Not to worry, we don't mean financial collapse, even if HSV are hardly in top form. The club decided to lose rights to the land beneath Volksparkstadion in order to finance renovation ahead of 2024.
When the successor of old Volksparkstadion was being built in 1999, the entire project was worth some €100 million and became one of the most modern football venues. Being innovative at the time came at a price, the roof design makes natural grass growth extremely difficult.
HSV, however, aren't really in a good spot financially. The club lost its Bundesliga status for the first time in 2019 and failed to get promoted back this year. On top of status on the field, the COVID-19 crisis made it extremely hard to generate any revenue. While HSV are not threatened in the short-to-medium term, investing in stadium upgrades requires extra money.
That's why the club opted to revert what has been done in 1998. Back then the city sold land under Volksparkstadion to the club for a symbolic 1 mark, on condition that HSV pump money into building the new stadium for the FIFA World Cup. Now the city will buy the land back, on condition that HSV use the transaction's amount (€23.5 million) to upgrade the stadium for Euro 2024. On September 16 a letter of intent on the subject was signed.
The “Rothosen” will have to then pay annual lease for the land worth 1.8% (€423,000). They will also retain the right to build on the land and redevelop the stadium as their own. The deal would last until 2087, by which time the city would recoup the €23.5 million and get €5 million over that amount. It could then be extended further to 2117.
What upgrades are to be expected?
HSV's own estimates suggested improvements ahead of Euro 2024 could cost €20-30 million. While not a solid budget just yet, it would surely renovation of the roof. Its membrane is reaching the end of its lifespan and could begin to lose its properties. Replacement similar to that in Stuttgart should be expected.
Other improvements will largely touch on the high-tech elements. Lighting is to be switched to 100% LED, as is more and more common these days. New sound system, server room and sanitary facilities are also included in the plan. We also expect media facilities and hospitality to be part of the package.
New naming rights coming?
For the last five years the stadium has seen its historical name back in use, much to the joy of supporters. The move was prompted by HSV's strongest individual shareholder, billionaire Klaus-Michael Kühne, who paid for naming rights until 2019 without putting a brand on the stadium.
But we're in 2020 now, the club's financial position isn't a desirable one, so rumours of new naming rights partner are circulating. Most recently the TV channel Sport1 suggested Deutsche Telekom, current commercial partner and minority investor of HSV, could grab the name. But no confirmation has yet been released.