Schalke 04 Might be Forced to Sell Their LEC Spot
According to a new report by L’equipe, Schalke 04 — one of the ten permanent partners in the LEC — might be forced to sell their franchised spot. The reason is simple: financial instability. Now, just writing such a thing makes one feel strange because, well, this is Schalke 04 we’re talking about. They’re a household name in traditional sports, and a mainstay in the German Bundesliga. They’re not some esoteric team from the little leagues, so no one’s really expecting them to struggle much when it comes to economics.
But looks can be deceiving, and especially so in today’s pandemic-stricken world. Having a logo that’s recognized by half the planet goes a long way, but it doesn’t mean all that much if your team isn’t winning — and Schalke definitely hasn’t been getting their “hands raised” recently. Their current Bundesliga record is dreadful in every sense of the word, and the fact that they owe more than $250 million in debt doesn’t help either, to say the least. As if all of that wasn’t enough, the current COVID-19 pandemic has left a gaping hole in everyone’s budget, and traditional sports undoubtedly took an even bigger hit than esports. Heck, it’s not even comparable.
And that obscene amount of debt? That was around the start of the pandemic. A lot of time has passed since, so it’s only natural to assume that their fiscal troubles became even bigger.
Cost Cutting Measures
Right now, the outlook isn’t all that bright for Schalke 04′ stay in the LEC. According to L’equipe, they might be forced to sell their spot in the near future if they don’t manage to stabilize and correct course. If they do end up selling their franchised spot, they’re projected to recoup around €20 million which, to be fair, is nothing to scoff at.
Esports might be the next big thing, but it’s just not all that profitable right now, and for struggling mid-tier contenders like Schalke, the days of financial stability (let alone profit) are still a ways off for their League of Legends team. We certainly hope it won’t come to such drastic measures, but it makes sense for Schalke to sell their esports division in order to cover a bit of their debt. The org has released a statement confirming that they’re exploring all possible options and have not come to a decision just yet.
In any case, we’ll keep you updated as the situation develops!