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Hertha bet on capital gains and Silicon Valley in race to join super clubs

BERLIN -- It has been a turbulent decade for football once again. As more money entered the market, the gaps between the top European clubs and those below them grew ever wider. Super clubs have emerged and, one tier below, less financially powerful teams such as Tottenham, Atletico Madrid and Borussia Dortmund are doing everything in their power to not lose sight of Manchester United, Manchester City, Paris Saint-Germain, Real Madrid, Barcelona and Bayern Munich.

The Champions League has long been established as European football's main competition. It attracts viewers from all over the world, only matched by the cash-rich Premier League, with its longstanding overseas appeal and the advantage of focusing on an English-speaking audience from day one.

The race to conquer the American and Chinese markets has started, and clubs are opening branches in New York, Shanghai and Singapore. They are competing in summer tournaments invented by billionaires. Every now and then a new club emerges, leaves the peloton and goes on the long solo ride to close the gap to the chasers. Some of them are fuelled by money, such as new Bundesliga side RB Leipzig; others, like Atletico and Dortmund, did smart business off the pitch and at the same time were inspired by their coach.

Yet in every European league there are several teams still sitting in the peloton, waiting for their moment to break away. Some of those clubs are aware they not only need to focus on their particular strength and tradition but also be innovative when the right moment, the stroke of luck they need, finally hits them.

While most European capitals are home to at least one of the teams from that country's elite, or at least a club with the promise of breaking through, that has not been the case in Germany. Berlin, the capital since reunification in 1990, has not even been able to maintain a consistent presence in the country's top tier over the last quarter of a century.

Union Berlin, based in the eastern suburb Kopenick, have established themselves as a solid second-division club, but even if they do win promotion to the upper tier one day, they are always likely to be more of a Rayo Vallecano than an Atletico.

Hertha BSC, playing in the western district Westend, are much more familiar with the top flight, although they spent several years as a yo-yo club after their fourth-place finish in the Bundesliga in 2008-09. Now, Hertha are gradually making distinct progress on the pitch: they finished seventh last season and currently sit fourth in the table, just three points behind Bayern, going into the eighth matchday this term. These days, Hertha sit comfortable in the pack. They are working on getting the capital behind the team and preparing for whatever the future might hold in store.

Paul Keuter (r) watches a training session with general manager Michael Preetz.

Not all of this is welcomed by those following the club. For the traditionalists, change can mean friction.

"I played for a traditional club myself, even though it was only an amateur side. It went bust. Sadly, I can't show my son in which stadium I played because it has been demolished," Paul Keuter tells ESPN FC. He joined Hertha from Twitter in January. The Hamburg-born 41-year-old had been working as head of sports, Germany, for the social media network and also acted as the company's global sports chair before returning to Hertha, the club he had worked for over a decade ago. The father of two now is one of four executives at the club. He is responsible for the digital transformation and the development of new digital business models.

Keuter has not received a warm welcome from parts of the Hertha fanbase. They think he's all bark and no bite, and that he's representing a new generation of slick executives within the league, who would sell off the club's tradition for a shot at hitting the big time in China or the United States.

"I have no use for the demonisation of the game's commercialisation. I think it's fantastic to see how football has developed, but the important thing is: My standpoint does not matter. It's my duty as part of the club's executive to make sure we are forearmed for the future, otherwise I am out of place here," he says. "It's not about what we like or don't like. Professional football is advancing at a blistering speed. It's just unstoppable."

In the Bundesliga, the fall of the 50+1 rule, which says that over 50 percent of the club has to be owned by its members, is no longer unthinkable. Company-owned clubs Wolfsburg and Bayer Leverkusen have never been included in the rule. At Hamburg, a local businessman, Klaus-Michael Kuhne, bankrolls the club and is gaining more and more influence. In the south, Hoffenheim's rise was solely down to SAP founder Dietmar Hopp, and after the arrival of RB Leipzig and their new ways of bypassing the rule, an ever more significant number of clubs are no longer acting within the league's old system.

In addition to that, at the top of the league hierarchy, Bayern and Dortmund have in recent years sold shares of their respective clubs to brands, tying them closer to the structures and generating fresh money.

Hertha Berlin have struggled to fill their 75,000-capacity stadium, with 34,000 empty seats for the first home game of the season against Freiburg.

Hertha have already gone down the investment route themselves. In 2014, the American private equity firm KKR injected a total of €60 million into Hertha, and gave the club the chance to invest into the squad. "That's a clear 'yes,'" Ingo Schiller, the club's finance executive, said when asked whether the KKR money made U.S. international John Brooks' new contract possible.

The fall of 50+1 might still be a few years away, but it could be a major chance for Hertha to break through. "Should it fall, I can't say right now what it would exactly mean for Hertha, but my prediction would be that there are many who'd not be against the location of Berlin. It's totally clear: We are the capital and we are one of the hottest metropolises in the world," Keuter says, adding that the advantage of their location is already in effect. "The players also join Hertha because of the city," he says -- and young full-back Mitchell Weiser confirmed the executive's words in a recent interview.

But first things first: Despite a series of good performances last season and one of the best starts in the club's history this term, Hertha have found it difficult to attract new fans. The attendance average currently stands at around 50,000, which is the sixth best average in the league but looks depressingly small in the historic 74,475-capacity Olympiastadion.

"The location advantage abroad is a thing for the future, but we don't want to build the fifth floor before finishing the foundation," Keuter says, explaining why Hertha have yet to begin the internationalisation process. "We want to stand shoulder-to-shoulder with the city. We have great challenges here. We still have to master them. The club has yet to completely merge with the international flair our city has."

Over the past few years, the German capital has turned itself into one of the hotspots for tech startups. It has attracted the world's biggest venture capital funds, which have invested and invested. Britain's vote to leave the European Union has added to the momentum as several companies are now relocating from London to Berlin. The city is hoping to become the Silicon Valley of Europe, and Hertha want to be part of it all. Keuter says: "In Silicon Valley, the place where the future of the humankind is being shaped right now, the name Berlin is reverently whispered as one of the top metropolises of this world, with a lot of creativity and a start-up scene that is moving."

This summer, German publicity bureau Jung von Matt/Sports positioned the club as "Berlin's oldest start-up" and the club began operating with the English slogan "We try. We fail. We win."

Keuter says: "It's everything we want to be, and what we are we are. We tried things, we fell flat on our face and got up again." He adds that the focus is on "we try" -- highlighting the club's hunger to be "courageous" without fearing to fail both on and off the pitch.

One of the measures to embrace Berlin has seen the club's executives partially move into a joint working space on Friedrichstrasse, Mindspace, in Berlin's old east.

Hertha Berlin's executives now operate from the Mindspace offices in the city centre.

"We need to achieve a change of culture at our club offices, fuel innovations. Be fast, be mentally alert. We need to be able to implement a foundation of teamwork that will pay off on the start-up scene," Keuter says, adding that "you can't play Bundesliga and/or want to win the league and watch time pass you by." He cites the example of reigning champions Bayern, who have installed their own data centre at the Allianz Arena.

"Within the next 25 years, technology and our society will undergo changes as fast as in the last 150 years put together," Keuter says, "and companies not facing up to the digital transformation are acting carelessly. We need to make a step toward the city. It's a transformation. But we should never forget where our home is. Our home is Berlin. And our roots are mirrored in that campaign."

But contrary to the executive's enthusiasm, the campaign did not sit well with parts of the fanbase. "It's been done before, back in 2003. They called it Play Berlin," Robert Ide, Berlin editor at daily newspaper Der Tagesspiegel, says. "It does not lean on Berlin, it's not Hertha's Berlin. It would suit the club better to try and transport a down-to-earth image, and some imperfection. Just like the city. It's a bit out of touch."

It's evident that there is a different perception of what Hertha is and what Hertha could be. Keuter is envisioning the future, whereas people like Ide or Frank Pachur -- a member of the club's oldest fan club, HFC -- look at the club's past and the present.

Frank Pachur waits to load the supporters' coach with drinks for the long trip to Dortmund.

"It's a shame that we don't manage to get an army of fans to an away match and turn it into a home game," Pachur said during a coach trip to Dortmund last Friday. His fan club organises transport to every away match in the Bundesliga. Ahead of the game at the Westfalenstadion, they meet at 9:30 a.m. at a local bakery in Berlin's old west, carry soft drinks, crates of Schultheiss -- the local beer, often neglected by those moving to the capital -- and bottles of liquor on board, and embark on a 21-hour round trip.

Some of them have travelled with the club since the days before the fall of the Berlin Wall in 1989, and tell tales of members of the Volkspolizei -- the East German police force -- toying with the fans, keeping them at the border for hours and hours. They always travelled. And they still do. Hertha is their club, Hertha is very much part of their everyday life. They meet for card games a couple of times per year, have a grand party at the end of the year and are a family within the Hertha family. There are many families like this. Not only in Berlin but at nearly every other club in Germany. Football, at this stage, has a very social aspect.

Yet, due to the history of Berlin, there is a growth barrier for the club's fanbase. It is a fast-growing city where the bulk of those arriving already have a first club and are not interested in a second. They follow the fortunes of their teams in the bars they have made their home from home and don't care about Hertha, who for many are deemed not attractive enough to flirt with.

"Those parts of town where the start-up scene is moving are not necessary in our stadium," Keuter says. "The times when you were able to say 'my club, my city, my passion' are over, I believe. The creative young people want to go where they find their mindset."

Others say, as Ide puts it, that the club is "belittling itself by trying to be modern" and are urging the club to learn and tell stories of the past, like that of the first match after the fall of the Berlin Wall, when those coming from the old east were allowed free entrance to the second-tier match against Wattenscheid. They would also like the club to tell stories about the present. "We have a great coach in Pal Dardai. An exciting, young team with many good lads. Maybe it all just needs time," Ide says.

One Hertha fan en route to Dortmund feels the time is now. "We'll beat them 4-0, and Bayern will suffer a heavy defeat against Frankfurt," he says ahead of the game at the Westfalenstadion. That weekend, both Hertha and Bayern draw.

Keuter has a more pragmatic stance. "We can't wait until we win the league one day before we adjust to the new technological era. We have to do it now. It's a process. In the end, we still play football," he says.

It's clear, if the club can maintain their momentum on the pitch over the next few years, that Hertha could leave the peloton and go on a solo ride. "It's another try," Keuter says, referencing his club's slogan. "And we prove that by changing the club completely. If we don't live what we preach, nobody will believe us. But I can reassure you: We are doing it!"

Stephan Uersfeld is the Germany correspondent for ESPN FC. Follow him on Twitter @uersfeld.


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