Italy Football Clubs Post €1.4 Billion Loss Despite Buyer Spree

2023-08-04 19:30

Italian football clubs recorded the worst cumulative loss in fifteen years — even after international investors injected millions

Italian football clubs recorded the worst cumulative loss in fifteen years — even after international investors injected millions in recent years to snap up teams such as AC Milan and AS Roma.

The country’s professional clubs posted a net loss of €1.4 billion ($1.5 billion) for the season ending in June 2022, according to a report by PricewaterhouseCoopers.

Italian football has seen a wave of investor interest lately, attracting US firms such as RedBird, 777 Partners and Oaktree. That has helped teams improve their performance in European competitions, but hasn’t translated in healthier finances as ticket sales and broadcast revenues have dwindled.

Losses for the 2020-2021 season totaled €1.3 billion, mostly due to the impact of the Covid pandemic. Debt rose more than 4% the following year, with overall indebtedness exceeding €5.6 billion in 2021-2022, according to the PwC report.

Sponsorship Down

Italy’s Serie A, Serie B and Serie C leagues saw revenue from broadcast rights shrink from €1.38 billion in 2018-2019 to €1.25 billion in 2021-2022.

Sponsorship, another key source of revenue, is down 3% over the last four years. Serie A, Italy’s main league, saw an even bigger decline in the same period. It is overwhelmingly reliant on the domestic market, with more than 80% of contracts attached to Italian sponsors. In England, home to the richest league in Europe — though facing pressure from new Saudi competition — only 53% of contracts originate in-country.

In terms of followers across major social media platforms, Italian league teams are the third most-popular in terms of engagement, according to the PwC report, trailing England and Spain. France and Germany, which rank fourth and fifth, are however fast approaching Italy in terms of follower numbers.

Meanwhile, in the UK, where private equity-backed clubs and foreign cash dominate the football landscape, Chelsea FC is approaching investors about raising capital, according to people familiar with the matter. This comes after a disappointing inaugural season for the club’s new owners, Clearlake Capital and American investor Todd Boehly.

Despite setbacks, deals are still happening in Italy. In May, Genoa-based club Unione Calcio Sampdoria SpA received a €40 million bid from a group of investors that included Andrea Radrizzani, the former controlling shareholder of the English club Leeds United.

Goldman Sachs Group Inc. is also considering providing financing to Serie A to help develop its media business, according to people familiar. In recent years, Italy’s top league has struggled to secure backers.