The Baden-Württemberg club have suffered huge losses over the past year and continue to do so, mainly due to lack of match day income and ticket sales.
|Photo: Rudolf Simon, Wikimedia Commons, CC BY-SA 3.0|
The coronavirus pandemic has seen several German clubs face adverse financial situations. Situations clubs have never experienced before, which prompted few to fall back and cut spending, cut wages, lay off employees or apply for a loan – just like VfB Stuttgart 1893.
While the 50 + 1 model prevents clubs from being financially constrained, it does not prevent them from facing difficult circumstances like in the current scenario,
VfB Stuttgart applied for a loan in the spring of 2020 to reduce its loss of income linked to the pandemic which amounted to more than 30 million euros in 2020.
Now they have seen their loan application approved by the federally owned German development bank Kreditanstalt für Wiederaufbau (KfW).
According to the official statement from Stuttgart, the five-year loan is tied to other conditions in addition to full repayment. For example, the VfB undertakes to reduce its salary volume in the professional football team, as well as in management and administration, by the amount of funds called up over the term of the loan, if it is used. In addition, continuous and transparent financial reporting to KfW over the entire period is mandatory.
After the five-year loan term was approved, Stuttgart CEO Thomas Hitzlsperger said the club are committed to joining in a financially and economically sustainable and transparent way to move forward.
“We would like to express our thanks to the managers of KfW, the political decision-makers and the representatives of our in-house banks who accompanied us on this trip. The additional conditions correspond to the principle of solidarity of our association and are at the same time an important signal that we send to politics and society with full conviction: VfB Stuttgart was committed to a more sustainable economy and stronger in professional football even before the pandemic and is now and will continue to do so consistently in the future, ”he said.
CFO Stefan Heim gave his word on the prudent use of the loan: “We will use this loan prudently and with great care to ensure the continued economic survival of VfB Stuttgart. The ability to use it alone creates additional security and the ability to act for us in these uncertain economic times.
In recent seasons, Bundesliga clubs such as 1. FC Kaiserslautern, Schalke 04, FSV Mainz 05 etc. have already made known their difficulties, on and off the pitch.