Risk management

Borussia Dortmund's divisions are exposed to a wide variety of risks that are inseparably linked to the conduct of business.

The sections below focus on possible future developments or events which could cause Borussia Dortmund to perform either better than expected (opportunities) or worse than expected (risks). The respective impact of opportunities and risks are generally presented separately and are not offset against one other. Generally speaking, risks and opportunities are assessed over a mid-length term of two years. All risks of loss to which the Company is exposed (individual and cumulative risks) are monitored and managed within the risk management system.

The consolidated group for risk management purposes is identical to the consolidated group in the consolidated financial statements

A functioning control and monitoring system is essential for identifying risks early and for assessing and counteracting them. It is the responsibility of the internal risk management system to monitor and control such potential risks.

The risk management system is based on principles and guidelines laid out by the management. These principles and guidelines are designed to facilitate the early identification of any irregularities so that appropriate countermeasures can be taken immediately. In order to ensure the highest possible level of transparency, risk management has been incorporated into the organisational structure of the Group as a whole. All departments and divisions are required to immediately report any market-relevant changes in the risk portfolio to the management. The risk management system is also an integral component of the overarching planning, steering and reporting process.

The currency and detail of the regular risk reports given to the governing bodies of Borussia Dortmund keep them informed of the Group's current risk profile.

This ensures that the Company's decision-makers have adequate flexibility to be able to monitor and manage risks.

This year, the risk inventory procedure implemented with the objective of cataloguing and assessing all risks has again proven effective as a management tool. Risks are identified, discussed and reviewed in consideration of current circumstances in one-on-one meetings or plenary sessions in order to assess the current likelihood of their occurring and their potential consequences.

Each risk is given a qualitative rating of between 1 and 4, with 1 indicating a low level of risk and 4 indicating a very high level of risk.

A risk impact assessment is carried out both before and after the identification and development of countermeasures to reduce the risk. The risk impact assessments are weighted before and after countermeasures based on a ratio of 1:2, with weighting prioritising the probability and consequences of each risk after countermeasures take effect. In mathematical terms, the risk impact assessment (before countermeasures) is derived by adding the probability of the risk and its consequences before countermeasures, while the assessment (after countermeasures) is derived by adding the probability of the risk and its consequences, and multiplying this figure by two.


Before countermeasures


























After countermeasures


























If the assessment of an individual risk falls within the top third of the scale (a score of 17 to 24), Borussia Dortmund classifies it as a high-priority risk. Particular attention is paid to such risks, since they are capable of having a material adverse and long-term effect on the Company's assets, liabilities, financial position and profit or loss. There are currently 23 (previous year: 19) risks that are classified as high priority.

The currency and detail of the regular risk reports given to the governing bodies of Borussia Dortmund keep them informed of the Group's current risk profile.

This ensures that the Company's decision-makers have adequate flexibility to be able to monitor and manage risks.

Categorisation of risks

In accordance with the recommendations under German Accounting Standard DRS 20, and to ensure ease of reference, Borussia Dortmund divides its risks into main categories. The nine defined main categories (strategic risk, personnel risk, macroeconomic risk, competitive risk, liquidity risk, interest rate risk, credit risk, resources risk and ecological risk) are presented and explained in greater detail below.

All 62 risks that could have a direct impact on the Company fall within these categories. In addition to the 61 risks in the previous year, one new risk was added.

Five new risks (change in income from TV marketing, bad debts due to insolvency, maintaining liquidity, interruptions to match operations, and outbreak of epidemics/pandemics) were added to the 19 risks that had been classified as high-priority in the past period. After reassessing the risk of being relegated, this risk is no longer classified as a high-priority risk. No risks were removed.

Further to the notes on opportunities and risks in the 2018/2019 Annual Report, the focus during the current reporting period (financial year 2019/2020) was primarily on the impact of the COVID-19 pandemic.

In addition to the health risks and the obligation to protect the health of the employees, the strict regulations and restrictions on public life imposed by the federal and state governments have severely impacted the global economy, including the football sector and with it Borussia Dortmund. Therefore, Borussia Dortmund has classified the outbreak of epidemics/pandemics as a new, stand-alone high-priority risk. Previously, this risk was included in the risk of interruptions to match operations. This is no longer appropriate given the risk's profound impact and it has therefore been classified as a stand-alone individual risk.

The high-priority risk of an outbreak of epidemics/pandemics also greatly affects nearly all of the existing risk categories, primarily:

  • Strategic risk
  • Personnel risk
  • Competitive risk
  • Macroeconomic risk
  • Liquidity risk

The following is a discussion of the 23 high-priority risks in their respective categories.

Category 1 – Strategic risk

We define strategic risk as risk arising from incorrect business decisions, poor implementation of decisions or the inability to adapt to changes in the corporate environment. Strategic risk also arises from unexpected changes in market conditions and the environment in which the Company operates, which bring with them negative consequences for the Company's assets, liabilities, financial position and profit or loss.

This category includes three high-priority risks:

The risk that financial planning is dependent on sporting success describes the risk that failing to achieve planned sporting objectives could led to a lack of adequate income or proceeds. To account for any and all developments both on and off the pitch, the Company revises and updates its longstanding financial and liquidity planning at least three times per year based on the latest premises. In addition to the income statement and the statement of financial position, this also includes the development of Borussia Dortmund's liquidity. It allows the management to monitor the current and future financial position of the Company at all times and to take any necessary action. Due to developments with regard to income from international TV marketing in particular, the amount that a club is certain to receive for a given subsequent season varies greatly from a second-place finish to a seventh-place finish in the Bundesliga. Qualifying for the UEFA Champions League guarantees much higher proceeds than qualifying for the UEFA Europa League, let alone if the team fails to qualify for any international competition at all. The objective of a corresponding worst case scenario is not to predict the future but rather to provide an overview of various contingencies and their effects and to better assist the management in its strategic planning.

Share price performance describes the performance of a security, an index, shares or a portfolio, but also the performance of the management of an investment fund with respect to its investment objectives. The Group is very conscious of the risk associated with the performance of Borussia Dortmund's shares and continually analyses the Company's value on the capital market and the consequences of it being undervalued. A key component of this risk is the impact of these factors on potential corporate action in the future and the Company's appeal to business partners. This risk is countered through continual communication with the capital market. The shares have been listed on the Prime Standard segment of the Frankfurt Stock Exchange since May 2014 and are also admitted to trading on the SDAX. During the current financial year, Borussia Dortmund again held several roadshows in Europe and the United States, either on site or via conference call on account of the COVID-19 pandemic, in an effort to keep existing investors up to date and bring any prospective investors on board.

Borussia Dortmund considers the third risk in this category to be the risk of conflicting goals of sporting and commercial success. It is important that Borussia Dortmund continues to pursue balanced business policies with the aim of ensuring that the club remains competitive and also focussed on meeting the Group's performance indicators. Borussia Dortmund will continue to avoid financial risks that could arise on account of uncertain sporting successes. As in previous years, Borussia Dortmund further counters this risk by setting strict budgets for the individual divisions and undertaking corporate planning on a revolving basis using various planning scenarios. Furthermore, the Company also uses planning scenarios to calculate various earnings and liquidity effects potentially presenting additional opportunities for financial investment or shortfalls. Balancing the need to remain competitive on the pitch with the need for economic stability and success, while simultaneously taking into account the corresponding countermeasures that have already been taken to reduce the likelihood of the risk from occurring, is of fundamental importance, especially in exceptional circumstances such as the current COVID-19 crisis. Various planning scenarios were calculated specifically during the COVID-19 crisis. The conclusion of long-term, strategic, and in some cases new agreements with Evonik Industries AG (primary sponsor) and the new second primary sponsor 1&1, PUMA International Sports Marketing B.V. (new agreement until 2028), SIGNAL IDUNA Krankenversicherung a. G. and Opel Automobile GmbH ensures planning security and continuity.

Category 2 – Personnel risk

The importance of human resources to companies is growing. The Company's success is largely dependent on the commitment, motivation and skills of both its sporting personnel and managerial/administrative staff.

This category currently includes three high-priority risks:

Protecting confidential information is a subject that remains in the public eye. Never before has data protection posed so many challenges. In particular, the increasing internationalisation of day-to-day business operations necessitates a detailed understanding of the respective data protection regulations applicable in individual countries. In addition, technical progress harbours many pitfalls, especially in relation to online data. Hackers stepped up their attacks in recent years, releasing the personal data of politicians, celebrities and others. Action has to be taken to prevent the unauthorised access and manipulation of data. Confidential data that is processed, transferred or stored online must be encrypted. The data should remain encrypted and protected even if the online application is compromised. The IT security officers, the heads of the individual application areas and the data protection officers are responsible for initiating the data; the developers and administrators are responsible for implementation.

An external service provider was engaged to raise employee awareness of data protection issues and to prevent potential violations.

The risk of periods during which professional players are unable to play (rest periods) can have a major impact on the Company's success, because they mean that team managers are unable to play the best possible team for the entire season, putting sporting goals in jeopardy. The absence of key players in particular is often difficult to compensate for. The reasons for rest periods include personal match bans, injury, excessive stress or a COVID-19 virus infection. The systematic implementation of DFL's hygiene concept minimises the risk that the professional squad and the coaching and support staff will contract the COVID-19 virus. We deliberately ensure that back-ups are available for every position within the squad so that we can absorb the absence of any individual player.

There continues to be a risk of travel and other accidents and terrorist attacks in the world of sport; therefore, Borussia Dortmund continues to classify this risk as high priority.

Category 3 – Macroeconomic risk

Macroeconomic risk arises as a result of Borussia Dortmund's dependence on general economic and political developments.

There are currently six high-priority risks that fall under macroeconomic risks:

Previously, the risk of an outbreak of epidemics/pandemics was included in the risk of interruptions to match operations. In order to account for the gravity of the risk, the risk of an outbreak of epidemics/pandemics was classified as a new, stand-alone high-priority risk.

An epidemic is when a disease spreads unusually quickly in a certain region in a short period of time. A pandemic is an epidemic that spreads beyond the borders of a particular country or even continent.

Aside from the health consequences, the COVID-19 crisis has thus far particularly impacted Borussia Dortmund's streams of revenue. This year's income from TV marketing was lower than budgeted. Approximately EUR 4.4 billion in total will be distributed to the clubs in the first and second Bundesliga divisions over the course of the next four seasons (2021/2022–2024/2025), provided match operations will be held. In addition to the losses with respect to TV marketing, no income was generated from ticket sales for the remaining five home matches after match operations were resumed, and any income already received from season or match day tickets was refunded. The same applied to any VIP/hospitality income. At this time it is not yet clear when income will again be generated from ticket sales in the coming season. Due to the lack of match operations and the closure of SIGNAL IDUNA PARK, the income from catering on match days and from stadium tours and events was completely eliminated; this also temporarily affected the sales at the fan shops. The COVID-19 crisis, and the matches played behind closed doors as a result, have also led to declining proceeds from sponsors. Due to the economic slump, it may be difficult to adequately replace all of the advertising agreements that are set to expire. Consequently, advertising income is expected to be lower in the coming season. In line with the tense global economic situation, the transfer market will (probably) also cool off. While Borussia Dortmund cannot rule out that transfer proceeds for players will (temporarily) decline in coming transfer windows, it still expects opportunities to obtain high transfer proceeds for players in individual cases.

Borussia Dortmund has classified unfavourable macroeconomic developments, particularly high unemployment and slow economic growth or an economic downturn, as a further risk in this category.

In light of the severe effects of the COVID-19 pandemic, the Hamburg Institute of International Economics (HWWI) has revised its 2020/2021 economic forecast for Germany. The entire global economy will be severely impacted by the crisis. The German economy has slipped into a deep recession as restrictions were placed on global economic relationships and protective measures enforced in Germany. Economic activity in many industries and sectors was severely curbed or even brought to a standstill in the spring. How quickly the economy will recover depends in particular on the further course of the pandemic.

The risk of right-wing extremism is a societal risk that continues to increase. Borussia Dortmund continues to stand firmly against right-wing extremism and discrimination. Borussia Dortmund counters this risk through prevention efforts and disciplinary action, acting in concert with a broad network of cooperation partners. By clearly speaking out against racism and discrimination as well as by working to combat right-wing attitudes and hate speech and to ensure that the lessons of the past are never forgotten, Borussia Dortmund will continue to fulfil its social responsibility by ensuring that the atmosphere in and outside the stadium is welcoming, cosmopolitan and diverse.

The increased willingness of certain individuals to commit violence and defame and insult others at stadiums is a risk that will continue to require the utmost attention. Fan violence remained an important issue during reporting period.

Prevention efforts and security plans ensured that potentially violent groups were identified in advance, helping to prevent altercations to the greatest extent possible. Borussia Dortmund will continue to counter this risk with enhanced security checks, camera surveillance, stadium bans and criminal complaints. Additional stadium safety measures will continue to include specific structural changes to entrances going forward.

In connection with the dispute about who should cover the costs of providing security at home matches, the clubs of the first and second Bundesliga divisions voted on 3 December 2019 that the costs incurred by the Bremen police should be borne in full by SV Werder Bremen. The clubs also resolved that SV Werder Bremen could defer a partial amount of 50% until a final ruling on the legal dispute was issued by the Federal Constitutional Court, and to reject a fund model of any kind.

Passing these costs on to the Bundesliga clubs would present an earnings and liquidity risk for those clubs, Borussia Dortmund included.

The categorisation of social media activities as a high-priority risk reflects the fact that new technologies not only have potential for development, but also harbour risk potential.

Social media is no longer used solely for communicating with fans and followers, but increasingly also serves as an advertising platform for marketing and sponsoring-related activities.

In order to safeguard the Company's image and prevent the unauthorised disclosure of internal information, all Borussia Dortmund employees must adhere to the Company's social media guidelines.

Category 4 – Competitive risk

Competitive risk relates to factors stemming from competition in the domestic and international professional football business.

Borussia Dortmund last played in the second Bundesliga division between 1972 and 1976. The most recent time Borussia Dortmund was stuck in the relegation zone was during the winter break of the 2014/2015 season. Without exception, Borussia Dortmund has qualified for international cup competitions every year since the 2009/2010 season.

Consequently, the risk of being relegated to the second Bundesliga is no longer classified as a high-priority risk.

This category includes seven high-priority risks:

Interruptions to match operations can have immense economic ramifications because nearly all of Borussia Dortmund's streams of revenue are dependent on or influenced by match operations. Accordingly, this risk is now classified as a high-priority risk. The temporary suspension of match operations due to the COVID-19 pandemic during the 2019/2020 season has underscored how economically dependent the club is on a trouble-free season. The 2019/2020 season was completed thanks to the systematic implementation of DFL's hygiene concept.

The change in income from TV marketing has also been classified as a new high-priority risk in the wake of the COVID-19 crisis. After DFL Deutsche Fußball Liga's auctions for TV rights led to a steady rise in income from TV marketing in recent years, the COVID-19 crisis meant that this year's auction for the 2021/2022 to 2024/2025 seasons did not bring as much income for the clubs of the first and second Bundesliga divisions as in previous rights periods; in total, EUR 4.4 billion will be distributed in the coming four years.

Since the future instalments of TV marketing income to be paid by DFL Deutsche Fußball Liga to the clubs depend on how the COVID-19 pandemic develops and whether the clubs can continue to play in the coming season, this income, which makes up a significant share of revenue, is subject to uncertainty.

According to UEFA, Financial Fair Play is about improving the overall financial health of European club football. The regulations first entered into force in 2011 and serve as a catalogue of measures for clubs competing in UEFA's international club competitions. Clubs in breach of the regulations face penalties up to and including bans. In practice, Financial Fair Play governs the ratio of revenue to expenditures. The risk of failing to comply with the Financial Fair Play rules and potential exclusion from international competitions or potential financial sanctions would have serious financial consequences for Borussia Dortmund. The distribution amounts from UEFA's TV marketing agreement that went into force in the 2018/2019 season, underscores the importance of both qualifying and obtaining the requisite licences for international club competitions. To minimise this risk therefore, compliance with the relevant requirements and target/actual comparisons are constantly reviewed. Several European clubs have already been disciplined and banned from international competitions for violating Financial Fair Play rules. In connection with the COVID-19 crisis, UEFA relaxed several of its rules governing licensed players for its club competitions in the 2020/2021 season.

As past experience has demonstrated, the risk of key players switching clubs can materialise at any time at Borussia Dortmund. The departure of key players who are part of the club's future plans would not only weaken the team at certain positions, but also as a whole. Even if success rarely rests on the shoulders of any single player, any unexpected departures would leave holes in the roster that would need to be filled at short notice with players of equal quality. In an attempt to mitigate the sporting consequences of key players switching clubs, Borussia Dortmund plans its roster well in advance, including by binding players to long-term contracts, uses its high transfer proceeds to reinvest in the squad and employs a wide network of scouts.

The further risk in this category is the risk of a potential stadium catastrophe. Stadium catastrophes can include fire, stampedes, potential terrorist attacks or other acts of violence. Going forward, the Company will continue to regularly assess the quality and reliability of security staff and specifically train them in the prevention of catastrophes. Structural improvements to SIGNAL IDUNA PARK for the purposes of enhancing security, safeguarding and monitoring the access roads, and safeguarding the property during visits on non-match days are just some of the countermeasures currently being implemented by the club's Security department to provide security at the stadium.

Borussia Dortmund uses the summer break each year to invest in SIGNAL IDUNA PARK as well as for construction work and refurbishments. The stadium has been expanded three times since opening in 1974 with a capacity of 54,000. The continual repair and maintenance work – the paramount focus of which is always structural integrity and safety – ensures that the stadium meets the latest standards in terms of safety, security and comfort. Compared to many other Bundesliga stadiums that were constructed for the 2006 World Cup, SIGNAL IDUNA PARK is one of the league's oldest stadiums in use. Given that Borussia Dortmund regularly invests large sums in SIGNAL IDUNA PARK and in light of the increasing requirements applicable to stadiums, including with respect to spectator safety, the club has classified capital expenditures needed for SIGNAL IDUNA PARK as a high-priority risk.

The risk of consequential damage arising from mining, which also affects SIGNAL IDUNA PARK, represents another high-priority risk. Coal mining has ceased in Germany. While the memories remain, so do the pitfalls, because the effects of mining never fully disappear. Hardly any other federal state is faced with as many sinkholes as North Rhine-Westphalia. The state has some 60,000 abandoned mining shafts and tunnels. The exact number is not known because mining in the region dates back to the Middle Ages. Only half of all pits and tunnels have been recorded.

Borussia Dortmund uses the properties adjacent to SIGNAL IDUNA PARK for car parks or to store products and equipment needed for match operations. The southwest container and logistics area is located on land with uncertain topography, which is why sinkholes and similar subsidence cannot be ruled out. An external service provider was recently engaged to determine to what extent geogrids (instead of fill dirt) could possibly be used to sufficiently reinforce the areas in question. Geogrids help among other things to stabilise the subsoil during construction. They reinforce loose mineral layers such as sand and soil. Geogrids distribute static loads across a large area of the subsoil. The aim is to increase or establish load-bearing capacity and to prevent significant subsidence at isolated points without the need for costly and time-consuming efforts to replace the soil with materials with higher load-bearing capacities.

Category 5 – Liquidity risk

Liquidity risks include all risks in connection with cash flows and financial burdens.

This category includes four high-priority risks:

The loss of significant financial backers and sponsors due to insolvency could also have a material adverse effect on Borussia Dortmund's liquidity in the future. Greater attention is being placed on the potential loss of significant financial backers and sponsors and the introduction of corresponding countermeasures precisely because of the current COVID-19 crisis and the associated adverse economic consequences for the German and global economy. Borussia Dortmund continuously revises its longstanding accounts receivable management system in line with the prevailing conditions and increasing globalisation. The club also reviewed and implemented other risk mitigation measures such as introducing upfront payments or changing payment terms. Borussia Dortmund is also in close contact with its customers and its sponsoring marketing firm SPORTFIVE Germany GmbH.

At present, it is difficult to forecast and remains to be seen how open companies will be to becoming sponsors in the near term during and after the COVID-19 crisis.

In the wake of the COVID-19 crisis, the risk of bad debts due to insolvency has been classified as a new high-priority risk.

Economists expect that the COVID-19 crisis will lead to one of the sharpest economic declines in Germany and the world in the post-war era. This will also impact the solvency of companies and football clubs alike. Borussia Dortmund anticipates that problems could arise with regard to transfer receivables. The primary objective continues to be keeping bad debts to a minimum and to ensure that the Company has the liquidity it needs at all times. That is why following through on action already taken is all the more important. Dunning procedures are particularly vital in this respect. Furthermore, additional action was taken to ensure liquidity and counter any potential bad debts.

Borussia Dortmund places utmost importance on maintaining its liquidity and, after reassessing its risks following the outbreak of the COVID-19 pandemic, has therefore classified the risk associated with this as another high-priority risk. The financial and liquidity planning apparatus that has been in place for many years considers a variety of scenarios and different premises, and is regularly adjusted to account for current conditions. A wide variety of scenarios were calculated, particularly during the course of the COVID-19 pandemic, to identify any liquidity bottlenecks early and to initiate appropriate countermeasures designed to secure liquidity.

In order to keep the risk associated with the volume of player salaries as low as possible, the club budgets personnel expenses with transfer deals in mind at the beginning of each season. The primary focus is on the fixed components of the players' remuneration, since these are independent of the team's performance during a given season. Variable remuneration components are also considered when planning the budget, but generally only apply once certain sporting objectives are achieved that in turn generate additional income. The personnel expenses incurred are continuously monitored, extrapolated on the basis of current circumstances, and reported to the management.

The Group is not presently exposed to any high-priority risks in the interest rate risk, credit risk, resources risk and ecological risk categories.

DFB cup 2nd round / 30.10.2019

BVB - Bor. M’gladbach 2:1

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