Hertha Berlin’s Windhorst promised Bundesliga glory. So what went wrong?

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BERLIN — Some fans believe Hertha Berlin have been cursed since the 1960s. Shortly after the inauguration of the Bundesliga in 1963, Gunter Herzog, the new treasurer of the club, found out that they were in debt because Hertha had given players substantial signing fees to attract them to West Berlin. Since the league’s officials were strictly auditing balance sheets at the time, Hertha were in trouble. To solve the issue, Herzog, who also owned a funeral parlor, printed 55,000 tickets, kept them off the books and hid them from the auditors in caskets. Hertha eventually got busted and were relegated as a punishment.

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In the decades since, fans have witnessed a bribery scandal, multiple relegations, a string of executives making false promises and dozens of managers who have failed to implement a winning mentality. Berlin is the only major capital from the top six European football nations without a club that has been able to compete in the Champions League.

In 2019, one man decided he wanted to break that cycle. Lars Windhorst, a well-known investment guru in Germany, acquired shares of the club (through his holding company, Tennor) worth a total of €224 million and therefore became a minority owner with a 49.9 percent stake. He later invested another €150 million.

Within weeks of the announcement, Windhorst made his presence felt as the supposed “savior” who invests and talks equally big. The 44-year-old explained that he saw huge potential in Hertha, given how the city of Berlin had the reputation of a booming metropolis with an energetic start-up culture. He coined the term “Big City Club” to describe what Hertha were supposed to become.

Except the reality has been anything but. Performances on the field have not improved — finishing 11th, 10th and 14th in their past three seasons — several managers (including former U.S. boss Jurgen Klinsmann) have been sacked and star players (like striker Matheus Cunha) that were signed have already left. Windhorst wanted Hertha to become a representation of Berlin, the German capital, but he may have underestimated the task. It would take more than spending hundreds of millions and those fans who were skeptical of the new investor and his track record feel validated by the lack of progress.

A wunderkind and survivor

The business scene in Germany is quite tame compared to much of the world. Most chief executives of big corporations made their careers by slowly working their way up the company ladder, boasting extensive experience of the institutions they run and the drive to keep things steady.

Windhorst has been one of the few exceptions. At 16, he co-founded a computing equipment company and by the end of the first year, they had a staff of 80 people. Thanks to his early success, Windhorst became the darling of the German business world in the 1990s, even being invited by then-head of government Helmut Kohl to be part of delegations on trips to Asia. At the time, the German economy had just recovered from a recession and was thirsting for those with big and bold ideas; young Windhorst was exactly that type of guy that had visions and was keen on selling them. “Germany needs more wunderkinds like him,” the German chancellor said.

However, his meteoric rise didn’t last. Some of his investments in Asia were negatively affected by the 1997 financial crisis. He later started focusing on investments into internet enterprises shortly before the dot-com bubble burst. In 2009, he suffered bankruptcy for a second time and was found guilty of embezzlement (roughly €900,000) a year later. But Windhorst has earned a reputation as a survivor. He even survived a plane crash in Kazakhstan in 2007 in which one of the pilots died.

Those who are not so fond of Windhorst say that he is a “dubious” businessman at best. With his new investment group — originally called Sapinda, now Tennor — Windhorst attempts to find distressed assets that could generate a profit in the future if certain operational or structural changes were made. With the idea to buy into anything from manufacturers to real estate, Windhorst approaches wealthy people and tries to convince them to invest in his ideas. In the past few years alone, Tennor has invested in equestrian events, multi-use real estate (like the Ihme Center in Hanover, a one-million square feet residential, business and shopping area) and the faltering shipyard, FSG. These entities had been everything but profitable before Windhorst appeared and, according to reports, they remain in the red.

Driven by profit or esteem?

Considering the volatility and unpredictability of the football business, it raises the question of why Windhorst would add an unsuccessful football club to his already losing portfolio.

“There are two kinds of investors in the football world,” economist Christoph Breuer from the German Sport University Cologne told ESPN. “There are investors that aim for financial yield, usually big companies from the entertainment sector that own arenas or want distribution to their media channels. That is common in North America. But the dominant investor model in European football does not aim for a financial yield, but a so-called social yield.” This means investors get into football to increase their reputation and widen their networks. In a way, this could apply to the likes of Chelsea’s Roman Abramovich and Manchester City’s Sheikh Mansour who “buy access to a society and earn esteem as a form of profit,” as Breuer put it.

Most of Windhorst’s projects likely increase his profile on a small scale; becoming involved in Hertha gives him a new level of visibility. However, as opposed to a wealthy oligarch like Abramovich, Windhorst has not invested his own money. By all accounts, he is not a billionaire, but someone that spends the money of others.

Some Hertha insiders indicate to ESPN that Windhorst was sold a convincing story by the club officials or, specifically, by Ingo Schiller, Hertha’s managing director for finance. Schiller, similar to Windhorst, is said to be a charismatic, natural businessman who managed to portray Hertha as a “sleeping giant” ready to be roused by Tennor’s funding.

When Windhorst arrived at Hertha and called it the future “Big City Club,” he made sure that the label conveyed the scale of his ambitions. He hired Jurgen Klinsmann as his football advisor — a move that would later lead to Klinsmann becoming Hertha manager in November 2019 — and paid the first installment of the initial €224 million package, which was later increased by another €150 million. In return, Tennor received a minority share of the Bundesliga team, while Hertha’s higher-ups had control over the money as soon as Tennor’s deposits cleared. The club were able to pay off a portion of their debt and spend money for new players, with Klinsmann acting as the charismatic mouthpiece.

One transfer story, in particular, shows the dynamic after Windhorst’s arrival: Polish striker Krzysztof Piatek was under contract at AC Milan at the time and in search of a new club. When he and his agent were first approached by Hertha, they did not think much of what they heard. One phone call with Klinsmann later, they were convinced that Hertha were the perfect choice. The deal cost Berlin €24 million in transfer fees alone and has not paid off so far, with just 11 goals in 45 league games over the past two seasons.

Meanwhile, Klinsmann’s journey ended when he quit his managerial job in Feb. 2020. When he took over the team, Hertha were in 15th place; when he left, they were 14th. Klinsmann stated that he was not happy about his restricted powers as manager.

A few weeks after his resignation, 22 pages of private notes that Klinsmann had made during his tenure were published by the sports magazine “Sport Bild.” In these notes, Klinsmann attacked Hertha’s hierarchy and lack of strategic thinking. At the time, Windhorst said that he took issue with Klinsmann’s assessment, but a year later he agreed with much of the criticism towards the club’s transfer policy and internal culture.

“In hindsight, many acknowledge that Jurgen Klinsmann’s ideas and analysis were not that wrong,” said Windhorst in February.

50+1 rule sets limits

The Hertha-Windhorst marriage has not been a success story. Arguably the quality of the squad declined this summer due to the departures of star winger Cunha and goalscorer Jhon Córdoba. Fredi Bobic, the new sporting director, is doing everything he can to rebuild the squad, but it’s an uphill battle given the organizational chaos of the past.

It’s not helped matters that Windhorst has repeatedly changed his tone towards the club. At times, he put Hertha’s board for recent failures on the spot; other times he expressed his unbroken trust in the decision-makers. In any case, his involvement has raised some eyebrows within the Bundesliga as every club must obey the so-called “50+1 rule.” This rule was introduced in 1999 and prohibits outside investors from taking control of a team that competes in the Bundesliga or Bundesliga II.

Hertha, like many other clubs, have outsourced their first team and run it as a separate company — broadly equivalent to an LLC — though the club with its members own the majority of the shares. Tennor has only acquired minority shares and possesses four of the nine seats of the supervisory board. On paper, the company has no immediate say, but naturally, there are doubts that he follows a hands-off approach. Normally, when Tennor invests in enterprises, it acquires a controlling share. Windhorst has visions and wants his people to execute them. With Hertha, it is different.

The 50+1 rule itself has been under pressure as the German federal cartel office has raised concerns over certain exception permits. Currently, the Bundesliga can allow corporations or individuals to control a team if they have, as investors, supported the team “constantly and significantly” for over 20 years. The permits apply to Bayer Leverkusen, VfL Wolfsburg and TSG Hoffenheim. The cartel office states that such exceptions contradict the idea of a level playing field. “The German Football League must ensure a uniform application and enforcement for all clubs,” Andreas Mundt, the head of the cartel office, said.

An even more pressing issue is the emergence of RB Leipzig, a club with a heavily influential sponsor in Red Bull and a membership model that does not allow an everyday supporter to join. As of September 2021, Leipzig have only 21 members, while Bayern Munich have over 290,000. Even if Red Bull does not “own” the club, no one believes that the Austrian energy drinks giant is not calling the shots. Leipzig will meet Hertha this Saturday.

Windhorst has publicly stated that he is not a fan of the 50+1 rule. “Even if we had 100 percent or 50.1 percent of the voting rights, I as the financial investor could not constantly intervene and decide,” he said. “I need the fans, the members who live passionately for football and carry the club. As an outside investor, I could not do that.”

That said, the current model makes it unlikely that he will ever make a profit on the €374 million investment. Because Tennor only holds minority shares, Hertha would have to generate twice or three times that in profit, depending on the specific agreements. “Investors and even people in my company have confronted me like ‘what kind of investment is this, no profit, no success and no say?'” he recalled. “In the finance world, such an investment is unusual or even exotic.”

Windhorst remains committed — for now

So far, the club are almost exactly where they were when the agreement with Windhorst was reached, only with a net transfer loss of over €60 million since 2019. “It is my goal to push Hertha to the top. If this needs additional investments, I will provide the means — be it in six months, in a year or two,” Windhorst said.

Despite Windhorst’s big promises, this stagnation has disillusioned many fans when it comes to the future of Hertha Berlin. The notion of evolving into the “Big City Club” is as far away as imaginable. One could argue that Hertha are not even the number one in Berlin anymore, as Union Berlin arrived in the Bundesliga in 2019 and now play internationally, albeit only in the third-rate Europa Conference League after finishing seventh last season.

The promotion of Union to the German top flight has also highlighted the division of the city itself. Even 30-plus years after the fall of the Berlin Wall, Berlin does not feel united. Hertha are located deep in the west in the district of Charlottenburg where the old-money elite lives, while Union are in the eastern district of Kopenick, which has suffered from closure of factories in the past few decades. The two clubs are 20 miles apart, but it feels like a gap as wide as an ocean. Even before Union made their way to the Bundesliga, Hertha were never seen as the club to represent the entire city.

Windhorst has assured Hertha that he’s still committed to the partnership even though it’s questionable how much he’s been paying attention. In July and August, Windhorst was in the United States to find buyers for some of Tennor’s assets. Insiders say that his company could collapse if he cannot bring in over €1 billion in fresh cash before the end of the year. It is assumed that he has €2.5 billion in outstanding financial obligations, mostly based on loan deals he made travelling across the globe in his private jet and selling compelling stories to financiers.

What is also known is the fact that Tennor has had to fund a number of projects without getting much in return. Some assets were quietly ditched for next to nothing, but the worst money-burner is said to be Hertha Berlin, according to a report by the respected business paper “manager magazin.” Tennor has not received one penny of profit and the shares are currently worth much less than €374 million.

“I will never give up. Never. Not once in my life have I done that,” Windhorst recently said. He is determined to reach his goals with the club “by all means necessary.”

Fans and club officials can only hope that he has the time to deliver on his promises. After all, Hertha’s success or failure is tied to Windhorst.



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