Thomas Tress, Chief Financial Officer of Borussia Dortmund, sheds some light on the club's partnership with Johor Darul Ta'zim (JDT) and talks about club management...
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Borussia Dortmund confirmed their partnership with JDT last year. How did it begin in the first place?
It was through one of our former players, Dedé, whom JDT got in touch with. Due to our reputation in producing good players, they were interested to cooperate with Dortmund on their youth development project.
So, how does the partnership work?
We have agreed to a one-year deal with JDT, which will see us send our youth coaches in Germany to Malaysia to assist them. Our coaches will help them understand how professional football clubs in Europe are being run, so that they can learn and replicate it in Malaysia.
The partnership seems to be very beneficial to JDT, but what about Dortmund? What do the club get in return?
In terms of brand growth and awareness, it is an important partnership for us. Through this partnership, Dortmund will be able to get more awareness in Asia, which is a very crucial market for us because the popularity of Dortmund and the Bundesliga [outside Germany] are higher here than in any other part of the world.
Besides Dortmund and a few German clubs, not many actually promote themselves outside the country. What do you think?
I guess that some of them are not that developed with respect to their management and international understanding of business. Many clubs are not aware of the importance of going international and getting more awareness. We have seen what has happened, for example, in England and to the Premier League clubs after they spread their awareness in Asia. Compared to them, there is still a long way to go for the Bundesliga.
10 years ago, when the new Dortmund management just started, my colleagues and I faced a situation where we had huge fixed-rate bonds and a lot of financial liabilities. Hence, we had to develop new strategies to grow in revenues and profitability, and get rid of those high financial burdens. The German market alone does not give us the possibility to have that growth, so we decided to venture into the international scene. Now we have about €260 million in revenues and, financially, we are second in Germany after Bayern Munich.
Speaking of that, Dortmund have successfully bounced back from being on the brink of bankruptcy to become bigger and more successful than ever. What’s the secret?
There is no secret, really. We have merely applied economic principles and knowledge of the 21st century to our club. To run a club professionally, it’s not just a question about cutting down the costs but also on how to increase the revenues. So, we have strategies in place to move the club forward. We have renegotiated with our bank to prolong our credit line, bought back our stadium to cut down the rent, invested in our youth academy, and executed various marketing plans. All these things we have done so far are just small stones to build a new building.
As we all know, the tickets to Dortmund games are quite affordable. Have the club never thought of increasing the prices?
For the record, just 15% of our total revenues are from the ticket sales. It is low, but we believe it is not recommended to have a high increase in our ticket prices because it will change the atmosphere in the stadium, which is outstanding. Our South Stand is well known all around the world for having 25,000 supporters standing and yelling to inspire the team to success, and we want to maintain that atmosphere. If we increase the prices to match those in the Premier League, it will affect our crowd attendance. That is not Borussia Dortmund. We are very grounded and love being loved by our fans. We have to accept and respect them, which is why we will not increase our ticket prices to the Premier League level.
Just like Dortmund, JDT also have one the most affordable ticket prices in Malaysian top-flight football. However, they haven’t been doing too well in terms of ticket sales. What are they missing?
It is something that needs time and patience. If JDT continue to maintain their low ticket prices and achieve success, the crowd will definitely come to the stadium. Furthermore, their tickets might be relatively cheap, but we still need to factor in, for instance, the income level of the crowd, who might not be able to afford it.
Lastly, what’s your impression of the Southern Tigers so far?
I have not had the opportunity to get to know more about the club yet, but I know they are a very ambitious side. [Having been just rebranded] they do not have much history yet, but they have a big ambition to grow. With the support of the Crown Prince of Johor, I think they can do well.