did it at Bayern Munich’s home ground of all places.

Within the club there was a belief that the club could use this triumph as a springboard to greater things, to possibly become the new dominant force in German football. BVB were going to do everything in their power to capitalise on this moment, both in a sporting sense and a financial one.

The reality was BVB had climbed the highest mountain and would never be able to maintain that peak. Only one Bundesliga title, secured in 2002, followed in the next 15 years, while relegation was avoided in the most dramatic of circumstances in 2007. Off the field, the desire to push the club into a new stratosphere precipitated a rake of near-fatal decisions from the hierarchy.

It’s understandable that they would want to advantage of such an opportunity; as outlined in Uli Hesse’s book, Building The Yellow Wall – The Incredible Rise and Cult Appeal of Borussia Dortmund, the club did not build on their European Cup Winners’ Cup success in 1966, and they did not want to make the same mistake again after winning the 1997 Intercontinental Cup.

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BVB then went and did something that no other German club, before or since, has done: they became a publicly traded company on the German stock market in 2000. This earned the club a monumental amount of money in one fell swoop, 270 million Deutschmarks (or £95m) to be precise. Such a move, although lucrative, was and continues to be damaging to the club’s image — authenticity, traditionalism, fan-first — when they are “technically far more corporate than any other team in the land”.

The money gained, however, is unlikely to have gone into improving the club or the squad, as debts were rising during this time. The club had become very fond of short-term deals that would give them a quick injection of cash, but cost them more money in the long run.

For instance, Dortmund had set up their own sportswear company, goool.de, so that they could reap all of the profits from kit sales. The problem is, they were in the business of running a football team, and should have just stuck to that first and foremost. Four months after setting it up, they sold it for 20m marks, and leased it back for 1.5m marks a year.

A bigger, more serious arrangement was to come though. Borussia Dortmund wanted the Westfalenstadion to be one of the host stadiums for the 2006 World Cup, but FIFA’s requirements meant that it needed an upgrade. In order to finance this, they entered into another sale-and-leaseback deal, agreeing to put the stadium into the hands of a real-estate fund in order to attract investment. Let’s put it this way: the club essentially sold their stadium.

At the time it probably seemed like a fine idea; Borussia would get the necessary funds (€75.4m) to improve the ground, all the while paying a yearly lease of €13m, before regaining ownership in 2017.

However, the television company that owned the rights to top flight German football at this time went bust, losing 989m euros, and taking away a source of much-needed income the clubs had been counting on. On top of this, Borussia’s attempts to become financially independent from football — they also ran a travel agency and internet company — meant they lost sight of matters on the field, making the quality of the squad all the poorer for it.

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Dortmund ran into major financial difficulty after failing to qualify for the Champions League in 2003, and it later turned out that the club had spent 200m euros in the space of three years, a monumental spend in the pre-Roman Abramovich era. You might recall this was around the time that Jens Lehmann ended up moving to Arsenal, and it’s clear to see why now: money.

By late 2004, it was revealed that Borussia were 118m euros, or £82m, in the red, as they had been hemorrhaging money. They would never be able to pay back the creditors without liquidating the entire entity, so they had to convince them of a new deal to help the club recover. This was no easy feat, as each of the 69 individual creditors had to agree, although they managed it but for one group.

Remember that real estate fund that leased the stadium? It was called the Molsiris investment fund, and included 5,800 men and women. These people, unlike the other creditors, had no personal relationship with the club, and likely would not have cared to see it vanish so long as they got their money back. At a meeting that took several hours to conclude, fans waited outside for a decision and had even consigned themselves to having to restart the club from the beginning all over again. Thankfully, that wasn’t necessary.

Borussia had come so close to folding, but had been saved by the skin of their teeth on that day in March 2005. The club would eventually recover to the point where they were successful again, with the financial help of a loan from Bayern Munich along the way, but it could have so easily fallen apart.

Supporters are now more central to the running of the club than before, and Borussia was able to win the Bundesliga twice under Jurgen Klopp, mainly thanks to the vision of sporting director Michael Zorc. A Champions League winner with Dortmund, Zorc put an emphasis on young prospects, leading the club to finding gems such as Robert Lewandoski, Marco Reus, Ousmane Dembele, Chelsea-bound Christian Pulisic, and former Man City starlet Jadon Sancho.

After losing 4-0 on aggregate to Premier League outfit Spurs in the last 16 of the Champions League, and being clawed back in the Bundesliga title race by Bayern, the morale among the Borussia faithful is low. And yet, in many ways the club is probably in its healthiest state for a long time. As for the hardcore fans, they will just be happy they can still cheer on their team.

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