Italian Football Clubs Record Worst Financial Loss in 15 Years
Italian football clubs have experienced their worst financial loss in 15 years, despite recent investments from international backers. According to a report by PricewaterhouseCoopers, the country’s professional clubs collectively posted a net loss of €1.4 billion ($1.5 billion) for the season ending in June 2022. This grim financial performance comes even after attracting significant investment from US firms like RedBird, 777 Partners, and Oaktree.
While these investments have undoubtedly boosted the teams’ performance in European competitions, they have failed to translate into healthier finances. The pandemic has severely impacted ticket sales and broadcast revenues, leading to substantial losses totaling €1.3 billion for the 2020-2021 season alone. The subsequent year witnessed a further rise of over 4% in debt, with the overall indebtedness surpassing €5.6 billion in 2021-2022.
One of the major sources of revenue for Italian football, broadcast rights, has also seen a decline. The revenue from such rights decreased from €1.38 billion in 2018-2019 to €1.25 billion in 2021-2022 across the Serie A, Serie B, and Serie C leagues. Additionally, sponsorship income, another crucial revenue stream, dropped by 3% over the past four years. Serie A, the primary league in Italy, suffered an even steeper decline, relying heavily on domestic sponsors with over 80% of contracts originating in Italy. In comparison, only 53% of contracts from England’s Premier League come from within the country.
While Italian league teams rank third in terms of social media engagement, trailing behind England and Spain, they face growing competition from France and Germany. The follower numbers of French and German clubs are quickly approaching those of Italy.
Conversely, in the UK, where private equity-backed clubs and foreign investment dominate football, Chelsea FC is reportedly seeking investors to raise capital. The club’s new owners, Clearlake Capital and American investor Todd Boehly, have had a disappointing inaugural season.
Despite the challenges, deals in Italy’s football industry are still taking place. Most notably, Unione Calcio Sampdoria SpA, a club based in Genoa, received a €40 million bid from an investor group that included Andrea Radrizzani, former majority shareholder of English club Leeds United.
Goldman Sachs Group Inc. is also considering providing financing to Serie A in order to support the development of its media business.
As Italian clubs continue to navigate financial struggles, they must find a way to revive their commercial revenue streams and reduce their reliance on domestic sponsors. This calls for innovative strategies to boost ticket sales, explore new markets, and adapt to the changing dynamics of the football industry. With the help of strategic investments and prudent financial management, Italian football clubs can aim to regain their financial stability and compete on a global scale once again.
