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THERE ARE REALLY ONLY TWO TYPES OF CLUBS IN THE WORLD OF FOOTBALL – buyers and sellers. If you want to take this a step further, you could divide it into big clubs and suppliers. You have clubs like Manchester United, Bayern Munich and PSG who spend the copious amounts of money that they have on anything they want, then you have clubs like Monaco, Lyon or Ajax who continue to churn out young players that keep them relevant in European football before selling those same players off for astronomical prices to the bigger clubs.

Rinse and repeat. It’s a process that doesn’t look set to stop anytime soon. Schalke is one of the only clubs that fits somewhere in between. Not only are they in between, they are completely off the spectrum. If this was a Venn diagram with buying clubs in one circle and suppliers in the other, it would be incorrect to fit the German outfit anywhere near that diagram.

That’s because the club doesn’t act like any other out there, or at least it hasn’t in recent years. And to be frank, it’s not a good thing. Schalke is the third most valuable team in a profitable Bundesliga, behind only Bayern Munich and Borussia Dortmund.

In terms of world value, they rank a respectable 16th, according to Forbes, just in front of Internazionale and just behind West Ham and Atlético Madrid. On this list of top 20 most valuable clubs in the world, the only real club that could be dubbed a seller is Leicester City (18th) but you’d have to believe they will drop out of the top 20 before too much longer.

Then there is Schalke, nestled prettily in between all of these perennial European contenders with a directive that is nearly impossible to understand.

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When you look at the starting team that Schalke could have composed over years of sales, the result looks like you’re playing FIFA Ultimate Team: Leroy Sané, Julian Draxler, Sead Kolašinac, Mesut Özil, Ivan Rakitić, Manuel Neuer – and the list goes on. Schalke has one of the best player development models in the world, and it continuously shows.

Yet their player retention is incredibly low. And to make matters even more interesting, rather than utilise their solid financial situation to construct a team that can compete with the likes of the other 19 teams on the list, they sell to them. Arsenal, Juventus, Barcelona, Bayern Munich, Manchester City, PSG, Liverpool and more all boast players raised within the Schalke system.

But when they sell, it’s a good day. It’s a part of life to cut players loose for inflated prices and then turn around and invest that money in the team in the form of new, young players that will face the same process. Monaco do this brilliantly. No matter who is taken from them, they always manage to recoup their losses. That’s why talented young players choose Schalke or Monaco as their next step before vaulting into a super club – more exposure thanks to more chances.

Lately, Schalke has not been able to recoup their losses like Monaco or Lyon. They continue to fall further and further out of Bundesliga contention, despite the value and history of their prestigious club, and there looks to be one major thing to blame for the premature dismantling of what used to be a constant European presence – free transfers.

There is a sudden epidemic at Schalke of letting valuable players run down their contracts and walk away for free, something that no other club seems to struggle with in the same capacity, at least no other club of similar standing. This is something that has only started plaguing the club over the past two years, but it has seen them drop from a reliable top-five finish to mid-table mediocrity, where, without European football, they have found it even tougher to recoup their losses.

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This past summer alone, Schalke watched Sead Kolašinac, Eric Maxim Choupo-Moting and Klaas-Jan Huntelaar walk away for free, and they’re just the pick of the bunch. All in all, according to market value, which admittedly doesn’t take into account the inflation of the modern market, they allowed $30 million of talent to leave. That’s $30 million that could have been used to reinvest in the club and help them take some strides towards getting back near the top of the Bundesliga. And again, that is lowballing how much they really lost because they could have pulled in a chunky paycheque for Kolašinac alone.

The previous year, between Joel Matip and Roman Neustädter, another $30 million went missing for free. Compare that to 2013/14, when they spent over $30 million improving the side and, lo and behold, the following season they moved from fourth to third. The year after that, 2015/16, they didn’t invest as much and they fell to sixth. This is when the tale of derailment began.

Schalke is a team that boasts such a player development model that they don’t need to dump hundreds of millions of dollars into the transfer market to be successful. They can rely on the resources they have.

It was in the summer of 2015 that it started falling apart. All of the youth products that they had brought in and raised up had not been approached early on to extend their contracts and alongside the traditional crop of sales (Julian Draxler for $50 million, Leroy Sané for $58 million), there were free transfers sneaking away too. It was like this selling club was only getting a partial return on investment, breaking the formula that works so well for clubs with this strategy.

Despite walking out of the 2015/16 and 2016/17 transfer windows with a net gain of $50 million, the club plummeted, and this past window was defining for them. They ended the summer with a net loss of around $60 million, yet they lost 10 players, at least five of whom were first-team regulars. Those five players, as mentioned, totalled over $30 million in market value.

It’s a financial pickle for a club that has been plagued by poor planning and has massively damaged their future prospects. They have one of the finest academies in the world and they have nothing to show for it. All of their promising youngsters are gone, more are leaving, and the financial return gained from key sales like Draxler and Sané is negated by the frees walking out the door. The club is left scrambling to replace them with the funds they could have recouped had they had the foresight to either lock them in or sell them on earlier.

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Schalke belong near the top of the Bundesliga table. They deserve to compete alongside Dortmund and Bayern like they used to, but sorting out this contractual hellhole that they have got themselves into is priority number one before any progress can be made.

Unfortunately, they first have to deal with more free losses. Leon Goretzka, a young midfielder flirting with elite status, as well as being the most valuable player in their squad – worth around $40 million – has already said that he will be leaving for free in 2018, and creative midfielder Max Meyer, valued at $20 million, has said the same. These two, added to the other frees they have let walk, will completely undo all of the funds raised from Draxler and Sané. And at this point, they are powerless to stop it.

So, what next for Schalke? Three years won’t destroy a team of their standing, but they sure aren’t making it easy on themselves. The key is to never let this happen again and, thankfully, there aren’t any further impending free departures to fret about other than Matija Nastasić, whose contract runs out in 2019.

In terms of the next generation of potential Bosmans, Weston McKennie, Breel Embolo, Amine Harit and Nabil Bentaleb are all young, talented players who will be sough-after. As of right now, they have a combined market value of around $55 million, but that will undoubtedly rise as they mature. The kicker, though, is that they are all locked in until 2021 or 2022, meaning that by the time their contracts end, they will be in their mid-20s and entering their prime.

That is the way forward. Schalke also just locked in young German goalkeeper Alexandre Nubel to a new deal, showing that maybe the past three windows, as well as the window to come, have just been a case of letting their guard down.

It’s not all about the money for clubs like Schalke, but it’s unfathomable to think that in three years they have let about $200 million walk out the door, all because of poor planning. Thankfully, behind the likes of Weston McKennie and Breel Embolo and their lengthy contracts, they may well be on the path to righting the ship 

By Josh Sippie