THE LAST eight of the UEFA Champions League does not have a single representative from Serie A; Lazio, Inter Milan and Napoli all went out in the round of 16, making it three years in the last four in which Italian clubs are nowhere to be seen in the latter stages of the competition. Not so in the other UEFA offerings – the Europa League includes AC Milan, Atalanta and Roma, while Fiorentina are still waving the tricolour in the Conference League.
Serie A has become more competitive in the past few years. After Juventus won the scudetto in 2019-20 for the ninth consecutive season, Inter Milan, AC Milan and Napoli have all won the title. It looks fairly certain that Inter will be champions again in 2024. Inter are rampant this season, which makes their Champions League exit all the more puzzling. They have top Italian talent in Nicolò Barella, Federico Dimarco and Alessandro Bastoni and coveted foreign players like Lautaro Martínez, Hakan Calhanoglu, Marcus Thuram and Denzel Dumfries.
Serie A’s public appeal seems to be on the increase; in 2023-24 the attendances have hit an average of more than 30,000 for the first time since 1999. The Milan clubs are attracting more than 70,000 to every home game at the San Siro and Roma are drawing 60,000-plus crowds. There appears to be greater enthusiasm for the Italian game and much of that can be attributed to the revival of the Milan duo. However, Serie A is lagging behind the Premier League, La Liga and Bundesliga in terms of its commercial prowess.
The clubs have big debts to service and their revenue generation still pales alongside their peer group. For example, Serie A’s revenues total € 2.8 billion compared to the Premier League’s € 6.7 billion and the € 3.7 billion of the Bundesliga and La Liga. In the past decade, income has grown by 60% in Italian football, while the English Premier and La Liga has seen earnings increase by 130% and 100% respectively.
The big three clubs (Juventus, AC Milan and Inter) all saw revenues grow in 2022-23, but only Milan made a pre-tax profit (€ 13.5 million). Juve lost € 117 million, while Inter’s deficit was € 77 million. In the last five years, Italy’s big four (Roma are the fourth) have run up losses of more than € 2.3 billion.
Simply, most Italian clubs do not generate enough cash, which makes their combined losses of € 427 million in 2022-23 and total debts of € 3.2 billion seem rather precarious, despite being able to offset losses with € 587 million earned from player sales. Expenses, including wages, are a problem. Total costs were around € 3.85 billion in 2022-23 with salaries consuming 63% of income.
Italian football is no stranger to scandal and there has been a fresh wave of intrigue involving Juventus and now AC Milan. Juventus, who were embroiled in the Calciopoli scandal earlier in the 21st century, were hit by a 15-point deduction over “false accounting” in connection with past transfer dealings. The points were restored after an appeal, but they eventually had 10 taken away. The club has accepted a € 20 million fine and a one-year ban from European competition.
Milan are now under the spotlight concerning the sale of the club in 2022 by Elliott Management to private equity group RedBird. The Milan HQ in Portello was raided by the Guardia di Finanza (Italian financial police) over claims that despite the sale, Elliott may still be controlling the club. The allegations have been dismissed as totally untrue by the club, but this saga highlights that Italian football could still have skeletons in its cupboard.
One of the hurdles is the number of clubs who cannot rely on equity contributions from shareholders. Juventus, however, have had three recapitalisations in the past four years receiving a total of around € 700 million from their shareholders. Consistent losses can erode capital but most of Italy’s clubs cannot follow Juve’s lead. Sampdoria almost went bankrupt last season and more recently, Hellas Verona saw their shares seized by the police as an investigation began over the solvency of the club’s owner.
Ultimately, Italian football needs to show more discipline around spending which will undoubtedly be encouraged by UEFA’s squad cost ratio, which comes into force in 2025-26. The cost of the squad (salaries, transfer amortisation and agent commissions) versus revenues and income from player transfers, must not exceed 70%. Football finance experts such as Football Benchmark’s Andre Sartori believe that stronger regulation will not only benefit clubs’ balance sheets, but will also increase the appetite of institutional investors and make their businesses more attractive. The time for change is now in Italy.
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