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37. Bull, Bear & Beyond – Borussia Dortmund executive interview Match operations image

37. Bull, Bear & Beyond – Borussia Dortmund executive interview Match operations

S1 E37 · Bull, Bear & Beyond by Edison Group
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6 Plays1 year ago

In the fourth interview, we focus on the company’s match operations revenue, namely the income from fans attending matches. Although it is Borussia Dortmund’s smallest revenue stream, at c 10% of the group total in FY24, attendance drives other revenues such as from merchandising and catering. We discuss the club’s enigmatic stadium, the fan-friendly philosophy on ticket prices and the investment requirements for the stadium.

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About ‘Bull, Bear & Beyond’

Bull, Bear & Beyond': features candid conversations with senior executives and from our own team of experts from across industries, exploring strategy, innovation, and the opportunities shaping their markets and 60-second pieces are a compressed summary of content designed to convey our message in a single, easily shareable hit.

About Edison:

Edison is a content-led IR business. We believe quality investment content should inform all investors, not just brokers. Our mission: engage and build bigger, better-informed investor audiences for our clients.

Edison covers 50+ investment trusts, read about them here: https://www.edisongroup.com/equities/investment-companies/

Original interview published on 16/12/2024 and reposted as a podcast

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Transcript

Revenue Streams of the Club

00:00:07
Speaker
so So match operations revenue, Thomas, is about 10% of the total. But obviously, ah people coming to the grounds feeds other revenues, such as merchandising, drinks and that kind of thing, which is another 20% of

Importance of the Stadium to the Club

00:00:19
Speaker
revenue. So perhaps the most important thing we we talk about, first of all, is the stadium itself. It's it's a big asset a lot of of some of the viewers may not be familiar with. the the scale, the importance of the stadium. So could you just put the the stadium's size and the atmosphere in some kind of context please? a lot The stadium, if it's full, 81,000 people attending the match for Pursa Dortmund, which is an outstanding atmosphere. You have the stand tribune, the Faust tribune, where 25,000 people are standing and yelling and waving their fans. And this atmosphere is unique unique in Europe and someone said it's the most beautiful stadium of the world and for me it's it's an expression of the atmosphere of our brand, of of the
00:01:12
Speaker
the emotional ability of the brand, of course, the intensity of the Borussia Dortmund brand, which is transmitted all over the world to 200 countries.

Ticketing Strategy and Fan Engagement

00:01:22
Speaker
And this is where is the best ah what you can do for our brand to show the atmosphere, that great atmosphere in that stadium all over the world.
00:01:36
Speaker
This is our stadium. This stadium fills 81,000 every match. Nearly every match is sold out, only if the opponent do not does not come with sufficient support, it's a bit lower, but normally it is sold rule out.
00:01:52
Speaker
We sell 55,000 season tickets. We could sell it out with season and tickets, but we don't. We want to give other people the possibility to get in that stadium, to feel the atmosphere, and to be future fans Boosterdorbrich.
00:02:08
Speaker
Thomas, German football clubs have a good reputation of being considerate to their football fans and you know not ah charging them too high a price for their ticket. So could you talk about that philosophy of not exploiting your fans from a ticket price perspective? Yes, I always get some crazy faces if I go to Britain when they hear our prices because ah British clubs try to squeeze out the lemons to the last drop.
00:02:38
Speaker
mean they want to get the money they can get from their fans. And we understand our fans as our fan base. And the fan base is the the basis of our brand and of our future development.
00:02:52
Speaker
We believe we should capitalize our brand, our fans, not and by grabbing their own wallets. It's more to have them in the stadium, to attract Borussia Dortmund to them, to have a marvelous atmosphere and then ask sponsors, broadcasters to pay for that possibility to reach those people.

Economics of Ticket Pricing

00:03:17
Speaker
And for that reason, we believe that accessible prices to a football stadium, to football match in the Bundesliga is key for the future development. We and i have nowadays about 50 million more or less depending on how far we go in which competition as match operations revenue.
00:03:39
Speaker
And this is 10% of our revenues. But if I increase the prices substantially, I risk that atmosphere of the stadium which is marvelous and transmitted all over the world.
00:03:52
Speaker
And I would risk that I change the audience in the stadiums or i haven't I would not have necessarily full that stadium. And this is not about the rest Dortmund because our basis, economic and emotional wise, is the fan base.
00:04:09
Speaker
which is a mass of people following Borussia Dortmund. And this is a value we have to have, take care about it. And that's the reason why we have that ticket price ah policy.

Stadium Investments and Upgrades

00:04:23
Speaker
So Thomas, you've said you've said there that the stadium is a very important asset. So could you talk about the investment requirements the stadium, given it's such a good stadium?
00:04:32
Speaker
Well, we have to invest every year something in the stadium. The last season we built a new catering tower to have all the catering infrastructure new because it was from the 90s. In the next 12 months we to invest on the roof.
00:04:50
Speaker
There will be no ah ah new solar panels. because also Borussia Dortmund have to look at CSG and for that reason we invest in our own new roof panel system where we can realize 40 percent of our energy needed in the stadium from our own solar panels which is very important And what we usually have to invest all every second year you know in the VIP hospitality area in new to your country here merchandising and in your event catering, a ho earth counters.
00:05:28
Speaker
There's always a couple of means you have to invest in the stadium every year to have it good in shape, which is important.