Gladbach - the real role model in German Football?

Although I am not a fan or emotionally involved, the development of Borussia M?nchengladbach receives my greatest respect. Back in October 2008, when Max Eberl took the wheel, Gladbach was last in the Bundesliga with four points out of 8 matches played and a goal difference of 8:17. At the time, Hamburg led the league table and Hannover 96 just have beaten Bayern Munich 1:0 with a goal from a direct free kick (shot by the brilliant Szabolcs Huszti and backed by defending wall composed of Vinicius and Frank Fahrenhorst).

Fast forward - 2020, Hamburg is still in the top of a league but it’s now a different one, Hannover 96 has been relegated twice, Szabolcs Huszti still scores from direct free kicks* and Gladbach has established themselves as a continuous contender for the European competitions.

Borussia M?nchengladbach is a club with a long-lasting history and an inherent part of the Bundesliga itself.

Borussia M?nchengladbach is a club with a long-lasting history and an inherent part of the Bundesliga itself. Since the club is not funded by any kind of, for example, large car manufacturer or fizzy drink producer and therefore not blessed with overly full pockets. I was wondering what they did differently compared to clubs with a comparable history like Hamburger SV, VfB Stuttgart or 1. FC Cologne.

Let’s have a look at some descriptive numbers first:

The scatter plot below shows the goals scored per 90 minutes on the x-axis and the goals conceded per 90 minutes on the y-axis for every team in 1. Bundesliga from 2008/2009 to 2018/2019. The green dots are the performances of Borussia M?nchengladbach.

A look at the points, goals scored or goals conceded does not reveal any obvious pattern (e.g. improving defense before investing in offense) but the development from a relegation candidate to a team that finished the league in the top half for eight consecutive seasons with several European appearances is truly impressive. One would expect such a journey is certainly linked to a massive financial effort.

It turns out that Gladbach indeed invested more - on average per season - than for example VfB Stuttgart or 1. FC Cologne in the recent past but just half as much as the glorious Hamburger SV. In absolute terms, Borussia M?nchengladbach paid on average 4.28 million Euros per season in transfer fees since Max Eberl is in charge, which seems ridiculously sparse, considering the sums currently being paid on the market. The graph below shows the net transfer fees (spendings - earnings) paid by Hamburger SV, VfB Stuttgart, 1. FC Cologne and Borussia M?nchengladbach during the tenure of Mr. Eberl. For a better overview, you also find a bar chart displaying only the average net spendings of these clubs during the same period. Numbers in million EUR.

Interestingly, the 4.8 million Euros average net spendings are mainly driven by offensive players. Gladbach almost spent nothing (net) on defensive players on average during the given seasons (dotted blue line indicates the respective average):

So, if it is not a vast financial power, what is the secret ingredient to Gladbach’s success in the recent past?

As always in our complex world, you will not find this single piece of magic but rather a succession of good decisions. There are a couple of organisational building blocks that seem to facilitate the success on the pitch:

Continuity of staff   

The average tenures of head coaches among the big leagues are continually decreasing such that most of the head coaches or general managers do not even survive two consecutive seasons. Despite being an obvious inefficiency, the enormous level of personnel turnover became a widely accepted part of the game we love. Despite being an obvious inefficiency, the enormous level of personnel turnover became a widely accepted part of the game we love.

Despite being an obvious inefficiency, the enormous level of personnel turnover became a widely accepted part of the game we love.

Usually, a head coach (or general manager) comes along with a trusted entourage. Since in most cases not only the head coach but also his fellows are sacked, the repercussions of such a dismissal multiply. For any organisation, a high turnover of people hampers the creation of sustainable processes and the retention of knowledge. Anytime a person leaves an organisation also at least a bit of knowledge vanishes too. It is aggravating that the successors often turn things upside down, simply for the sake of turning things upside down. While there are different sources, the numbers are ranging around 1.08 to 1.22 years (or approx. 394 to 445 days) for the average tenure of a head coach in one of the bigger European leagues. Let’s look at the terms of the Gladbach head coaches during the Eberl era (we exclude the great Hans Meyer and Christian Ziege due to their interim role):

• Michael Frontzeck 592 days
• Lucien Favre 1,679 days
• André Schubert 456 days
• Dieter Hecking 921 days
• Marco Rose is currently at 262 days

Behind the scenes, you find some more continuity:

• A chief scout, who is at the club since 2007
• Head of Scouting Department, with the club since 2007 in different roles
• A bunch of scouts working for Gladbach since, 2001, 2009, 2010 or 2013
• Youth coordinator present since 2008
• Managing Director, 1999

You find similar tenures within the board of chairmen. Aside from these long-lasting hires, you find some innovative installations as well. In 2017, for instance, the club installed Otto Addo as a dedicated talent manager, who is taking care of the integration of young talents into the professional team. Meanwhile, since the 2019/2020 season, this role has been filled by Eugen Polanski, a former Gladbach player. This high degree of continuity among responsible people leads to another important factor.

Clear focus

The past transfer activities seem to reveal a scouting focus on the Swiss Super League and the French Ligue 1 and Ligue 2. Having a clear focus helps to attribute scarce resources most efficiently. To be a specialist for certain markets can be the crucial point that saves a lot of money and maximizes returns in the end. Below you can find a list of some transfers Gladbach did from the leagues mentioned. I leave the judgement about these signings up to you:

Borussia M?nchengladbach did not only invest into players but also in concrete. Nowadays, continuous success on the pitch requires sustainable infrastructure as the foundation of future growth.

Structural Excellence

We have seen that Gladbach invested smartly in players with the potential to increase their market value to be sold with a solid return. Apart from these investments directly visible on the pitch, the club also invested in the surrounding infrastructure. In 2019, they opened “Borussia-8-Grad”, a building complex right next to the stadium. A total of 15,000 square meters of space has been created on seven floors. The main part of the approximately 31 million Euro complex is occupied by a hotel with 131 rooms and a lounge. Several medical practices have also moved in. An approximately 1,000 square metre Borussia fan shop was built on the ground floor, where a total of 22 counters will guarantee fast checkout even on match days. The club’s museum, the "FohlenWelt", where the history of the club is told on more than 1,100 square meters, is also located within the modern building. Next to the training grounds, a 3.5 million Euro youth academy, with space for 24 talents, completes the campus. The next step on the roadmap was just recently announced: Because the space in the basement of the stadium becomes too poky for the players, the growing staff and the medical department, the club plans a new centre for the first team. Infrastructure does not only contain bricks and concrete but also the staff around the team. During the past decade, Gladbach’s payroll rose roughly 160%. This increase is not only related to rising payments for better players but also to a growing staff. The number of employees rose at the same time by 80%, resulting in not only eleven but 280 people working towards that one final goal - to bring the trophies into the cabinet. The rising amount of money spent per employee indicates that Gladbach did not only invest into headcount but also quality personnel - of course, the payroll is still heavily driven by the first team so numbers have to be taken carefully. Find some charts below, that illustrate the development of staff and payroll. These numbers are taken from annual statements, thus not correspondent to the season but the fiscal year.

Financial Discipline

Looking at the past financial performance of Borussia VfL 1900 M?nchengladbach GmbH reveals a strong financial discipline and sustainable business processes. Despite having some setbacks in the league table in 2017 and 2018 the club was able to increase their equity ratio from roughly 14% to more than 40% in the recent years. Further, during the tenure of Max Eberl, the profit and loss statements show a continuous growth in revenues as well as net income at a solid and reasonable rate. You find some numbers illustrated below.

As mentioned in the beginning, I am neither a Gladbach fan nor personally related to the club in any kind of way. This little article should just show what’s possible during a decade with smart management and a clever allocation of resources. Let’s say it’s a way to pay tribute to a club that clearly belongs to the top tier in Germany but often gets forgotten when it comes to the absolute elite. As always, I hope you had some fun reading this little exercise and whenever you would like to talk about football feel free to drop me a message.

Cheers!

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* You have probably seen it, an impressive UEL qualifiers match, 11.07.2019, FK Zeta Golubovac versus MOL Fehérvár FC, 90+3 minutes played, Huszti still classy as ever before ??

** Market values and transfer fees are taken from transfermarkt.de