Recent research has highlighted the alarming financial state of Serie A and Italian soccer in general.
Even with foreign investors pouring millions into teams like AC Milan and Roma in recent years, Italian clubs have experienced their greatest total financial loss in fifteen years.
AC Milan the model club
Under Elliott Management and now RedBird Capital, the Rossoneri have been a model club, paying off their debts and cutting costs to the point that they will declare a profit this fiscal year.
Nonetheless, it seems that is not enough to ensure the long-term financial health of the whole Italian league.
PricewaterhouseCoopers, via Bloomberg, have found that professional sports teams in Italy lost $1.5 billion for the fiscal year ending in June 2022.
Covid pandemic effect devastating for Serie A
U.S. investment groups, including RedBird, 777 Partners, and Oaktree are flocking to Italy’s top soccer league. As a result, clubs in European tournaments have improved their play, but they have also seen a decline in ticket sales and television earnings, leaving them financially unstable.
The COVID-19 pandemic devastated the 2020-21 season, resulting in losses of $1.4 billion. PwC found that in 2021-22, total indebtedness exceeded $6.1 billion, an increase of more than 4% from the previous year.
TV rights income lags behind
Broadcasting rights income for Italy’s Serie A, Serie B, and Serie C divisions decreased from $1.5 billion in 2018-2019 to $1.4 billion in 2021-2022. The decline in sponsorship income over the last four years has been 3%. The drop in Serie A, Italy’s top division, was the most severe.
More than 80% of its contracts are with Italian sponsors, underscoring its strong dependence on the domestic market. In contrast, only 53% of contracts in England, which boasts Europe’s most affluent league, are domestic, even with emerging competition from Saudi interests.
PwC also found that, behind England and Spain, Italy’s league teams had the third-highest level of interaction among their fans across the most prominent social media platforms.
However, France and Germany, who now rank fourth and fifth in terms of followers, are rapidly closing the gap with Italy.
Photo credit: IMAGO / Insidefoto
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