Hertha BSC’s professional license is under pressure. The Berlin club was relegated from the Bundesliga on Saturday and is struggling with significant financial deficits. Hertha has to do everything in the coming weeks to keep the professional license and has already started creative accounting.
Hertha BSC competes for professional license and starts creative accounting
According to Kicker, there are two clubs where the professional license in Germany is seriously at risk: Nürnberg and Hertha BSC. The Deutsche Fussball Liga (DFL) has taken a close look at the financial house. Hertha was already not very prosperous and had to reduce the player budget by thirty percent anyway and due to the relegation that will even be fifty percent.
Deferred loan
Last season, the club’s personnel costs had already risen to a record level of 97.7 million euros. Partly because of this, the club is facing a deficit of 65 million euros this season. To close that shortfall, Hertha has decided to perform an accounting trick. In a press release, Die Alte Dame announced that it would extend a bond loan that the club took out in 2018 by two years.
It concerns a loan of forty million euros, which should initially be paid off on June 19, 2023. However, Hertha has negotiated that the loan will run for another two years. On the other hand, the interest rate will go from 6.5 to 8.5 percent, which means that the club will ultimately be more expensive, but will have some air in the short term.
More money needed
However, that is still not enough to secure the license. Hertha still has to close a liquidity shortfall of twenty million euros from the DFL, Kicker reports. Behind the scenes, the club is in full discussion with main sponsor Nike and marketer Sportfive about the possibilities. The deadline for submitting an appropriate plan to the DFL is June 7.
In the Second Bundesliga, there are nine other clubs that still have to make minor adjustments to get the license done. These are Arminia Bielefeld, 1. FC Heidenheim, Holstein Kiel, Hansa Rostock, Fortuna Düsseldorf, SV Sandhausen, 1. FC Kaiserslautern, Jahn Regensburg and Eintracht Braunschweig. Their license, on the other hand, is not compromised.
