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 three years. All risks of loss to which the Company is exposed (individual and cumulative risks) are monitored and managed within the risk management system. Borussia Dortmund assessed the identified opportunities with respect to their impact on budgeted earnings figures in the context of existing planning and reporting processes. Opportunities are considered and documented in a process that is independent of Borussia Dortmund’s 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 Company-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.

In financial year 2021/2022, refinements were made to Borussia Dortmund’s risk management system as part of IDW AuS 340 (revised version), the newly revised standard for audits of the risk early warning system promulgated by the Institute of Public Auditors in Germany (IDW). These primarily concerned implementing a risk-bearing capacity concept and improving the measurement methods by performing risk quantification including risk aggregation. The existing internal risk policy was expanded and refined to include these aspects.

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. Reports are submitted to management on a quarterly or (depending on urgency) ad hoc basis.

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.

In consultation with the departments and risk owners, 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 28 (previous year: 26) 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.

In the context of applying the amendments to IDW AuS 340 (revised version) to evidence its risk-bearing capacity, Borussia Dortmund has conducted a quantitative assessment of its risks classified as high-priority in the qualitative risk inventory procedure outlined. The expected loss value (net basis) from the risk quantification of risks classified as high-priority was also compared with a threshold value of EUR 1,000 thousand that Borussia Dortmund has defined as material. Risks that – on a solely quantitative basis – may not have a material impact on the net assets, financial position and results of operation may nevertheless be managed and treated as high-priority risks since they are of overriding significance for Borussia Dortmund.

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) as at the end of the reporting period are presented and explained in greater detail below.

All 61 risks that could have a direct impact on the Company fall within these categories. In comparison with the previous year (61 risks), the total number of risks identified was unchanged.

Two new risks (more stringent legal regulations, political developments) were added to the 26 risks that had been classified as high-priority in the past period. No high-priority risks were removed.

Further to the notes on opportunities and risks in the 2020/2021 Annual Report, the focus during the current reporting period (financial year 2021/2022) was primarily on the persistent impact of the COVID-19 pandemic, which continues to impact almost all risk categories, as well as impact of the war in Ukraine that began in the third quarter of the 2021/2022 financial year and comes as a defining crisis for the world and for Germany.

The following is a discussion of the 28 high-priority risks in their respective categories.

In accordance with the amendments to IDW AuS 340 (revised version), Borussia Dortmund has subjected the 28 risks classified as high-priority under the risk inventory to an internal quantitative assessment (assignment of certain probability intervals and calculation of specific losses for every high-priority risk, where possible) so as to evidence Borussia Dortmund’s risk-bearing capacity. Risk-bearing capacity is specified as the maximum level of risk that the Company can bear over time without jeopardising its status as a going concern. For this purpose, the overall risk exposure is compared against available equity and the prevailing liquid assets.

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 four 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. It is all the more important for planning projections to be modified on a permanent basis, especially during the COVID-19 pandemic and the war in Ukraine, when the external conditions are changing faster than ever before. 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 or UEFA Europa Conference League, let alone if the team fails to qualify for any international competition at all. Given this, the goal in the short to medium term is to increase the variability of personnel expenses in the professional squad with regard to sporting performance, particularly in the UEFA competitions and the qualification for these competitions. 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 were also admitted to trading on the SDAX. As a result of the restructuring of the DAX and other indices, Borussia Dortmund left the SDAX with effect as at 20 September 2021. During the current financial year, Borussia Dortmund revised its investor presentation and again held several roadshows in Europe and the United States, either on site or in virtual form on account of the COVID-19 pandemic, in an effort to keep existing investors up to date and bring any prospective investors on board. On 16 September 2021, Borussia Dortmund, with the consent of the Supervisory Board, resolved to increase its capital by means of a rights issue against cash contributions utilising the existing authorised capital. The share capital was increased by EUR 18,396 thousand from its current level of EUR 92,000 thousand to EUR 110,396 thousand by issuing 18,396,220 new no-par value ordinary bearer shares. The issue price per new share amounted to EUR 4.70. The subscription ratio was set at 5:1. Borussia Dortmund generated gross issue proceeds of EUR 86,462 thousand from the capital increase. Borussia Dortmund used the proceeds from the capital increase to repay its financial liabilities. They will also be used to offset any losses arising due to the impact of any as yet unexpected further COVID-19-related measures or restrictions on the Company’s business activities and liquidity fluctuations, and invest in the professional squad. This capital increase by means of a rights issue was successfully implemented and the resulting cash inflow received in October 2021. The capital increase did not change the fundamental shareholder structure, which features a high free float and key strategic partners.

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. It is of fundamental importance to permanently modify the planning projections and to balance the need to remain competitive on the pitch and ensure economic stability and success on the one hand with the corresponding countermeasures that have already been taken to reduce the likelihood of the risk occurring on the other, especially during the COVID-19 pandemic and the war in Ukraine, when the external conditions are changing faster than ever before. The transfer business remains a key action area for Borussia Dortmund and is one of the most important sources of income in the business of football. Achieving high sums for transfers often involves a loss of sporting quality within the squad, but after carefully weighing up all of the athletic and business aspects it is possible that value-driven transfers may also be concluded contrary to the Company’s sporting interests, as was the case this financial year with the transfer of the player Jadon Sancho to Manchester United (see the ad hoc disclosure dated 1 July 2021).

IT cyber risks are the fourth high-priority risk in this category. These risks are closely linked with protecting confidential information. They are generally understood as the risks posed while navigating a digital and interconnected world (cyberspace). In specific terms, on the one hand IT cyber risks involve the possibility of wilful and targeted cyber attacks on data and IT systems. The consequences of these attacks can include: compromising data confidentiality (e.g., data losses, data espionage), loss of system or data integrity (e.g., data corruption by means of malware), compromising IT system or data availability (e.g., internal business interruption, outages in external communications). On the other hand, IT cyber risks arise from the opportunity for large volumes of information to be disseminated widely, cheaply and at breakneck speed (e.g., e-mail campaigns against the Company, calls on social media to boycott the Company) and from social hacking. Cyber criminals are increasingly targeting German businesses, and the number of attacks is increasing dramatically each year. In line with the generally elevated threat situation, Borussia Dortmund is also observing more and more requests from dubious places in the IT landscape (network, firewall, etc.). Borussia Dortmund seeks to counter these IT cyber risks by reducing the risk of occurrence through investments in data security and data protection. That includes expanding the firewall to protect against external attacks, enhancing network security by means of network segmentation and continually pressing ahead with Project Security, a general initiative to identify and address potential security vulnerabilities.

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 five high-priority risks:

Protecting confidential information is also very much so directly connected with IT cyber risks and 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 Head of IT, 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. To meet the increased requirements for cyber security and IT in general, action was taken to significantly increase staffing levels in IT. Although protecting confidential information for the most part concerns the IT landscape as referred to above, it also involves for instance protecting the hard copies of individual employees’ personnel files against unauthorised access by means of a clear key concept, laying down specific rules for post room staff when opening incoming mail, or ensuring that all employees sign a non-disclosure agreement.

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. Excessive stress may arise more frequently going forward, particularly since the coming season will feature a tight schedule of fixtures due to the 2022 World Cup in Qatar (to be held in the winter) and UEFA’s reform of the Champions League, which from the 2024/2025 season onwards will feature ten group matches instead of the previous six, even though Borussia Dortmund seeks to minimise player absences by means of individual workload management based on data analysis. 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.

The world of sport has witnessed a number of terrible accidents in recent years. The tragic loss of human life takes precedence – that goes without saying – but the economic consequences for the businesses involved have also been immense. There thus continues to be a risk of travel and other accidents, terrorist attacks and miscellaneous; therefore, Borussia Dortmund continues to classify this risk as high priority.

The high-priority risk of legal transgressions by professional players covers risks arising from misconduct by the professional squad. This includes doping, placing prohibited bets or inappropriate behaviour on social media. The consequences of such misconduct may include match suspensions and reputational damage for players and the club, or legal disputes. The action that Borussia Dortmund takes to mitigate this risk includes systematic education and preventative measures to raise awareness among the professional squad and help them avoid such misconduct.

The risk resulting from a lack of willingness to transfer is also classified as a high-priority risk. The ongoing impact of the COVID-19 pandemic has caused financial difficulties for many clubs in Germany and around the world. This could increasingly lead to situations in which other clubs are unwilling to meet the salary expectations of players whom Borussia Dortmund intends to transfer, making it difficult for Borussia Dortmund to find a suitable buyer. However, the early termination of the contract with Roman Bürki, which was originally set to run until 30 June 2023, is one example proving that mutual agreement is possible.

Category 3 – macroeconomic risk

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

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

After roughly two years, the COVID-19 pandemic remains ever-present in 2022. The vaccination and booster campaign in Germany is making progress, but not as quickly as the federal government had forecast. The market launch of an inactivated vaccine as an alternative to the existing mRNA vaccines did not meet with the anticipated response among the general public. Approximately 75.9% of people in Germany have received their first vaccine dose, and 59.8% have received two or three doses (data correct as at 7 June 2022). The pandemic continues to affect Borussia Dortmund primarily in match operations and public catering. Borussia Dortmund could at least welcome back an average of approximately 38,000 spectators to matches at SIGNAL IDUNA PARK over the 2021/2022 season in line with the changing Corona Protection Regulations. That said, Borussia Dortmund cannot yet return to the revenue levels seen in the pre-pandemic financial years. The functional health and safety protocol ensured the continuation of match operations with the exception of occasional match postponements, and as such there was never any real threat to the distribution of TV marketing income. Despite the pandemic, Borussia Dortmund never lost its appeal for sponsors, which is reflected in new sponsorship agreements being signed and existing partnerships being extended. However, to be ready for any losses that might arise due to the impact of as yet unexpected further COVID-19-related measures or restrictions on the Company’s business activities and liquidity fluctuations, Borussia Dortmund resolved and successfully implemented a capital increase utilising the existing authorised capital. The Company received the resulting cash inflow at the beginning of October 2021. As was to be expected, the transfer market was somewhat subdued during the transfer periods in the 2021/2022 season. However, high transfer proceeds were generated for players in individual cases. In the case of Borussia Dortmund, this was particularly true with regard to Jadon Sancho’s transfer to Manchester United. As before, Borussia Dortmund factors into its financial and liquidity planning various scenarios and assumptions, in particular various stadium capacities and transfer activities, and regularly adjusts these to account for current conditions. This enables Borussia Dortmund to identify any liquidity bottlenecks early on and take appropriate action to secure liquidity, such as by maintaining suitable overdraft facilities. Borussia Dortmund considers this further confirmation that it was right to establish the outbreak of epidemics/pandemics as a stand-alone and overarching individual risk so as to account for the consequences of the COVID-19 pandemic. Furthermore, this individual risk impacts almost all other existing risks. From Borussia Dortmund’s perspective, society overcoming the pandemic remains the key factor in returning the Company’s revenue and earnings to normal.

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

Given the current crisis, the Hamburg Institute of International Economics (HWWI) has updated its forecast for economic development in Germany. The war in Ukraine, problems with supply chains and inflation have had considerable adverse effects on the German economy. Investments, exports and consumer spending have been weighed by the greater uncertainties, restrictions on trading relations and a drop in real purchasing power. Given these conditions, economic growth of just 1.75% is anticipated for 2022, followed – assuming that the crises gradually ease – by 2.5% for 2023. By contrast, a further escalation poses the risk of recession – for instance if Russian oil and gas is cut off at short notice. The sharp price rises for energy and other commodities and foodstuffs have fuelled an inflationary increase in consumer prices. To date, the labour market has been less affected. In fact, the number of people in work has returned to its pre-crisis level. (Source: Hamburg Institute of International Economics [HWWI], 2 June 2022)

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, anti-Semitism 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. The propensity for violence in football remained an issue in the reporting period, particularly as spectators returned to the stadiums. Prevention efforts and security plans ensure that groups which frequently resort to violence can be 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. Furthermore, Borussia Dortmund and other clubs from North Rhine-Westphalia have joined forces in the “Stadionallianz gegen Gewalt” initiative in an effort to curb fan violence. They work together with the police with the aim of identifying, isolating and bringing offenders to justice more quickly.

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. Borussia Dortmund has vastly expanded its digital presence, among other things due to the restrictions at times placed on direct contact with fans as a result of the ongoing COVID-19 pandemic. This also includes monitoring those activities appropriately.

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.

More stringent legal regulations has now been classified as high-priority risk due to the plethora of new rules and regulations. As a non-exhaustive list, this includes the ramifications of the German Act Implementing the Second EU Shareholder Rights Directive (ARUG II), the new EU regulation on sustainability reporting, and amendments to the German Money Laundering Act (GwG) and the German Supply Chain Act (LkSG). Such tightening of laws and regulations usually involves a significantly higher administrative workload for Borussia Dortmund, which ties up human resources. Where necessary, greater use is also made of advisory services.

Another risk newly classified as high priority is the risk arising from political developments. This was triggered by the outbreak of war in Ukraine, with all of the humanitarian and economic consequences it entails. Like the COVID-19 pandemic, the war in Ukraine also has an impact on virtually all of the existing risks.

In addition to the COVID-19 pandemic, another grave crisis enveloped Germany and the rest of the world in the middle of the third quarter of the 2021/2022 financial year: the outbreak of war in Ukraine. Everyone at Borussia Dortmund is deeply dismayed by the horrific developments. Moreover, the war in Ukraine is adversely affecting the overall economic situation in Germany, as consumers are seeing their purchasing power diminish in the face of rising commodity, energy and food prices and consequently higher inflation as a result of the conflict. This has also impacted Borussia Dortmund. Borussia Dortmund has terminated advertising contacts with Russian or Russian-linked sponsors. Borussia Dortmund is standing up for the people of Ukraine, in particular through fundraising campaigns and the charity match held at SIGNAL IDUNA PARK on 26 April 2022 between Borussia Dortmund and Ukrainian top-flight club Dynamo Kyiv. The aim was to take a stand against the war and champion peace in Europe, and the net proceeds were donated to carefully selected organisations to help Ukraine.

Category 4 – competitive risk

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

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. The ongoing COVID-19 pandemic has underscored how economically dependent the club is on a trouble-free season. The 2021/2022 season was completed without major scheduling issues thanks to the systematic implementation of DFL’s health and safety protocol – even if the majority of matches were played in front of only small numbers of spectators.

The second risk classified as high-priority in this category is the change in income from TV marketing. 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 pandemic meant that the 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, roughly EUR 4.4 billion will be distributed over this period. This provides a solid planning basis, but also a notable reduction – in particular compared with pre-pandemic levels and the English Premier League. Specifically, the international marketing of the German Football League (DFL Deutsche Fußball Liga) continues to fall short of the ambitious expectations. Future instalments of TV marketing income to be paid by DFL Deutsche Fußball Liga to the clubs will continue to depend on maintaining match operations or contractual and timely payments by media partners.

UEFA’s Financial Fair Play Regulations, which were launched in 2011 with the aim of improving the financial health of European football, have now been fundamentally revised. Now renamed the Financial Sustainability Regulations, they are aimed at making European football more resilient to external shocks, promote sound investments and make football more sustainable in general. At the core of the new regulations are three pillars – cost control, stability and solvency. Based on the “squad cost controls”, clubs may in principle only spend a specific percentage of their income on squad costs, including transfers and consulting fees. In addition, the number of audits of clubs’ solvency has increased to four per year – one by national license inspectors and three by financial experts from UEFA. Potential penalties extend beyond financial sanctions and may involve forfeiting points, incurring transfer bans and being disqualified from tournaments. The risk of failing to comply with the Financial Sustainability Regulations and potential exclusion from international competitions or potential financial sanctions would have serious financial consequences for Borussia Dortmund. The now very lucrative distributions available from UEFA and the international prestige derived from taking part in UEFA competitions underscore 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.

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, the roster should be planned so that any unexpected departures do not leave holes 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. 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 Borussia Dortmund 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 Bundesliga’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 current investments in SIGNAL IDUNA PARK that extend beyond purely maintenance purposes serve in particular to digitalise and modernise the stadium and comply with the requirements as part of EURO 2024, however the highest priority remains to uphold and ensure safety standards for visitors to SIGNAL IDUNA PARK – particularly in light of the COVID-19 pandemic and its economic consequences.

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. It is estimated that 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 could not be ruled out. By completing the construction work to upgrade the container area, these dangers have been removed. Nevertheless, any construction project must first undergo a survey of the potential for consequential mining damage.

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. Attention continues to be placed on the potential loss of significant financial backers and sponsors and the introduction of corresponding countermeasures precisely because of the ongoing COVID-19 crisis and the outbreak of war in Ukraine 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. There is currently nothing to indicate the loss of a significant financial backer/sponsor connected with Borussia Dortmund. Borussia Dortmund is in close contact with its key partners and its marketing firm SPORTFIVE Germany GmbH, with which it maintains a close relationship built on trust. On the one hand, this is also evident from the individual solutions that Borussia Dortmund has found with its partners to compensate for cancelled (hospitality) services. On the other hand, with the pandemic and the war in Ukraine ongoing, Borussia Dortmund also agreed an early extension to its partnership with strategic partner SIGNAL IDUNA until 30 June 2031. Various new sponsorship contracts and contract extensions continue to suggest that existing and prospective partners will remain open to entering into sponsorship arrangements post-pandemic.

Due to the ongoing COVID-19 crisis and the outbreak of war in Ukraine, the risk of bad debts due to insolvency remains classified as a high-priority risk.

In Germany and around the world, the ongoing COVID-19 pandemic and in particular the outbreak of war in Ukraine have caused one of the sharpest economic downturns since the Second World War. This will also continue to impact the solvency of companies and football clubs alike. Borussia Dortmund anticipates that problems could arise with regard to trade 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 it is all the more important to follow through on the action already taken, such as conducting credit checks on foreign businesses or changing the general contractual framework to include high up-front payments. Dunning procedures are likewise particularly vital. Similarly, Borussia Dortmund, its partners and its marketing firm SPORTFIVE Germany GmbH remain in close contact with respect to receivables for advertising income. In addition to the measures already referred to, factoring arrangements for transfer receivables can also be used as a means of managing liquidity.

Borussia Dortmund places utmost importance on maintaining its liquidity and, after assessing its risks during the ongoing COVID-19 pandemic and the war in Ukraine, therefore continues to classify the risk associated with this as high priority. 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. The scenarios calculated covered in particular different levels of success achieved by the team and various external conditions – particularly those attributable to COVID-19 – in order to identify any liquidity bottlenecks early and to initiate appropriate countermeasures designed to secure liquidity. These include the capital increase that was successfully implemented this financial year. Furthermore, an overdraft facility of EUR 120,000 thousand was available at the end of the reporting period; for the coming financial year, Borussia Dortmund’s overdraft facility will amount to EUR 75,000 thousand.

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. In addition, the goal in the short to medium term is to increase the variability of personnel expenses in the professional squad with regard to sporting performance (particularly in the UEFA competitions/qualifying for these competitions) and the associated effects on earnings and liquidity, so as to cushion any potential shortfalls by reducing personnel expenses.

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

23rd match day / 20.02.2022

BVB - Bor. M'gladbach 6:0

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