Crisis at 1. Fc kaiserslautern: pact with the devils

Kaiserslautern used to be a soccer stronghold. A huge stadium bears witness to this. Now it may be the club’s undoing.

A lot of money for nothing: The Fritz Walter Stadium on the Betzenberg Photo: Jan Hubner/imago

"This is a marriage of convenience. But it’s better than having to bear the costs of the divorce," says Mayor Klaus Weichel, describing the situation of the city of Kaiserslautern. The city’s best-known child, 1. FC Kaiserlautern, has long since ceased to spread diabolical terror in soccer. Instead, the stadium of the club they call the "Red Devils" is causing hellish problems in the city’s purse.

On Tuesday evening, the Kaiserslautern city council will decide whether to reduce the stadium rent again if 1. FC Kaiserslautern is relegated to the third league. If the rent reduction is not granted, the club faces insolvency.

"That’s hard on reality. The club lives off spectator revenue and TV money," Weichel explains, but also makes it clear that his only concern is the city’s finances, asking, "Why is the core business of a city to own a stadium and maintain a professional team?"

Soccer became the core business of Kaiserslautern, a city of 100,000, when the World Cup was awarded to Germany. While Germany was immersed in soccer bliss in 2006 and enjoying its summer fairy tale, a fierce storm was already raging in the shadow of the Betzenberg. "It was hype back then and the contract was a sports bet," Weichel accuses those responsible back then.

Things went downhill with the new stadium

The stadium in Kaiserslautern, which was expanded to a capacity of 47,000 spectators for the tournament, brought the Kaiserslautern soccer club to the brink of insolvency. In order to save the traditional club, the city decided in 2003 to buy the stadium from the club. Kaiserslautern founded the Fritz Walter Stadium Company and took out a loan of 65 million euros, for which the city guaranteed 100 percent. The state of Rhineland-Palatinate under Minister President Kurt Beck also supported the project.

Klaus Weichel, Lord Mayor

To terminate the contract prematurely would be hara-kiri

In return, the Red Devils were to lease the stadium for 3.2 million euros per year, which covered the interest on the loan and the stadium company’s expenses. But this agreement did not last long. In the year of the World Cup, things also went downhill in sporting terms. With its relegation to the Second League, 1. FC Kaiserslautern’s revenues plummeted. The stadium company reacted and waived a total of 5.3 million euros in lease payments to FCK between 20, according to documents from the stadium company.

After a brief interim high with a return to the top flight, the traditional club experienced a sporting downturn. FCK was no longer fighting for promotion to the First Division, but against relegation to the third division, and a new lease agreement was negotiated. Since 2014, the club has paid only €2.4 million per season in the Second Division.

"Without its emotional significance for the region, FCK would probably not have received any aid from the city and would therefore have long been insolvent," Rene Quante is certain. The managing director of the Taxpayers’ Association in Rhineland-Palatinate criticizes the fact that the rent reduction is counter-financed with 800,000 euros per season from taxpayers’ money.

The state also pays

"What is the alternative? Rene Quante doesn’t give me any alternatives either. To terminate the contract prematurely would be hara-kiri," counters Mayor Weichel, who is also chairman of the stadium company. As the documents show, the stadium company cannot repay the loan before 2036 without having to pay an additional 35 million euros as an early repayment penalty. "We would then have 10 days to repay the loan. 102 million euros. That would be a third of the budget," Weichel said.

When asked, the city could not answer how much tax money has already flowed into the stadium company. In the event of FCK’s relegation to the Third League, the amount would increase from 800,000 euros per season to 2.8 million euros, according to current plans. But this arrangement is to be temporary and limited to two years. In addition to the lease of 425,000 euros in league three, FCK is to pay an extra 100,000 euros should at least 19,000 spectators come to the stadium on average.

For FCK, the stadium is a competitive disadvantage, the chairman of the club’s supervisory board, Patrick Banf, informed the taz in writing when asked. Rene Quante of the Taxpayers’ Association sees things differently: "Rhineland-Palatinate, Kaiserslautern and FCK wanted the World Cup, everyone wanted the enlarged stadium. But FCK is solely responsible for its sporting performance, the threat of relegation and the resulting problems."

For the future, 1. FC Kaiserslautern wants to position itself better. Supervisory Board Chairman Patrick Banf explained that the club began implementing a restructuring concept in the spring of 2016, and as a result they have reduced personnel costs in administration by almost 25 percent. In addition, the club is preparing to spin off the professional department in order to be able to finance itself in the long term through equity.

Last chance: spin-off of the professional division

Everyone involved is hoping for the success of this spin-off. "We could at least live with it if shares in the newly founded corporation go to the city in order to get compensation for a temporary lease reduction," says Rene Quante of the Taxpayers’ Association.

Lord Mayor Klaus Weichel is also hoping for success: "I’m counting on the investor who wants to get on board with FCK now. Then we might already have a new situation in a year and then we would also sell the stadium." But already in 2019 the next problem could come to FCK. Then the more than 6 million euros from the so-called "Betze bond", which fans subscribed to years ago, will fall due. However, the club has already "initiated refinancing measures" for this, according to Supervisory Board Chairman Patrick Banf.

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