Bundesliga Soccer A Tale of Two Cities

Footballing minnows FC Ingolstadt 04 and SC Paderborn 07 have experienced very different fortunes this season, with one heading into the bigtime and the other out of it. The ramifications, both professionally and financially, are stark.
Ingolstadt fans are excited about moving up from the second to the first division.

As the German professional soccer season approaches a dramatic climax, the clubs in the towns of Ingolstadt and Paderborn find themselves at opposite ends of the success spectrum, with one heading into the German premier league and the other heading out of it.

On Saturday, Paderborn will almost certainly be relegated to the second division after finishing the season at the bottom of Bundesliga 1, one of the world’s top leagues.

The club's departure will make way for a top-of-the-table Bundesliga 2 team to head in the opposite direction: Ingolstadt secured its place in the German footballing elite last week.

Promotion to Bundesliga 1 is a goldmine for clubs, in more ways than one. It brings sponsors with deep pockets, a slice of lucrative broadcasting revenue, packed stadiums and merchandising deals.

And for cities, the elite league brings visitors who eat and drink, stay overnight and check out the sights, according to Alfred Lehmann, the former mayor of Ingolstadt, home to car maker Audi, and a board member of the city’s winning soccer club, FC Ingolstadt 04.

This is really great for the city’s spirit. Alfred Lehmann,, former mayor of Ingolstadt and club board member

“The Bundesliga promotion will further boost the image of Ingolstadt, which already is a successful industrial city with among the lowest unemployment  and highest growth rates in the country,” he told Handelsblatt Global Edition.

“And it’s also good for Audi, given that a lot of fans like cars and will be interested in the factory’s sales and museum center.”

Audi, a subsidiary of the Volkswagen group, is not only the team's main sponsor with a jersey advertising deal of €6.5 million; it also owns 20 percent of the club via its subsidiary Quattro. The subsidiary, in turn, owns 100 percent of the 15,000-seat stadium it built for €25 million, or $27.8 million, in addition to training fields and coaching facilities.

Together with FC Ingolstadt 04 and VfL Wolfsburg, which is based in Volkswagen's home city, VW sponsors 16 teams in Germany’s top two professional leagues, more than any other company in the country.

Some are critical of Audi’s support for clubs like Ingolstadt, which they view as corporate-sponsored entities masquerading as factory clubs.

Video: FC Ingolstadt fans celebrate their win over RB Leipzig, which sealed their promotion.

“Does Audi play soccer?” Ingolstadt Managing Director Narald Gärtner said in an interview with the public broadcaster WDR in response to the criticism. While agreeing that corporate sponsorships help provide the money to acquire talented players and win games, he emphasized that more than money is needed.

That's true. Passion and determination have been the outstanding features of both Ingolstadt, which is joining the Bundesliga for the first time in its history, and Paderborn, which is about to end its first-ever Bundesliga season. Both teams have shown plenty of heart in their battle into the big league.

After winning its match against Leipzig last Saturday, second-division Ingolstadt automatically qualified for a spot in the 18-club Bundesliga. Fans in the city of 130,000 residents celebrated into the early morning hours, euphoric over the opportunity to see teams like Bayern Munich and Dortmund play in their own stadium.

“This is really great for the city’s spirit,” Mr. Lehmann said. “Everyone is totally excited about our achievements in sports, which include a hockey team that has won the German championship and been runner-up over the past two seasons.”

For Mr. Lehmann, it’s a dream come true. The club was formed in 2004 when fourth-division MTV Ingolstadt 1881 merged with seventh-division ESV Ingolstadt-Ringsee. The ascent to the top league didn’t happen overnight. As recently as 2010, the club was still in the third division, playing in front of crowds of 3,500.

Quelle: dpa
Paderborn lost to Schalke in the closing minutes of last week's game, almost certainly condemning them to second flight football next year.
(Source: dpa)

 

Paderborn’s rise from the lower divisions was similar, but no one is dancing in the streets of the 147,000-inhabitant city, where the mood is subdued as fans prepare to say goodbye to Bundesliga 1.

On Saturday, SC Paderborn, now at the bottom of the heap, needs something akin to a miracle to stay in the first division. The club must win its last game and the two teams nearest to it have to lose theirs, and even then it would have to win a relegation playoff against the third-best team from the second division. No one is holding their breath.

“It’s been a great season,” Uwe Krause, an ardent fan, told Handelsblatt Global Edition. “The first-division Bundesliga games have been a huge event here. They’ve been great for the fans and for the city.”

But Mr. Krause admits the thrill will be far less when Paderborn next season plays against second-division minnows such as Aalen and Sandhausen.

The Audi museum in Ingolstadt can expect plenty of visitors from car-loving soccer fans.

 

The finances change dramatically when clubs drop down or move up a division. In the 2013/14 season, the first division generated revenues of nearly €2.5 billion, compared to €458 million in the second.

“Clubs that make it into the top division earn more in all areas where they generate revenue,” said Peter Rohlmann, the author of a study on the economic impact of clubs being promoted and relegated. Merchandising sales, he told Handelsblatt Global Edition, increase by 20 percent and those from tickets 30 percent. Sponsoring revenue jumps by as much as 50 percent but the biggest increase is from television at 125 percent in some cases.

Of the €663 million in TV revenue scheduled for the coming season, €530.4 million, or 80 percent, will go to the first division and the remaining €132.6 million to the second, according to fernsehgelder.de, a website that tracks broadcast revenues. The money in the top league is distributed according to a points system based on how long a club has spent in the league and season ranking, among other factors.

Paderborn will lose several million euros in broadcast revenue if the club drops to the second division as expected. For players, the club had one of the smallest budgets in the league, €15 million, which it expects to cut by more than half in the lower division. Bayern Munich, by comparison, had a budget of more than €140 million.

Over the past 52 years, only 53 teams have made it into the first division. “The number of clubs with the money and talent is really small,” Mr. Pohlman said. “And they can drop down really fast. It’s no easy play.”

 

John Blau is a senior editor at Handelsblatt Global Edition. He's still waiting to see Fortuna Düsseldorf return to the first division - but isn't holding his breath. To contact the author: [email protected]