Dire Financial Straits for Serie A; In Other News, the Sky is Blue
By: Martha | June 25th, 2007
Italian financial newspaper Il Sole 24 Ore (which has an impressive website, albeit one on which I cannot find the original study) recently released a report detailing its examination of the financial results of Serie A’s 2005-2006 season. Not surprisingly, their findings are grim, offset only by the cheery news that things were even worse in 2004-2005. (Hooray for silver linings!)
The report, which came from examining the finances of 17 clubs (Sampdoria’s info wasn’t “ready” yet while, disturbingly, neither Reggina nor Messina had any financial information to contribute — is that legal?), reveals breathtaking total losses of €380 million, numbers reached with the generous help of Inter, which contributed nearly half that amount all on their own. (€181.5 million total losses, despite taking in a reported €206.6 million during that same season. They are spending a LOT of money.) Je. Sus. Must be nice to have more money that God, huh? Other major losers during the 2005-2005 season were Juventus (€36.5 million) and Fiorentina (€19.52 million), while Roma nearly broke even and Milan turned a small profit, thanks to the sale of one Andriy Shevchenko.
Perhaps unsurprisingly, the clubs over €1 million black are mostly small ones whose very existence depends on careful management of financial matters: Udinese (€6.49 million), Parma — who look to have learned their lesson from that whole bankruptcy thing (€3.01 million), Ascoli (€2.66 million), Lazio (€2.08 million) and Livorno (€1.3 million) all managed solid profits.
Numbers for this season won’t be out for 12 months or so, but it seems unlikely much will change. Milan will probably join Inter and Juve in the red (Can you say: Ronaldo and [insert name of Barcelona striker here]?), and the sale of Toni should combine with rational buying to improve a bit for the Viola, but beyond that, free spending by the wealthy clubs will keep the league anchored deep in the red.
It’d be nice if the big boys could learn some rationality from the smaller clubs when it comes to handling their money, but expectations for them to make flashy buys are so massive — and the coffers on which they’re built equally so — that there doesn’t seem much motivation towards self-control. They spend, essentially, without consequence, so there’s no reason to change their habits.
Category: 
Tags: AC Milan, finances, Fiorentina, Inter Milan, Juventus, Reggina, Roma, Rumors -amp; News, Serie ASubscribe
|
Print
|
Share
      |
Comments
-
While this is troubling - you have to look at this kind of stuff from the perspective of who is spending the money. I think it is fair to say that many of the “big” clubs have directors who have more money than they can spend, and it is not problematic for them to lose money on the squad.
Obviously, it would be troubling for Inter to lose that staggering amount if Moratti were trying to run the team to make a profit. I suspect he has other objectives that rank much higher than making money off of the squad - he has plenty of other ways to line his pockets.
Posted from
United States
-
tmc, I’m glad you weighted in on this one because I’d love to hear your take on the Fiorentina losses. I’m a latecomer to the club and know nothing about the money behind it, but I can’t imagine they can afford to bleed money like that. Or is their bankroll bigger than I think?
Posted from
Portugal -
Ducktales, oo-oo. How long did you have that pic in the queue, waiting for a chance to use it?
Much more pleasing to look at than the “chicken-dance while I grab my tighty-whiteys” Cassano pic that you are so fond of.
You and your primadonna drama queens…
Posted from
United States -
Trust me, Mike, if I could use a Ducktales pic for every post, I would. Holy crap did I love that show.
(And I actually have no love for Cassano. That said? If this Inter thing happens, I will immediately find something lovable about him. Yes, I am a whore.)
Posted from
Portugal -
It is hard to do this off of the top of my head, but here’s my take on the Viola being in the red for the 2005-2006 season. Obviously, the club has been fiscally responsible under the Della Valle regime, due to the cautionary tale of the financial woes at the end of the Cecchi Gori regime.
The club’s first season back in Serie A was the 2004-2005 season, where they narrowly escaped bouncing back to the Serie B (and of course proceeded to get mixed up in the Calciopoli scandal).
In the summer of 2005, La Viola purchased Luca Toni from Palermo for 10 million Euros. Also, Frey joined the club permanently that summer for an undisclosed amount (he played 2004-2005 with Fiorentina on loan from Parma). Pazzini and Bojinov (for 13 million Euros) were also acquired in 2005. As an aside, it is pretty crazy to see that they paid more for Bojinov than Toni. Granted Bojinov was on some incredible form as a promising young player at Lecce, but clearly Toni was a great bargain at that price.
The reason Firoentina was in the red at that point in time is they outlaid a bunch of money with the goal of improving the squad to get to a European placing, which they did at the end of the 2005-2006 season, qualifying for the Champions League. Now, I don’t know how much that is worth to a club exactly, but I’m positive that it is worth at least 20 million Euros to gain entrance to the Champions League. This plan would have worked perfectly, except for the fact that the Calciopoli scandal delayed the eventual entry of Fiorentina into the Champions league for another 2 years. Sometimes, you gotta spend money to make money.
I also think this is why you have seen Fiorentina be so active on the transfer market this summer, as they are making the transition from being a club with big aspirations to a club on the verge of becoming a “big” club. Now they can think about paying players higher wages than the previous 1.5 million Euros per season cap that was the cause of Luca wanting to get out of town. I just hope they don’t botch this too much and make too many changes. I don’t want to see them sell Pazzini, Bojinov and Reginaldo for Gilardino, who in my eyes is a winy punk who thinks he’s better than Fiorentina. These guys got the team to the point of the Champions League again (though the points penalty means UEFA Cup), lets run with this squad next year to see how they do and then make more changes should they be necessary.
Posted from
United States -
Martha, once again a very insightful blog. I’m glad that Roma is trying to live within their means. If they only could do something to get the crowds back into the stadiums. Damn!
Posted from
United States -
I think in financial matters, the big three leagues could take some lessons from France. French clubs are overseen by the DNCG, which examines all financial transactions made by professional football clubs and will sanction them if they run in the red (one of my readers summed it up perfectly in his comment. Granted, that means no flashy spending, but French football will never be fiscally unhealthy (it’s possible to make profits too - Lyon’s profits were 16m last year).
It would be really great to see other leagues adopt a similar model, perhaps one not as strict as France’s, but one with oversight that would keep clubs from financially collapsing.
Posted from
United States -
Thanks, forza, I’m glad you got something useful out of it. (And you’re right, getting more bodies in the stands would certainly help.)
Thanks, as usual, for your insight tmc. (And I totally agree with you about Cassano, imho that would be a massive disatser, not to mention a horribly disappointing possible conclusion to a pleasingly rational transfer season.)
Posted from
Portugal -
Inara thanks for linking to that post, the combination of your research and the comments is really fascination.
Funnily enough, Italy also have a system under which clubs’ books are surveyed to make sure they can afford to operate in the following year — they’re sanctioned for going under, but not for spending more than they take in. (Of course, clubs with essentially unlimited bank accounts can afford pretty much anything, even if they’re operating deep in the red.)
Posted from
Portugal -
[...] Serie A books as well. Earlier this summer a list of financial results was released detailing the net profits/losses of all but 3 of the Serie A clubs during the 2005-2006 season. The study revealed an astounding total of €380m, spearheaded by the absolutely mind-boggling [...]
Posted from
United States
Comments are closed
Home 
